More educated and better paid
Nearly 60% of postsecondary graduates2 in Canada are women. This percentage is higher than their demographic weight. Canadian women's level of education has surpassed that of most Canadians, with a higher proportion of women with a bachelor’s degree.3
Advances are also noted in the workplace. Though women are still underrepresented, they hold close to a third3 of decision-making positions in businesses, whether in management or on a board of directors. Moreover, while men continue to earn more, the salary gap in their favour has continued to shrink, going from 16% in 2007 to 12% in 2022.4
Distinct realities and challenges
Despite these gains, Canadian women must deal with certain factors that can influence their personal financial situation and retirement planning:
Unexpected events
Women are often more vulnerable than men to the consequences of divorce, the death of their spouse or other unexpected events as their income is often lower.
Sole family support
They are more likely to take care of their children or elderly parents, to interrupt their career or to be single parents, which increases financial pressure.
More cautious
Women are more financially literate than they realize but can lack confidence in this area. As a result, they tend to be more cautious in their investment choices.
Longer life expectancy
Due to these factors, they may accumulate fewer assets over time, even though they live on average four years longer than men.5
Thus, many of them will eventually take on financial responsibility for their household alone, requiring a tailored plan to achieve financial independence and build wealth.
TFSAs: an inspiring example
The progress made by women professionally and financially does not systematically translate into increased savings. For example, men's median RRSP contribution6 is 50% higher than that of women. In addition, men represent 53% of RRSP contributors though they make up less than half the Canadian population.
TFSAs show that things are changing for the better. As opposed to RRSPs, more women than men hold this popular savings tool.7 Advisors can use this inspiring example to encourage female investors to develop similar retirement savings habits.
A different perspective on wealth and risk
Women also often have a unique perspective on money and how to manage finances:
- Many prefer to invest based on their personal goals and life events rather than solely seeking high returns.
- They are particularly focused on how their investments will improve their life and their family's well-being, support their children's post-secondary education, enable travel, allow them to retire on their terms or leave a legacy for future grandchildren.
Finally, understanding their investments is crucial to them. When well informed, they tend to adopt a risk profile similar to that of men. This in-depth knowledge gives them confidence and makes it easier for them to make informed investment decisions.
Adapting your strategy and advisory approach
Investment specialists can play a key role in improving women’s financial situations. They simply need to modernize their approach, which has remained largely unchanged.
Traditionally, their focus was on performance, investment returns and strategies to optimize these returns, often without considering the purpose of these outcomes.
Active listening
One key skill that must be developed is active listening. Women are seeking advisors who truly listen to their clients' concerns and needs, take the time to summarize this information and verify that they have a clear understanding of their clients' goals.
Beyond the financial aspects, it is essential to engage in discussions about their life priorities, what they want to protect and their outlook for the future, all while enhancing their knowledge in these areas.
Relationship-based approach
Women often place greater value on relationships than to technical aspects. For example, using inclusive terms like "we," "you" and "us" can help foster a trust-based connection.
Transparency
Admitting that you don't have all the answers can be seen as a positive trait by your clients. Investment specialists benefit from being transparent, especially when certain information is missing during an appointment. Once you have the answer, sharing it promptly strengthens the trust between you and your client.
Flexibility and networking
Women often juggle work and family responsibilities, making in-person meetings more difficult. Investment specialists are adapting by offering online appointments and more flexible schedules to accommodate these demands.
To engage female clients, advisors⸱can also participate in female-focused events and networks. This simple yet accessible strategy can help understand the needs of this demographic, expand your network and attract new clients.
Investing time in understanding the unique goals and needs of each female client will not only contribute to their financial success but also to your own.
Sources
- The changing face of wealth in Canada and its implications for financial advisors, IPC Private Wealth.
- Statistics Canada. Table 37-10-0020-02 Proportion of male and female postsecondary graduates, by institution type and status of student in Canada.
- Statistics Canada. Women in the labour market: Increased potential, pay, and participation.
- Statistics Canada. Intersectional Gender Wage Gap in Canada, 2007 to 2022.
- Life expectancy at birth in Canada from 2012 to 2022, by gender, Statista.com.
- Statistics Canada. Table 11-10-0044-01 Selected characteristics of tax filers with Registered Retirement Savings Plan (RRSP) contributions.
- Canada Revenue Agency. Tax-Free Savings Account 2022 Statistics (2020 contribution year).
Learn more
Complete our free online training, "Women and wealth," and obtain 1 PDU (Professional Development Unit) using your broker code and rep code on our Continuing Education Portal. For more information, contact your NBI sales representative.
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Share these resources with your female clients: Invest in you – Women's finances.