As women break through corporate ceilings and start and grow successful businesses in increasing numbers they are garnering a larger and larger share of the country’s wealth.
Recent statistics and reports show that women have captured an equal, if not greater, share of wealth than men. More and more women are becoming self-employed and they are contributing more and more money to the Canadian economy.
According to Investor Economics, the share of wealth controlled by High Net Worth (HNW) women who have more than $500,000 in investable assets is forecast to grow to $2.7 trillion by 2024 from the $1.2 trillion they controlled in 2014.
On a broader scale women control about one third of all wealth in North America and that figure is believed to be growing by eight per cent a year.
“Women certainly are breaking through many of the old stereotypes,” says Sam Febbraro, executive vice-president of Investment Planning Counsel and author of a report on the Canadian HNW market.
“In the past, the handling of money usually was done by men as the head of the household,” says Febbraro.”
Today, however, they have captured an equal if not greater control of the wealth in the family due in part to their longer life spans, their ability to create and build their own net worth and their success in breaking through historical stereotypes in the workforce.”
There has been significant discussion and study in the financial industry about gender investing and the differences and preferences among men and women.
A report by Merril Lynch which studied 11,500 investors found that while men and women may have some differences in their approach to investment decision-making, gender is less a determinant of investing success than other social, demographic and circumstantial factors.
The report suggested that the basis of previous research which focused on the investing behaviour of men versus women relied on stereotypes that were limiting in scope and the goal for researchers and advisers was to move away from gender comparisons and instead focus on women’s varied and unique perspectives.
“Advisers must pay attention to the nuanced differences in the approach to financial planning between men and women,” Febbraro writes in his report.
“To ignore either spouse or partner is to ignore the opportunity to cement long-term business and social relationships with clients.”
Many advisers now require that both men and women be present at all meetings because it is important in the planning process to understand both genders’ perspectives on what money means to them and what they are looking for.
“Some will be what is referred to as ‘financial validators’ who want to be involved in the process while others might be ‘delegators’ who are happy to leave the decision-making to someone else,” Febbraro says. “Money can mean many different things to both men and women – security, preservation, opportunity, peace of mind and enjoyment. There are no real stereotypes. What people feel about these issues will be critical to the investment strategy that ultimately will be developed.”
The financial planning process no longer is simply a transactional one. “The high net worth financial market is changing and must include the increasing influence of women,” Febbraro says. “The benefit of building a social relationship that goes beyond business has become a necessary requirement to meet the needs and expectations of the HNW market.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.