Christine Williston, a Vancouver-based money coach, has seen a lot of financially savvy female savers walk through her door. Many have researched potential investments, they’ve aligned these investments with their values and plans and they’re comfortable with financial lingo. They’re also a lot better at asking questions than men.
“There’s a lot of women running the finances of the couple – they’re in charge of the portfolio,” says Williston. “Women are increasingly managing more money.”
According to a recent survey from Allianz Life, 51 percent of women are responsible for their family’s household finances. Many are paying the bills and planning for life events such as education for the kids and their own retirement.
"To get the best returns, women need to become true investment students,” – Esther Bast Senior Vice-President at IG Wealth Management and President of IG Securities.
A CPA Canada survey found that when it comes to keeping track of family finances, the knowledge gap between men and women is almost non-existent. However, when it comes to choosing investment products, the gap is larger.
It won’t be long, though, before women are as informed, if not more informed, than men on investing. Women are making more money than ever before, with 60 percent of respondents in the Allianz survey saying they are their family’s primary breadwinner.
Women are also about to control even more money. With about $750 billion soon to be passed down from one generation to the next in Canada, women will be working with increasingly large dollar figures in their portfolios.
“To get the best returns, women need to become true investment students,” says Esther Bast, a Winnipeg-based Senior Vice-President at IG Wealth Management and President of IG Securities.
Here are some ways to put those incoming investment dollars to work.
Do the research
With a plethora of online investment tools available, many women are doing their financial homework, says Williston. And that’s a good thing. By using investment calculators and other financial apps, women will know more and feel better about having investing-related conversations with their advisor. “Women,” Bast says, “should never feel like their questions are silly or irrelevant.” After all, their finances are on the line. Be bold and be brave, she says. “Put that uncomfortable feeling aside.”
Find a good advisor
“Meet with two to three advisors from different companies,” says Bast. “Select one who is a good fit. Pick one who will be very thorough with the planning work you need done.” Williston suggests choosing an advisor who explains things well and doesn’t patronize. A good advisor should challenge you, but not aggressively push you toward investments you’re not comfortable with.
Don’t play it too safe
While many of the women Williston has worked with are good savers and can stick to a financial plan, they tend to play it safe with their investments. “Sometimes, women are overly conservative,” she says. “And the biggest problem is not [making] enough money.” Considering the wage gap, women need to push harder for solid returns. Women can still play it safe, but they may want to take on a little more risk for a potentially higher reward.
Revisit your plan
This goes for anyone, but as your life changes – you get married, have a baby, get promoted or have an older parent to look after – your financial needs will change, too. People should make their financial advisor aware of any such changes, so they’ll be able to tweak their portfolio accordingly. “Your advisor needs to understand what’s going on in your life – and what your short- and longer-term goals are – so they can offer you the best advice,” says Bast.
More women will learn the ins and outs of investing, just as they’ve taken on a larger – and now leading – role with the family finances over the years. Williston is buoyed by the number of women who have managed their investments successfully and on their own terms. “Some of them are doing extraordinarily well,” she says. “They’ve found that balance between risk and return, and they’re doing what makes sense for them.”