For some, the ideal retirement involves annual scuba diving trips to Belize and golfing at the best courses around the world. For others, it’s staying close to home to spend more time with family or taking joy in sharing their wealth with the causes they believe in.
In Rebecca Clark’s experience as Director of Wealth Planning at BMO Wealth Management, the goals of high-net-worth (HNW) women are often more aligned with the latter than men’s tend to be. It’s important for your advisor to appreciate these differences because it could influence how they develop your retirement plan, she says.
“The big difference between genders, when it comes to spending, is around philanthropy,” says Clark. “Part of it is the giving and the other is that women want to set their kids up properly.”
However, as a historically male-dominated field, wealth management professionals aren’t always attuned to those differences. Having advisors who understand the different desires of women and men is important, particularly right now, given that BMO estimates women will control nearly $4 trillion in assets by the end of 2028.
Here are three reasons why women may not always see their wishes reflected in their retirement plans – and what you can do to ensure yours are.
Lack of communication
Communication is key in any relationship, but some topics can get overlooked. Retirement is one of them. Many couples have not shared their vision for retirement with one another, which can lead to some awkward conversations with their wealth advisor.
Clark estimates about half of the heterosexual couples she works with have completely different visions for retirement, and it tends to break down by gender. “I’ll ask some questions about retirement or their children – how much they’re going to give to their kids for weddings or a house down payment or where they’re going to spend retirement – and they look at each other and give different answers,” she says.
Clark notes that women inherently tend to look for purpose and meaning in their lives, whereas men are in more of a race to the finish, not thinking beyond their actual retirement date. She recommends sitting down and talking about what retirement looks like as a couple, particularly when it comes to financial expectations like supporting kids, travel and philanthropy. Then, you can create a more comprehensive plan that encompasses both your values and goals.
Lack of confidence
Whether married or single, many women – especially from the Boomer and Silent generations – lack confidence when it comes to their financial acumen. While some single women assume they don’t have enough assets to merit a wealth management professional, other married women skip meetings with their family’s financial planner altogether because they don’t believe they have anything to add to the conversation.
“I’ve been in meetings with my parents, who are in their 80s, and the investment professional looks at my father and talk to him, and my mom just sits quietly,” Clark says. “My dad’s an accountant, so of course they talk with him, but my mom’s probably going to outlive my dad by 10 years.”
Similarly, widowed, divorced or separated women who let their husbands take the financial lead during marriage may suddenly find themselves with the remaining family money in their bank account after their spouse is no longer part of the picture, but no idea what to do with it. Maybe they’ve lost the connection to their partner’s advisor, so they're on their own. Clark notes that what starts as an “I’ll deal with that later” scenario can easily grow from weeks or months to years, during which that money isn’t growing or being put to good use.
Lack of a financial advisor
With Canadian women living approximately four years longer than men, and a different set of priorities driving them, it’s critical to have financial plans that encompass their unique values. However, BMO research shows that 20%1 of HNW women do not have an existing relationship with a wealth professional.
It may be tempting to assume you have more than enough assets to continue sharing your wealth with loved ones and charitable organizations as you grow older, but in the absence of a financial advisor, that’s not always a sure thing.
“This isn’t unique to men or women,” says Clark. “I’ve got clients who are worth $15 million, and I’m projecting they’ll run out of money because they look at this giant pot of money and think it’s going to last forever.”
Whether you want to help an adult child buy a house, pay for a grandchild’s post-secondary education or give more generously to certain causes (or all three), building a retirement plan with an advisor can help you do more with your money so you can live your best life and help others live their best lives, too.
Finding the right advisor
If you don’t currently have a financial advisor, Clark suggests getting recommendations and referrals from a few friends you consider to be financially astute. “At the very minimum, you want to interview three people,” she adds. “If you don’t like the first three, get another three names.”
She also notes that while you should interview both male and female advisors, women may connect better with other women simply because they share similar values and have a larger roster of HNW women clients.
When you interview different advisors, ask what their financial planning entails. Is it just a cash flow report telling you whether you have enough money to retire, or does it include estate planning, life insurance, children and philanthropy?
“It’s crucial to develop a financial plan that aligns with your values and goals,” she says. “The right advisor will help you do just that.”
For more information on how you can plan for your retirement, please speak with your BMO Private Wealth professional.
1 RKI | Research + Knowledge = Insights 2022-2024
