Globe Advisor is moving, click here to see

Advisor Invest With Confidence

photo: FemaleInvestors

For advisors, female investors present a challenge – and a major opportunity

Women want big-picture financial advice that aligns with their goals and dreams, says Mackenzie Investments president and CEO Barry McInerney


Date: November 11, 2016

Want proof that women think differently than men? Look at how they invest.

“Women are generally more pragmatic, big-picture investors than men,” says Barry McInerney, president and CEO of Mackenzie Investments. “They tend to be more realistic in their investment return expectations, and they prefer to buy products and services that are tied to their personal priorities.”

As a group of investors and potential investors, women are an increasingly important force in the Canadian economy. They still earn less than men, according to a 2015 United Nations study of the gender wage gap in Canada.

But their average total income has been rising faster: It gained 27 per cent from 1990 to 2011, versus 11 per cent for males during the same period, Statistics Canada reports.

Women are taking on leadership in the corporate world and in politics – half of the federal cabinet is female. Their relatively conservative approach to investing shouldn’t be interpreted as fear, says Mr. McInerney, whose Toronto-based firm has $64.3-billion in assets under management.

For example, women aren’t afraid to take risks in business. “Women’s entrepreneurship has increased dramatically in Canada during the last 20 years,” Mr. McInerney notes. Majority female-owned small and medium-sized enterprises represent more than $117-billion in annual economic activity for the country, the Taskforce for Women’s Business Growth estimated in 2011.

Women are more interested in holistic financial advice than in products that are pushed on them, Mr. McInerney adds. “They tend to focus less on particular investments and more on what’s good for their families and what fits their goals and dreams, which is why more comprehensive, big-picture advice motivates them more when it comes to buying and investing.”

Women make up just over half of Canada’s population, according to census data. The proportion of females who are investors is only slightly smaller: In 2014, 50 per cent of tax filers declaring dividend income on their personal returns were women, up from 48 percent in 2000.

In a 2011 survey, the Center for Women’s Business Research (CWBR) found that high-net-worth women – those with $1-million or more in investible assets – place a higher value on trust and 4advisor qualifications than men do. More than 90 per cent of such women said it was important to feel confident that their advisor is acting in their best interest.

In their search for good advice, women are more discerning than men: They want to be sure they get answers to their questions and won’t settle until they do. Those with higher levels of investible assets are more likely to turn to multiple advisors, using an average of 3.4, compared with 2.4 for men.

Reaching women with financial advice is not just crucial for them but also for the financial services sector and the economy in general. By 2008, nearly 30 per cent of females in dual-earner families took home more than their husbands, StatsCan found, a big gain from just 12 per cent in 1976. During those years, the number of husband-and-wife dual-income households grew from 47 per cent to 64 per cent.

At the same time, marriage rates have been dropping in favour of common law relationships, while divorce is on the rise. The result: blended and other non-traditional families that often have more complex financial and investment needs.

Research from trade publication Investment Executive shows that women tend to be less comfortable than men with speaking to advisors, aren’t fond of jargon and terminology, and are more concerned about protection from financial disaster.

“Advisers can mitigate these feelings,” Mr. McInerney says. It’s a matter of respecting such differences; for instance, not being confident in evaluating financial advice may signal that women are looking to their advisor for insights into economic conditions.

It’s vital to recognize that many women will end up being responsible for their finances as they reach retirement age simply because they tend to outlive men. “In choosing investments, women should be aware of the demographic realities,” Mr. McInerney says. “Census figures show that women live an average of seven years longer than men and have higher health care expenses.”

Having earned less money than men historically and living longer than them creates a savings gap that women need to address, with help from an advisor.

“Present income alone may not provide a full picture of women’s current and future economic well-being,” Mr. McInerney observes. “Retirement savings are an important indicator, as well as home ownership, assets, debt and net worth. These may also provide insight about the financial stability of the household.”

Private investments typically make up 34 per cent of women’s income at retirement and beyond, StatsCan reports. One type of investment worth considering is corporate class mutual funds.

Mackenzie Corporate Class Funds cover a variety of investing styles, asset classes, sectors and geographic regions. “We have expanded our Corporate Class solutions to provide additional new options for tax-efficient investing,” Mr. McInerney says.

advisors can also work with female clients to determine the cash flow needed for retirement, develop an estate plan and explore income splitting. As women’s financial clout grows, investment firms should welcome the opportunity to help them reach their goals.

Sponsored by Mackenzie Investments

Commissions, trailing commissions, management fees, brokerage fees and expenses all may be associated with investment funds. Please read the prospectus before investing. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated.

Advisor Invest WithConfidence


photo: CharitableGiving Mackenzie Charitable Giving Program helps investors take charge of building a philanthropic legacy photo: Overview Mackenzie Investments takes a holistic approach to building and preserving wealth

powered by Globe Edge