Women and wealth: The evolving need for financial advice

Over the past several decades, the role of women in the workforce has shifted significantly. Women are now the primary breadwinners in more than 31% of Canadian households, representing an almost four-fold increase since 1976.1 Women also own or share ownership in almost half of all small businesses in Canada and control about $1.1 trillion in personal wealth.2 As a result, women are taking a more active role in decision-making when it comes to money.

We spoke with wealth psychology expert Kathleen Burns Kingsbury about women and wealth – and their different needs for wealth planning.

Q: How do men and women differ in their attitudes toward wealth and wealth planning?

Every individual is different, but in general, women view wealth as security for themselves and future generations. They are interested in financial planning and figuring out how to effectively pass on wealth. Men also want to pass on wealth, but tend to view wealth accumulation more in terms power and control.

Neither viewpoint is right or wrong, just different. These differences do influence how men and women want to work with advisors and how they want performance results shared with them. For example, men want to know if they outperformed the market whereas women want to know how their returns affect their real life goals and objectives. And, of course, individuals will define wealth and what is most important to them in different ways regardless of gender.

Q: Are the financial-advice needs of women being met?

Historically, women clients’ satisfaction levels with the financial services industry are very low. The Boston Consulting Group did a global survey in 2009 of 12,000 women and discovered that these women rated financial advisors the lowest in customer service out of 34 service categories. That was a real wake-up call for the industry, and it’s why institutions like BMO Private Banking are leading the way in taking action.

Q: Ideally, how would the wealth planning process differ between women and men?  

In general, women want advisors who are coaches dedicated to educating them about financial matters and understanding their wealth holistically. Men tend to want advisors who are experts who can beat the market. While male clients may want a relationship with their advisor or banker, it is not as vital as it is with most women. Again, these are generalizations, and an advisor has to factor in each client’s communication and advice preferences.

Q: What’s the risk for high-net worth women who don’t seek out the wealth planning expertise they need?

Statistically, women live longer than men, and therefore need to save more for retirement. Yet they often save less, because they’ve taken time off from the workforce to care for children or aging parents.

I think the women who are most vulnerable financially are the ones in a relationship where their partner handles all of the family’s financial affairs. As much as we don’t like to think about it, every relationship will end eventually, either through death or divorce, or change dramatically through illness.

Getting up to speed on finances when you’re grieving a loss is a very difficult task. Getting involved in the wealth planning side of life sooner rather than later can help guard against this.

Q:Any advice for women who are looking to get started?

Women have a tendency to put the needs of others before their own. They put off taking action and getting advice on their financial health. They may also defer to their partners in terms of choosing an advisor, and that can lead to a bad fit.

So I’d advise women to be self-advocates: Think about the top three characteristics you’re looking for in an advisor, then interview potential advisors to see if they can meet those needs. And don’t think that you have to know or understand it all when you go in for a meeting. Quite the contrary – what you don’t know is why you’re looking for advice in the first place.

Kathleen Burns Kingsbury is the author of several books, including How to Give Financial Advice to Women and How to Give Financial Advice to Couples, and a regular contributor to Investment News, Money.com and CNBC.com. A sought-after keynote speaker on the topic of women and wealth, she is a special consultant to BMO Private Banking in helping us ensure that the needs of our female clients are being met.

1 Milligan, K, “Canada’s Female Breadwinners Are Growing in Number, but not by Age Group,” in Canadian Business, June 10, 2013.
2 Nelson, J, “Women and Wealth: The Investment Sector’s New – and Crucial – Frontier,” in The Globe and Mail, August 9, 2014.

This blog post is for informational purposes only and is not and should not be construed as, professional advice to any individual. Individuals should contact their BMO representative for professional advice regarding their personal circumstances and/or financial position. The information contained in this report is based on material believed to be reliable, but BMO Financial Group cannot guarantee the information is accurate or complete. BMO Financial Group does not undertake to advise individuals as to a change in the information provided. All rights are reserved. No part of this report may be reproduced in any form, or referred to in any other publication, without the express written permission of BMO Financial Group. ®/™ Registered trade-marks/trade-marks of Bank of Montreal, used under license.