Financial industry needs to show up for women
Canadian women control more wealth, but firms aren’t serving their needs
The financial industry in Canada is underserving women.
Societal stereotypes, ingrained biases and long-held assumptions about who should handle the money in Canadian households have helped prop up a system that disproportionately sidelines women.
Indeed, investment advisers approach men to offer financial guidance twice as often as they do women, according to FP Canada, nearly two thirds of women between the ages of 45 and 54 don’t have a financial plan, and less than half of single women work with an adviser at all.
That needs to change. Studies have shown that 90 per cent of Canadian women will be the sole financial decision makers in their household at some point in their lives, whether that’s due to divorce, personal preference or death of a spouse. And, if that’s not motivation, there’s another reason financial institutions need to overhaul a lot of their thinking and services — the scales of economic might are beginning to tip toward women.
In 2017, Canadian women controlled $1.3 trillion of personal wealth. And that number was projected to skyrocket to at least $3.3 trillion by 2026, according to a 2017 TD Wealth study conducted on behavioural finance.
At the same time that women are experiencing increasing economic security, many women are also being disproportionately affected by the economic devastation of the COVID-19 pandemic.
This is partially because more women are employed in industries that have been most impacted by the pandemic, including the hospitality industry and non-profit sector; others are opting to stay home and care for children because of gender wage gap inequities, and child-care challenges that have historically placed a greater burden on women.
This disproportionate economic impact on women is so great that it’s being dubbed by many policy researchers as the “she-cession.”
Combined, this increasing economic might (due in part to inheritances by baby boomer spouses and parents) and the she-cession, are creating what is shaping up to be one of the most pivotal economic moments in history for women.
And while this is unfolding, most financial institutions and economic policies haven’t caught up to reflect this new reality. Women need the financial services industry now, more than ever, to offer better advice and services for them during this watershed moment.
Helping women build financial confidence and manage wealth
Financial service providers have an opportunity to better support women over the next few years as they bear the brunt of the she-cession, and as this massive transfer of wealth takes place.
Support can come in many forms, including adjusting wealth planning strategies, and internal training policies and systems to be more inclusive of women’s investment needs and their decision-making patterns, along with offering financial literacy programs.
One critical first step is acknowledging that there isn’t a one-size-fits-all approach that will address the diverse needs of all women. Some women may feel inclined to take more financial control of their lives, while some may prefer to consult with trusted friends or family.
Regardless of a woman’s relationship status or the dynamics of her personal relationships, the industry needs to prioritize financial literacy programs to help bridge some of this gap so that any woman — or any person, for that matter — has the tools they need to make personal finance decisions with confidence.
In August, TD Wealth launched a Women and Wealth microsite to serve as a resource and content hub offering advice and financial information for women, regardless of background, economic status or life stage. We have also implemented a differentiated wealth planning strategy driven by the recruitment of more women for senior investment advising roles.
Acknowledging that women have differing needs is another step in the right direction. I’m proud that we’re looking at our services with an honest and critical eye and that we are actively developing new solutions.
The industry needs a refresh, but it gives me hope to see progress within my own organization.
From increasing the number of female advisers to educating our team on understanding the criticality of this economic shift, to sharing female-focused insights through our Women and Wealth training workshops, we have made strides. But the work is not over.
While the pandemic has wrought unprecedented financial strain for many women, as an industry we need to prepare for the next chapter of economic transformation and make sure we show up for women in a bigger way.