Women need to establish comprehensive retirement plans — that include a mix of vehicles, including annuities — as they live longer than men, on average, and will therefore encounter more expenses, said Caroline Dabu, vice president and head, Bank of Montreal (BMO) Wealth Planning Group, during a BMO Financial Group hosted panel last week in Toronto.
The panel, in keeping with Women’s History Month — an annual month declared worldwide that highlights contributions of women to events in history as well as contemporary society — featured BMO executives discussing issues relating to women, wealth and the financial services industry that caters to them. The panel also discussed a recently completed BMO study, “Women & Wealth."
In opening the panel, Betsey Chung, vice President and head of Marketing and Client Strategy, BMO Private Client Group, spoke about how women have different wealth needs than their male counterparts and how financial institutions need to do a better job of communicating specifically with them. Chung feels that this can be accomplished if financial institutions develop marketing tactics specifically tailored to women rather than the general public. She mentioned how women control one-third of all the wealth in North America today and as that number increases, financial service companies need to develop targeted marketing to communicate to this demographic.
Richard Mills, co-head, executive vice president and managing director, BMO Nesbitt Burns, concurred with Chung about the need for the industry to specifically communicate with women in a competent manner. He cautioned that women make investment decisions differently than men with the former usually being much more risk-averse. Increasingly, Mills added, women are acting as the CFO of their households and traditional marketing materials, designed solely for the main breadwinner in the family may be becoming increasingly obscure. “We need to engage couples as a whole and discuss the family’s wealth more than just an individual’s wealth,” Mills said.
According to recent studies by BMO on the topic, only 30 percent of women stated that they felt the industry was doing a good job servicing their unique needs as investors. Thirty-one percent of women said that they would prefer to seek financial advice from a female advisor; Mills also mentioned the importance of developing a diverse talent pool within the industry to serve the needs of specific demographics.
Alex Dousmanis-Curtis, senior vice president and head, BMO Harris Private Banking then spoke on the challenges advisors have when dealing with affluent women. According to BMO’s “Women & Wealth” study, 64 percent of Canadians agree that women have been historically left out of household financial money management decisions. Only 29 percent feel that the same is true today. When dealing with these societal changes in regard to the affluent, Dousmanis-Curtis feels that wealthy women have complex and competing priorities that necessitate a calibrated and focused plan, tailored to their specific needs.
The different mentality between female and male investors was touched upon by Viki Lazaris, president and CEO, BMO InvestorLine. Lazaris spoke on how women approach investing differently than men. Sixteen percent of Canadian women consider themselves aggressive investors compared to 30 percent of men, while 13 percent of women feel they are impulse investors compared to 21 percent of men.
“Female investors tend to be more conservative and risk-averse. They often seek out advice, prefer a more collaborative relationship, and are more open to assistance,”Lazaris said.