Women amassing wealth but still face risks, insecurity

While women continue to amass new wealth and gain greater control of family finances they still face risks and sometimes lack confidence in their investing abilities.

Recent data shows that the share of wealth of High Net Worth women with more than $500,000 in investible assets will exceed more than $2 trillion by 2024. Women today control about one third of all wealth in North America and that figure is believed to be growing by eight per cent a year.

At the same time, a recent report by CIBC has found that 92 per cent of Canadian women say that while they are either the primary or joint financial decision makers in their household only half feel confident or knowledgeable about their investing abilities.

The report found that while 92 per cent of Canadian women with investment portfolios are the primary or equal decision-maker responsible for their household’s investment decisions only 54 per cent feel confident and 49 per cent feel knowledgeable about investing.

The poll found that women tend to be conservative investors, unwilling to take on higher risk to achieve the possibility of greater investment returns. Women identified safety as being very important to them, then growth and then liquidity.

Women with a retirement portfolio currently invest their retirement savings primarily in guaranteed and savings products, stocks including mutual funds, and bonds including mutual funds. Seventy per cent of women say volatility in the stock market makes them nervous.

Besides their investing tendencies, women also are faced with some unique life challenges associated with longevity and their chances of being or becoming single.

“While women are demonstrating the ability to amass wealth they continue to be exposed to unique concerns associated with longer life spans than their partners and the potential of being a single income earner while being the primary care giver of parents and other loved ones,” says Kristine Douglas, a certified financial planner with Investment Planning Counsel.

For this reason, women in particular need to start saving early in life, which can give them more time to ride out market fluctuations and allow them to take on more risk for growth that they need to meet their goals.

“We particularly see a fear of risk among single women or women who have recently become single,” says Doulas. “They tend to park their money in Guaranteed Investment Certificates (GICs) which, in today’s low interest-rate environment, just aren’t good enough to get them to where they want to be. They need equities, dividends and more growth-oriented investments.”

Douglas believes that good financial and estate planning are crucial to help give women the security and peace of mind that they seek for their lives and the lives of their families. She recommends women have adequate life and long term disability and long term care insurance policies.

“Proper insurance can bring real peace of mind in knowing that there’s enough money for the future and to care for the family going forward,” Douglas says. “Work as a team with your spouse/partner, family and parents to develop financial and estate plans so you know about wealth transfer and who will be receiving what. The more and earlier that you plan the better off everyone will be, especially if you as a woman end up being single.”

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.

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