The Rise of Female Investors: What Do They Want the Most?

They may soon hold half the assets but are only represented by a small fraction of advisors – these are opportunities to better serve women investors.

Vikram Barhat 4 December, 2023 | 4:19AM
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Woman researching investments on computer

Once a male-dominated sphere, the investment landscape is undergoing a seismic shift. Smashing through barriers, women are muscling their way into the world of investing and reshaping the landscape like never before.

Women are making more money and are increasingly exerting more control over the financial affairs in their lives. Not to mention that they live longer than men, are receiving inheritances, and in many cases control their family finances.

According to a Sunlife Global Investments report, Canadian women will control $4 trillion in assets, by 2028, almost doubling the $2.2 trillion they control today. But has the financial industry evolved to adapt to this social dynamic? Is the advisory community equipped to meet the needs of female clients? Sadly, the answer is no. 

Where are the Female Advisors?

Only 15% of financial advisors in Canada are women, according to the report. This is particularly significant considering studies reveal women are more comfortable talking to female advisors than they are to their male counterparts for a variety of reasons.

These findings are further corroborated by Tina Tehranchian, a CFP Professional and Senior Wealth Advisor with Assante Capital Management Ltd. Many women feel more comfortable working with female advisors, but “there is not enough choice available for [female] clients,” she says.

As the control of assets increasingly falls into the hands of women, it's crucial for wealth managers to understand the investment requirements and preferences of this substantial, yet underrepresented, cohort of investors.

Women Want Big Picture Advice

Women approach money differently. It’s believed that men tend to be focused on returns, while women are more focused on the holistic picture. “Women do not chase returns as much as men do and they usually trust the judgment and advice of their advisors which makes for a great relationship and makes the job of an advisor easier,” argues Tehranchian.

She cautions that misconceptions about female investors continue to persist, including the idea that women aren’t interested in their finances. “One incorrect stereotype is that women like to delegate the financial decision-making to their male partners,” she says.

Women May Soon Have Half the Assets

Research shows that by 2026 Canadian women may be controlling nearly half of the total accumulated financial wealth, marking a substantial rise from around one-third a decade earlier. Further, women are better savers than men, despite the existence of a gender pay gap.

“If advisors properly engage and educate their female clients they can be just as involved in financial decision-making as their male partners,” notes Tehranchian.

Another incorrect notion is that women are more conservative investors than men. “The truth is that if women are properly educated about the risks and rewards of their investments they can be just as willing to take calculated risks with their investments as men,” she contends.

A conspiracy of factors including longevity, lifestyle choices and higher earnings, make women a key part of the client base for financial advisors. “Women make up a large part of the workforce and are making more money than before,” points out Tehranchian, adding that many women will end up living many years on their own, either because they choose not to get married, or due to divorce or being widowed. For these reasons, female clients constitute a much larger portion of an advisor’s client base than a few decades ago.

While studies underscore the growing desire among women to take a more active role in managing their finances, it seems the industry has yet to fully seize this significant opportunity.

So, what exactly are female investors seeking from their advisors? “Female investors want to be taken seriously and are interested in financial education and making smart decisions about their money,” asserts Tehranchian. “They like asking questions and want to feel comfortable with the financial decisions they make so they want their advisors to patiently answer their questions and spend time educating them about their various options.”

Opportunities for Education and Trust-Building

Improving the financial literacy of others can also be very rewarding for advisors who work with female clients who tend to put a lot of trust in the advice they receive, she notes. It all boils down to how advisors communicate with their female clients. Tehranchian stresses the need for greater empathy and understanding on the part of advisors. They should be “willing to invest the time and effort needed to educate women about their options so they can make better financial decisions,” she adds.

Cultivating enduring relationships with female clients can be a goldmine for financial advisors, not only in terms of client satisfaction but also as a catalyst for referrals. Hence, it's a no-brainer for advisors to invest their time and energy in comprehensively addressing their queries and educating them about the myriad of financial avenues available, says Tehranchian. It's not just about business, it's about empowering these women to navigate their financial journey with confidence.

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About Author

Vikram Barhat

Vikram Barhat  A Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry, Vikram also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

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