How investors can gain confidence

Role models spark desire to learn, author says.

Deanne Gage 14 May, 2012 | 6:00PM
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Women may be confident in their financial abilities, but that confidence doesn't appear to extend to the financial-services industry. A recent BMO Nesbitt Burns study found that the vast majority of Canadian women (82%) are either primarily or equally responsible for household financial decisions. Yet only 30% of these women feel the financial-services industry is meeting their needs. And 40% feel their views on financial matters aren't taken as seriously as those of men.

Perhaps there's a disconnect about the best ways to communicate. In a recent study, Toronto portfolio manager Barbara Stewart found women are more likely to attribute their financial confidence to discussions with other people, not reading financial newspapers and charts. These people aren't necessarily financial experts, but role models like their parents, grandparents or a friend of the family.

The financial-services industry, on the other hand, tends to emphasize more charts, numbers and data instead of conversations. Understanding how and why women value discussions may greatly break down any barriers.

"If clients, male or female, are not interested in financial tables and charts, then they're not going to have the desire to learn about investing," says Stewart, who works at Cumberland Private Wealth Management. "When you're discussing an investment portfolio, they may prefer to hear stories or to tell you stories about their lives so you can get an understanding of them."

Stewart decided to probe the concept of role models and conversations more deeply by interviewing 50 successful women worldwide to learn about their businesses, life lessons and financial wisdom. The resulting report is called Rich Thinking: A Guide to Building Financial Confidence in Girls and Women.

Stewart expected to find varying differences between the stories but instead found commonality: independence reigns supreme. "Without that, you're not going to have financial confidence."

Barbara Stewart

She cites the example of Ana, an award-winning architect in Zurich she interviewed. Ana spent a year travelling on her own when she was 17. She made a bunch of money mistakes and had to do odd jobs to make ends meet. But the year taught her that what we want costs money. "She had to figure out how to spend money and be smart about it," Stewart says. "She learned how to plan and buy the stuff that was important to her."

Role models can come in the most unlikely places. It could come from a random person who just happened to take the time to have a conversation. For instance, Helene, then a 16-year-old girl, was being groomed by her parents to be a homemaker while she had aspirations to study law.

Having an impromptu discussion with a friend of her mother changed everything. The mother's friend, who was a doctor, took the time to chat with Helene about where she wanted to live, how much money she thought she would need and the types of people she'd ideally work with.

Stewart says just having someone positive to bounce off ideas made all the difference for Helene, who is now a tax lawyer in Paris working on high-profile merger and acquisitions cases. "It's very important to ask yourself the right questions and not just the age-old 'what do you want to be when you grow up?' but take it one step further and link lifestyle to money."

Even negative financial examples can inspire. Take the issue of compensation. Stewart interviewed Marianna, who watched her mother (who owned a bakery) consistently under-price her homemade cakes to the point that she didn't even cover her costs. Marianna, who grew up to become an artist, didn't like her mom's strategy. She spent much time doing research to understand market value and why certain painters got paid a certain amount.

Stewart sees a lesson from Marianna's story. Studies show that women are more likely than men to hesitate when it comes to asking for a raise or getting a promotion. "It's easy to fall into the trap of getting excited about a job and not carrying it through to the next step," she says. "The downside of not getting paid properly is habit-forming. If you get paid well, that will foster the feeling of financial confidence."

Seeking assistance from others is another invaluable life lesson most of the women learned later in their careers, Stewart notes. They did it only after they "spiraled downward at some point," she says. "They now believe that it's OK to ask for help, they don't have to be great at everything. Some of them had to come [to this conclusion] through some soul-searching and realizing it would have been easier to ask an expert without feeling bad about it."

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About Author

Deanne Gage

Deanne Gage  Deanne Gage is a Toronto-based writer who has specialized in personal-finance issues since 1999. A recipient of several journalism awards, including one from the Investment Funds Institute of Canada, she is also a former editor of Advisor's Edge and She can be reached at

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