Historically, women haven’t been thought of as controlling significant wealth, but that trope is quickly disappearing as trillions of dollars get passed down from one generation to the next. As part of the Great Wealth Transfer, BMO estimates that by 2028, high-net-worth (HNW) women will hold about $4 trillion in assets, an important step forward in achieving financial equity.
But it’s one thing to get that money, whether from the loss of a parent or a spouse or through a divorce; it’s another to figure out how best to manage those funds. Many women do work with an advisor, but it tends to be the same person their spouse has used, and that can be a problem.
According to a recent BMO survey1, nearly 60% of HNW women say they’re open to changing their advisor, in part because their financial professional has not built a personal connection with them. “In broad strokes, it’s really because the current advisor that either their family or their partner had been working with just didn’t foster a meaningful relationship with them,” says June Zimmer, Regional President, Western Canada at BMO Private Wealth.
While many advisors will tell you how important it is to have both people at the table when discussing financial matters, “presence alone isn’t sufficient,” Zimmer notes. She adds that if an advisor doesn’t try to understand both parties’ goals and values – individually and collectively – there’s a greater chance women may look elsewhere when they find themselves in control of the entirety of their finances.
When looking for a new financial advisor, here are a few things to consider:
Active listening
Active listening is an essential part of any advisor-client relationship. Look for someone who asks you questions about your financial goals, listens without interrupting and then reacts to your answers with more questions, treating your conversation like a discovery mission.
“It’s not inherent to ask about feelings in a financial planning meeting, and certainly not in an investment discussion,” Zimmer says. “But many of us, gender aside, are incredibly emotionally tied to money.”
An advisor who periodically checks in and asks how you feel about their suggestions, acknowledges the purpose and value you attach to your assets, and confirms you feel comfortable and informed is worth their weight in gold, says Zimmer.
Easily approachable
If, for whatever reason, you’re taking the financial helm for the first time, you may have a lot of questions. From the planning process to investment options and every step in between, the industry is full of terminology and acronyms that can be confusing, and clients should feel comfortable asking for clarification when something doesn’t make sense. This is all about you, and the role of the advisor is to help you achieve the goals and objectives you’ve outlined.
“If you need to call because you’re nervous or you’ve got questions, it should be someone who’s going to answer the phone and be available to provide you with that trusted information, advice, and perspective that you’re seeking,” Zimmer explains.
Your advisor is there to help educate and empower you every step of your financial journey and should be one of your most trusted professional relationships.
Interested in your bigger picture
For many HNW women, money can also represent agency and advocacy, and some choose to use their money to drive positive change in the world. Your advisor should know that you may want to use your money to make a difference, but they should also ask questions to refine your wishes and better tailor your approach. Making a difference with your money doesn’t stop with philanthropy – you can also invest in companies with a mandate to benefit society and the world.
“We shy away sometimes from questions about what’s important, what’s meaningful, what you hope to accomplish in your life,” Zimmer notes. “Those types of conversations have financial implications that may be more impactful to the client than the ultimate return.”
Maybe you’re looking to invest in companies working to improve the environment or advancing social causes while generating financial returns, or perhaps you’d like to grow your wealth to eventually establish a scholarship fund to assist students going to university. A good advisor will take the time to understand your unique financial goals, values and priorities, and make recommendations that align. From impact investments to donor-advised funds, there are many ways to use your wealth altruistically to generate a financial return.
“However you choose to make an impact with your wealth – personally, within your family, the broader community or on a global scale – sharing these goals with your advisor is another important part of the planning process,” she says. “It’s about giving a bit of a voice to your resources in that capacity.”
Aligns with your goals
Finding a new advisor could take time. Treat any first meeting as an interview – ask them about their approach to planning, investing philosophies, how often they communicate with clients and what the fee structure will be – and if you don’t think you align, talk to someone else.
Zimmer emphasizes the importance of coming into your own power and advocating for yourself when it comes to your wealth – something that women from the Boomer and Silent Generations may be less inclined to do.
“You can absolutely meet with a few advisors along the way and find the person who fits you personality-wise, location-wise and business-wise,” she notes. “Make sure you meet the team they work with, as you may have contact with many people in the office over time. You want someone with whom you feel comfortable and trust.”
While the advisor is ultimately the one with the knowledge and credentials to give you financial recommendations, you should feel heard and understood whenever you speak to them. Zimmer adds that if something isn’t working, you can make changes. “These matters are way too important to put your head down and carry on because you don’t want to hurt somebody’s feelings or have a difficult conversation,” she says. “This should be all about you. Ask for what you need every step of the way and remember this isn’t a static process. Your circumstances, goals and needs will change over time, and your financial plan and the advisor you work with are there to support you through all of this. ”
1 Source: RKI | Research + Knowledge = Insights, 2022-2024
