Helping clients chart their financial journey

Even under normal circumstances, achieving security and control in life is difficult for many women, given the many inequalities they’ve traditionally had to face. But as we pass the one-year anniversary of COVID-19 officially being declared a global outbreak, certainty has become even more of a rarity – which, in a very real sense, makes providing financial advice for women an essential service.

“In this business, to have a well-diversified portfolio that generates a solid return is really just table stakes,” said Alana Riley, senior vice president, Financial Services at IG Wealth Management. “Where we as advisors differentiate ourselves is providing advice that lets you sleep at night.”

Women rising in responsibility and power

As Riley tells it, women are faced with a wider range of financial stressors than ever. Aside from taking a ubiquitous toll on overall wellness – which must be incorporated as a new pillar in the financial-planning process – the global pandemic has set the entire Canadian female population back professionally. According to a 2020 report from RBC Economics, over 1.5 million women in Canada lost their jobs in the first two months of the recession alone, rewinding the clock by nearly three decades in terms of female labour force participation.

In a February survey report, CIBC said that women are struggling to balance their career, household responsibilities, childcare, and finances. The majority of women polled said they had primary responsibility in supervising their children’s learning and schoolwork (65%), childcare (60%), meal preparation (67%), paying household bills (61%), and household budgeting (59%). To a lesser but still-significant extent, women reported that they plan long-term savings goals for their families (49%) and take charge over household investment decisions (48%).

“Even with Canada's most senior leading women, the landscape really shifted with the experience in increased demands of childcare, home schooling, and household responsibilities” Riley said. “For senior leaders, there’s an added dimension of sharing emotional burdens and tools with female team members, who tend to truly seek out other women to share some of those more personal conversations.”

As women increasingly participate in protecting their families’ financial welfare, they’re getting more exposed to the challenges of supporting multiple generations at once. Beyond the widely reported experiences of the sandwich generation, Riley said more women – including herself – are becoming members of what she called the “clubhouse generation,” who are simultaneously looking after their grandparents, their parents, and their children.

“When I first started my career, the life expectancy we’d use for clients’ financial plans was 78,” she said. “Now we're having to build out financial strategies with clients that assume they’ll live up to 90 or 95. In my own family we have my grandmother, who’s still with us at 100 years old.”

To the optimist, women’s growing spheres of influence and responsibility can be explained in part by their rising power. Aside from their slow but sure ascent through the corporate world – promising an upward trend in incomes – women are expected to control an increasing share of wealth. Citing some statistics, Riley said women are projected to control over half of the wealth in Canada for the first time by 2026, and 90% are expected to become their household’s sole financial decision-maker at some point in their lifetime.

“Quite frankly, our role as leading industry investment advisors is to be able to make sure that we're focused on this new and rapidly growing segment,” she said. “There's no faster growing segment of the market than women.”

Charting women’s financial journeys

Generally speaking, Riley said men tend to put more emphasis on portfolio management and investment performance, while women are more focused on goals and outcomes. Women are also very relationship-oriented; aside from meeting their goals, they want a financial plan that considers the welfare of their loved ones. In other words, they’re not interested in achieving a certain percentage return target so much as they are in having an investment strategy that’s weaved into a holistic plan.

“I’ve found that women in relationships should have an opportunity to have an independent conversation,” Riley said. “Like it or not, the conversation might be very different in a one-on-one setting compared to what it would be if there's multiple people in the room. And because their goals might be very different from their partner’s, it is worthwhile to be able to understand what those goals are.”

One thing holding women back from financial planning, which applies also to people in general, is the perception of effort involved. Aside from collecting documentation, they can also be intimidated by the thought of doing back-end work. To help clients overcome that, Riley said advisors must emphasize financial planning as a process, focusing first on the piece that keeps the clients up at night and gradually exploring other areas of the financial plan over time.

“We’ve found that once women have built a plan, they tend to stick to it,” she said. “That’s really a big key to success.”

That’s not to say that plans should be monolithic and unchanging. As life happens, people may revise their priorities, or maybe their circumstances change, as is the case for many during the pandemic. That means financial plans should be living plans, and clients must be able to have time with a professional and trusted advisor regularly, which for Riley should be at least every six months.

At IG Wealth Management, clients are able to see their living plans in real time through an online portal. Whether it’s at home or on the go, they can use a stable internet connection to check their goals and progress; if there’s been any change in their priorities or circumstances, they can reach out to their advisor and have those updates reflected in the system.

“Ultimately, that’s why financial planners need to cultivate a solid relationship with their female clients. We know that 70% of women leave their current advisor after the death of a spouse, and it’s something we as an industry have to focus on,” Riley said. “For women to take control of their financial future, they need an advisor who can help map out their goals and dreams, be there to answer questions, make sure all the key pieces are covered, and open up an ongoing dialogue to make a true living plan.”