Why Building Confidence Is Critical Around Women and Wealth | Globe & Mail

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As the great wealth transfer begins to reshape the financial landscape, financial advisors have a unique opportunity to empower women. Focusing on this client segment is not only logical but essential as women are poised to inherit a significant portion of this wealth and play a key role in managing and preserving it for future generations.

For anyone coming into wealth, knowing what to do with it can often be a challenge. That’s where advisors play a key role in helping women gain the necessary confidence.

“It’s important to remember that every client is different, as are their comfort levels when it comes to finances,” says Jennifer Leathem, wealth advisor and client relationship manager at Nicola Wealth Management Ltd. “For women, especially, fostering an environment where they feel empowered to ask questions, discuss their past experiences, voice concerns, and share their future priorities openly is crucial.”

That’s good practice, overall, especially because there has been a gender gap in financial literacy and confidence in Canada that has existed traditionally, according to a working paper from the University of Quebec at Montreal. Another Bank of America study found that only half of women in the U.S. feel confident about their finances and only 28 per cent feel empowered to take action.

Canadian women currently control around $2.2-trillion in assets, higher than at any point in history, and are estimated to control $4-trillion by 2028, according to a CIBC World Markets report.

There are many reasons for the rise in women’s share of wealth, including higher levels of entrepreneurship and greater successes in the workforce for women. Now, another contributing factor is the massive wealth transfer stemming from the baby boomer generation, which will first happen between spouses as the first member in a couple passes away. As women tend to outlive men, the wealth in most cases will transfer to them.

Decisions flow from having an in-depth financial discovery process, Ms. Leathem says.

“You start by asking, ‘What do you want to focus on?’ and encourage them to ask questions. These conversations are important so you can not only build an authentic picture of their financial life but build a trusting and lasting relationship as well. By listening, you’re empowering women to feel in control of their money and creating holistic plans for their financial future.”

Many women have a long history of making financial decisions, either as solo clients or as part of a couple. Even if their spouse is the driving force in the family finances, women should always be brought into financial discussions, Ms. Leathem says.

“As an advisor, I always encourage women to participate in family wealth planning meetings from the outset. They should have a say in the choice of wealth advisor. Potentially, they will become the primary decision-maker, and a long-term trusting relationship can foster the confidence needed to succeed financially.”

Building that relationship can be particularly valuable after a spouse passes away. According to various studies, around 80 per cent of widowed women leave their financial advisor within the first year of their spouse’s death because they don’t feel a connection with that professional.

Financial literacy is a work in progress for all clients. No one understands everything.

“We want people to feel knowledgeable about their finances, so we host numerous client events that cover specific topics of interest,” Ms. Leathem says.

“We care about the success of our women clients, and our women advisors and have specific initiatives that focus on elevating their financial mindsets,” adds Danielle Skipp, managing director for Nicola Wealth in Ontario.

The firm’s Women’s Financial Mastery Series takes it one step further with a series of workshops tailored to women clients that help participants gain knowledge on pertinent themes such as wealth-building fundamentals, navigating life events and generational wealth, and diversified investing.

“All of these pieces lead to greater confidence,” Ms. Leathem says. “We want to help women navigate the financial landscape. It takes time. It’s not something you are going to accomplish in a meeting, or even a few years. It’s a long-term process. Our approach has proven successful, and we expect to make even further progress moving forward.”