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Pattie Lovett-Reid

Chief Financial Commentator, CTV

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Women in Canada are expected to be significant inheritors over the next two decades.

A recent Women and Wealth Report from IPC Private Wealth and Strategic Insight found Canadian women will inherit roughly $900 billion in financial and real assets by 2026 – $710 billion of which is expected to be in financial assets, and another $190 billion in hard assets. Add to this, women have seen their income levels climb and are expected to amass a total annual income of $500 billion within the next few years.

Advisors need to pay attention to this. Women and money have been focal points in the investment community for over a decade, and yet there still isn’t a standout financial institution that seems to have been cornered with the women’s market.

I reached out to Kathleen Peace, senior financial consultant at Woodgate Financial, of IPC Securities Corp, to breakdown why women are such an important demographic for advisors, and how they can go about capturing the interest of potential clients. Here’s what she had to say:

What are the distinct financial planning needs of women compared to men?

“Women live longer than men and want their financial plans to provide reassurance that her financial future is assured. Their goals are about security over prosperity and achieving certain outcomes instead of targeting a particular rate of return. Women are also more focused on gaining financial security through the elimination of debt.”

“Many women tend to avoid investments in businesses that may not be socially responsible or may produce products that are potentially harmful to society.”

“A key piece of a woman’s financial plan can include education and coaching on her advisor’s part in order to improve her level of confidence with regard to financial literacy. The more confident she is with the basics of finance, the more comfortable she will be knowing that she is being a responsible steward of her wealth.”

“In addition, throughout the planning process, women want to feel heard and to have their needs understood. In general, women want to share their stories, get personal and into the down-and-dirty details of their lives and all that they are juggling. It is important that every component of her life is considered and taken into account in her financial plan.”

How does losing a spouse or a partner impact a woman’s standard of living?

“Widowhood has a direct and often negative impact on the standard of living of women. Some reports have indicated that within five years of becoming a widow, newly-single women witness, on average, a 40 per cent decline in household income. In addition, the rate of poverty among elderly widows is, consistently, three to four times higher than that of elderly married women.”

What is the financial impact of divorce on women and how can divorcees best approach retirement planning?

“The financial impact of divorce on women is greater than that resulting from the death of a spouse, according to Statistics Canada. On average, divorcing individuals need more than 30 per cent increase in income to maintain the same standard of living they enjoyed prior to their divorce. The divorce process itself can represent a financial burden with the average legal fees for contested divorce ranging from $7,000 to $70,000.”

“A newly-divorced woman can best approach retirement planning by stepping back and taking stock of her situation, ideally in collaboration with a trusted advisor. She has a different future in front of her than she did yesterday; it can take time to process and to determine how or if her goals for her life, family, and finances have changed.”

What key considerations should women keep in mind when drafting a financial plan?

  • “In general, she will have a longer lifespan than the men in her life”
  • “During that lifespan, if she decides to have children, there’s a larger likelihood of interrupted employment income and  potentially less overall savings as a result”
  • “Women should be encouraged to consider where they stand with regard to financial literacy. If they’re not confident with where they stand, they should enlist the help of their advisor in improving it”