The latest stats about women in the workforce are raising concerns about their financial horizons without the expert guidance of advisors.
The latest stats about women in the workforce provide advisors with a huge opportunity to grow their business. With International Women’s Day on Sunday it’s a perfect time to bring up the subject.
The two surveys, conducted by Transamerica and BlackRock, paint an extremely pessimistic picture for working women.
The key findings in Transamerica’s survey include:
For instance, 77 percent of women offered a 401(k) plan by their company do participate and even better, those that do participate in their company plan contribute 7 percent of their annual income.
Imagine what these numbers would be like if more women used professional advisors? Statistics show that people using financial advisors have more wealth per capita than those that don’t.
While these are American statistics the numbers in Canada aren’t that much different. With two-thirds of working women not using an advisor the opportunity staring back at the industry is tremendous.
BlackRock’s study is global in nature but does have a Canadian component so pay attention.
One of the main findings according to BlackRock:
“The survey found that women are having a harder time than men in balancing everyday expenses with saving for retirement, and that lack of engagement in financial matters is translating into greater risk aversion - holding women back from realizing their retirement goals.”
The average personal income of women according to respondents of this survey is 25 percent lower than men leading to investments that are 46 percent lower. Overcoming the income discrepancy is not something that advisors can help with but certainly you can provide women clients with debt and expense management tools to increase savings.
BlackRock refers to “Smart Savers,” a group of Canadian women that are committed to financial planning and saving more.
Although Smart Savers earn significantly less than men – $49,700 vs. $70,900 – they save more than four times the average Canadian women. When it comes to saving for retirement they’re much farther ahead than the average working woman.
What makes Smart Savers so smart?
They work harder at their retirement planning spending 4.4 hours per month reviewing investments and savings. Forty percent are active investors, almost 50 percent take more risk when investing and two-thirds are eager to learn more about investing.
So, despite making less than men, investing puts them farther ahead. Interestingly, 49 percent of Smart Savers use an advisor compared to 29 percent for Canadian women in general.
"The examples set by these Smart Savers show that even with lower incomes than men, women can achieve substantial financial health if they take a greater interest in their money," says Karrie Van Belle, Managing Director, BlackRock Asset Management Canada.
"Even for those women who are struggling with setting aside money for retirement, adopting the behaviours of these women may help them get started in the right direction."
While it’s clear that women still face an uphill battle when it comes to the gender gap, examples like the Smart Savers suggests a little professional advice can go a long way.
On Sunday advisors of both sexes might want to reach out to a prospective client, who just happens to be a woman, with an offer to help.
The survey results, while bleak, aren’t insurmountable.
The two surveys, conducted by Transamerica and BlackRock, paint an extremely pessimistic picture for working women.
The key findings in Transamerica’s survey include:
- Only 14 per cent of women are “very confident” they will have a comfortable lifestyle in retirement.
- 54 per cent of women will be working beyond age 65 with some never retiring.
- 57 per cent of women who came up with a dollar amount did so by guessing.
- Most importantly, just 36 percent used a financial advisor.
For instance, 77 percent of women offered a 401(k) plan by their company do participate and even better, those that do participate in their company plan contribute 7 percent of their annual income.
Imagine what these numbers would be like if more women used professional advisors? Statistics show that people using financial advisors have more wealth per capita than those that don’t.
While these are American statistics the numbers in Canada aren’t that much different. With two-thirds of working women not using an advisor the opportunity staring back at the industry is tremendous.
BlackRock’s study is global in nature but does have a Canadian component so pay attention.
One of the main findings according to BlackRock:
“The survey found that women are having a harder time than men in balancing everyday expenses with saving for retirement, and that lack of engagement in financial matters is translating into greater risk aversion - holding women back from realizing their retirement goals.”
The average personal income of women according to respondents of this survey is 25 percent lower than men leading to investments that are 46 percent lower. Overcoming the income discrepancy is not something that advisors can help with but certainly you can provide women clients with debt and expense management tools to increase savings.
BlackRock refers to “Smart Savers,” a group of Canadian women that are committed to financial planning and saving more.
Although Smart Savers earn significantly less than men – $49,700 vs. $70,900 – they save more than four times the average Canadian women. When it comes to saving for retirement they’re much farther ahead than the average working woman.
What makes Smart Savers so smart?
They work harder at their retirement planning spending 4.4 hours per month reviewing investments and savings. Forty percent are active investors, almost 50 percent take more risk when investing and two-thirds are eager to learn more about investing.
So, despite making less than men, investing puts them farther ahead. Interestingly, 49 percent of Smart Savers use an advisor compared to 29 percent for Canadian women in general.
"The examples set by these Smart Savers show that even with lower incomes than men, women can achieve substantial financial health if they take a greater interest in their money," says Karrie Van Belle, Managing Director, BlackRock Asset Management Canada.
"Even for those women who are struggling with setting aside money for retirement, adopting the behaviours of these women may help them get started in the right direction."
While it’s clear that women still face an uphill battle when it comes to the gender gap, examples like the Smart Savers suggests a little professional advice can go a long way.
On Sunday advisors of both sexes might want to reach out to a prospective client, who just happens to be a woman, with an offer to help.
The survey results, while bleak, aren’t insurmountable.
