Do advisors need to approach female clients differently?

Do advisors need to approach female clients differently?

Do advisors need to approach female clients differently? A new research report has discovered that women in Canada are going to control nearly half of the accumulated financial wealth by 2026. This will include around $900 billion assets -- about $710 billion of which is expected to be in financial assets and another $190 billion will be comprised of hard assets.

With women playing a more significant role on the financial landscape, it’s crucial for advisors to understand how financial planning needs and wants differ between genders.

“Canadian women’s needs and objectives, attitudes toward risk, and willingness to plan and take professional advice are different from that of men,” explains Sam Febbraro, Executive Vice President, Advisor Services and President and CEO of Counsel Portfolio Services. “Some of the key messages we are sharing with our advisors is the need for personalization. There is clarity in communication that needs to be in place.”

The report, conducted by IPC Private Wealth and Strategic Insight, found that an unplanned change in circumstances, like widowhood or divorce, can lead to a direct and often negative impact on the standard of living for women. In many cases, prior to a change in their circumstances, women (like men) are unlikely to have an individual financial plan.

As well as having to adjust to a new level of personal income, which can be difficult, divorced and widowed women also have to deal with the emotional impact of assuming full responsibility for their own, and possibly their family’s, financial wellbeing.

The study found that both groups - divorced and widowed women - show an interest in developing their financial knowledge and are willing to engage with professional advisors to develop a short, medium and long-term financial plan. “Most women seek security over prosperity and look for assured outcomes and not necessarily performance,” says Febbraro. “They also want a financial plan that reflects their personal values.”

Febbraro urges advisors to consider some integral wealth management concerns when working with an individual female client: the adjustment to the lower level of income, usually following the death of a partner or a divorce; knowing how much to save for retirement given their longer life spans and tendency to have interrupted careers; understanding the tax consequences of withdrawing from their portfolios; and the fear of becoming a financial burden to their loved ones, typically their children.

“The study found key differences in attitude among men and women toward money,” says Febbraro.  “Most women seek security and they tend to exhibit more saving habits over men. Also, research conducted by US Trust found that 62% of women identified as high-net-worth felt financially secure compared to 76% of high-net-worth men.”


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