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Wealth Planning For Women: An Insider's Look At Where To Start

RBC Wealth

Women have often been thought of as a niche market for financial advisors looking to grow their business. Imagine--half the world’s population, a niche market!

I’ll readily admit, however, that many women do look at investing differently than their male counterparts. For example, when female investors are asked why they got started, the answers are a bit different than the more aggressive and more quantitative--“getting to the bottom line”--reasoning of male investors.

Women tend to look at investing as a way to be financially independent and take control of their money. They want to look after themselves, regardless of circumstance. They also want to build their financial education and, most importantly, their wealth. Returns are important, but so is long-term planning based on real, tangible goals, such as children, owning their own businesses, retiring at a certain age or supporting grandchildren.

So what is holding back the majority of women from engaging in investing and planning for their future? A puzzling gulf between action and paralysis is keeping women from moving ahead and either opening that investment account or meeting with that advisor to get started--and it's leaving the financial industry scratching their collective heads.

Is it a concern about past financial “transgressions”? A lingering credit card debt or a lack of knowledge surrounding retirement accounts? Is it a busy, professional woman’s lack of time to deal with the important things now and ability to constantly reprioritize the less enjoyable items to the bottom of the endless To-Do list? Or is it a healthy fear of the unknown? As women tend to outlive their spouses, it’s estimated they will be managing the majority of the wealth that will pass to the next generation.

On a more sobering note, 80 per cent of North American women will switch financial advisors within a year of their husbands’ death, according to a recent survey from Strategy Marketing. There is an approaching tidal wave of women looking for a new way to be serviced by the financial industry -- pairing planning and building a trusted relationship with the whole family, along with comprehensive wealth management expertise. Ensuring you have the right advisor, and the right plan accounting for your needs and goals, is key for a successful relationship. The best wealth plans are flexible, living documents, which are reviewed often, so life can happen along the way.

When women ask “How will I know what to invest in”--whether this investment will be with an advisor or on their own--the well-received counsel I’ve been given myself and now give to others has been: Invest in concepts you understand. Invest in what interests you and what you support, financially and emotionally. Look at your core values and ensure that you (and your advisor) invest appropriately. And most importantly, invest in yourself. Make sure that you’re able to live your life.

As Benjamin Franklin once said, “If you want something done, give it to a busy person.” Many busy, professional women would rather invest on their own versus using an advisor to guide their investments. While all our lives are different, it is always good to decide if you want to become an educated investor, or if you’re simply trying to save on fees. Either way, take action with your money. If you are interested in investing, do your research, take the time to build your knowledge, practice what you learn and ask questions to build your confidence. If you aren't interested, or know you don’t have the time, the fees you will pay an adviser you trust will be worth the peace of mind that something is being done.

We live in a complex world and have so much responsibility that financial management is often that last “To Do” on our list. As women, we tend to be our own worst enemy in these matters. Investing isn’t as complicated as you think, however; and the sooner you get started the better. Have a detailed plan, follow the news and watch the trends and patterns. Think of investing as a way to view the broader world and wealth planning as a way to view your world.

RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.