How smart advisors can connect with growing number of financially independent women who are 'willing and ready to learn'
There is a growing segment of the population that are becoming more and more financially independent but remain, in general, less confident about their money. In what should be music to an advisor’s ears, these savers tend to be disciplined, collaborative and open to advice. I’m talking about mature, single women.
The growth of this segment is the result of numerous changes in societal attitudes and demographics. Many have built businesses from the ground up, while more women have now moved into higher-paid jobs. There is much work to be done on the equality front, of course, but with bigger pay cheques and 20-odd years of exposure to RRSPs and savings vehicles, these women have built up wealth.
Mature single women have, however, had to deal with unique challenges, like taking time out of the workforce to care for their children or elderly parents. Statistics also show that women live longer than men, so they have to make their money last longer. This requires careful planning if the household has had only one source of cashflow over the years.
Jamie Keenan, wealth advisor and portfolio manager, BMO Private Wealth, told WP that this presents opportunities for advisors.
“These women are disciplined, and they're very focused,” she said. “They are meeting their financial goals. They’ve managed a lot throughout their lifetime and they’re recognizing that they have the autonomy to make their own decisions, and they'll act on those and be disciplined.
“They’re also willing and ready to learn. Women want to be become more financially confident, and they want to be educated and they want those resources. It’s a wonderful opportunity to educate your client base because they're ready.”
If an advisor can connect with this group, there is definitely a niche where that expertise is needed. About 70% of Keenan’s clients are women – although not all single and mature – but she has witnessed the trend of increasing financial independence. Gen X and millennial daughters are becoming more financially confident – and they’re encouraging their baby boomer moms to do the same.
She added: “I've talked to two daughters over the last week whose single moms have just sold their principal residence, and they're looking to work with someone that can help them understand how much they can afford in terms of rent, and maybe a new travel budget, now that they aren't tied to a property.
“I see that as an emerging trend, where women in general are just taking more control. As an advisor, I expect more and more referrals coming my way in those exact scenarios.”
The BMO advisor stressed that studies have revealed that women don’t necessarily care to work with either a male or a female advisor but what they really want is a profession who listens to them and is going to be with them for the whole journey, not just the next five years. It’s crucial, therefore, that ageing advisors have succession plans in place to see that through and even capture their children as future clients.
The nature of that advice has also changed. Single mature women, in particular, don’t want stock pickers; they want holistic financial planning to help them budget for a long, fruitful life. For single women, estate planning is critical. They need advice on powers of attorney for medical and financial needs, and around gifting to their adult children while they’re alive in a way that does not jeopardize their retirement.
Keenan said: “One of the reasons I love working with my women clients is that they're collaborative. They love to network, and they want to be around and seek advice from other professionals. This leads to a far more holistic wealth planning discussion and what I call building their personal board of directors.
“There's a real opportunity there too when it comes to the wealth planning, and stretching that income longer. Get specialists in the same room at the same table working towards your full financial picture, as opposed to just doing it in silos and hoping it comes together.”