If you truly want to help your women clients, try something as simple as saving them time.
“The number one thing we hear from women is, ‘I’m too busy to be on top of my financial planning situation,” says Caroline Dabu, vice president and head of Bank of Montreal’s (BMO) wealth planning group in Toronto. “They’re looking for advisors to proactively educate them.”
One important way to do this is to help women plan for challenges that are unique to them, such as the ones described in the BMO Wealth Institute report, “Women in wealth: a financial golden age has arrived.”
For instance, the report points out that women earn 87 cents for every dollar men earn when wages are compared on an hourly basis. Another unique situation is that more than half of women act as caregivers to family members. Also, women will be more affected by rising health care costs as they live longer and tend to be more proactive about their health than men.
“We don’t call [those challenges] out enough in the financial planning process,” says Dabu.
But these are exactly the types of situations that advisors should be planning around.
Advisors can start by providing a realistic idea of what retirement can look like for women, if their spouses predecease them. Statistics show that a woman’s income can decrease by as much as 50% in the event of the death of a spouse, says Dabu.
Long-term care insurance is also something that should be discussed much sooner it usually is, according to Dabu.
“You need to have that conversation earlier when long-term care is affordable and when [the client] qualifies,” she explains.
While women may, on average, earn less, they are still the primary breadwinners in 31% of Canadian households, an increase of almost four times since 1976. Women also hold 37% of management roles and own or share ownership in almost half of all small businesses in Canada.
And helping women clients have a greater understanding of their employer’s benefits package can be an important service. It will allow the advisor and the client to discuss if the package provides enough coverage to sustain the client’s lifestyle or if more should be considered, says Dabu.
An element of this benefit plan that can be neglected in the advisor-client discussion is how the client is compensated.
“When you look at professional women or executives, a lot of compensation could be in deferred compensation or stock options,” says Dabu. “The advisor needs to understand how [those] factor into the financial plan.”
Women also do not want to leave problems behind for their children to solve and so, advisors can help in facilitating discussions between clients and their children regarding estate planning. Parents’ top mistake is thinking their kids know what to do with the assets inherited, says Dabu.
Advisors can suggest that their clients have discussions regarding the contents of wills and any legacy the clients would like to leave. This is also a way to start building relationships with those client’s children and maybe work with the next generation, says Dabu.