Why, and how, advisors should focus on women in the wealth transfer

Cassandra Cross grew up in a pretty traditional, conventional, Canadian family. The youngest of three girls, her father was the breadwinner, her mother stayed home, and the primary financial decisions around investments, insurance, and planning were made by her dad. While both her parents are still around, Cross knows that in that traditional model if she lost her father suddenly, the rest of the family would be left with the assets he built and very little idea of how to manage them.

Cross now works to address those issues for her clients. She is a wealth advisors and client relationship manager with Nicola Wealth, having joined the firm at the opening of its Calgary office just over a year ago. Like all advisors right now, she is deep in the weeds of the intergenerational wealth transfer. As she helps families navigate the challenges and opportunities that come with a moment like this, she pays particular attention to the women set to inherit some of their family’s wealth. She is keenly aware of the gaps in knowledge that many women are left with and believes that advisors now need to work to ensure those gaps are closed.

“There are gaps that women face around wealth planning. I’ve observed that working with my women clients they may have some misunderstandings around topics like investments, which come with complexity and can often deter women from active participation,” Cross says. “Maybe that stems from a historic reliance on partners for their financial decisions, which has ultimately hindered their financial literacy and competence. As a firm we have recognized this gap.”

Cross says that Nicola Wealth’s firmwide recognition of the particular knowledge gaps that women face is one of the key reasons she joined the firm. Those gaps also extend beyond just managing investments, towards areas like estate planning and the tax implications of asset transfers. She says that in her experience many women won’t know who their families have designated as a trusted contact or who to seek advice from. As part of their work to close these gaps, Nicola advisors are helping to network their women clients with more tax experts, accountants, and lawyers so they are ready for the wealth transfer.

Just as many women face gaps in their knowledge about financial services, the financial services industry has some gaps and misconceptions in its general knowledge of women. Cross notes that many advisors will automatically assume that women are risk averse. That may stem from a focus on cash flow management and prioritizing debt repayment, but it is not instructive as to investment risk tolerance.

Cross says that Nicola Wealth recently launched a workshop series through their Women's LEAD initiative called Women's Financial Mastery, which offer small conversational sessions to educate women about financial services while listening to them about their needs. This can help Nicola better understand what the women they serve want and need, while educating them and helping to identify and close any gaps in their knowledge.

In addition to building out trusted contacts and creating educational opportunities, Cross works with her female clients to help them set up emergency funds, review insurance coverage, and build contingency plans for unexpected events. While these pieces may seem basic, they are the foundations upon which wealth is built. By starting with these concepts during the intergenerational wealth transfer, Cross can ensure that her female clients are placing any inherited assets onto a strong foundation.

The intergenerational wealth transfer is the exact moment to be focusing on women’s gaps in knowledge and acute needs, according to Cross. With so many Canadian women set to inherit wealth, whether as surviving spouses or as children, it behoves the advisory business to ensure that this huge demographic is as ready as they can be.

“Women live longer than men. If you’re an advisors working with a household and primarily working with the male spouse, there’s a high probability that he may no longer be there and your work will be shifting to his surviving wife,” Cross says, when asked why advisors should focus on this demographic. “We have noticed that women want to be more knowledgeable on financial topics and more involving in those decisions, and they want their children to be better educated. [Advisors must] be mindful that more than 50 per cent of women will receive a wealth transfer at some point.”