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Bridging The Confidence Gap Between Women And Wealth

11/20/2015 02:08 EST | Updated 11/20/2016 05:12 EST
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African American businesswomen talking in meeting

What do women want when it comes to investing?

Canadian women are more optimistic than men about their financial futures yet evidence suggests they may not be as confident. The results of our first-ever Investor Sentiment Report show that women are upbeat yet cautious and ready to lean in when it comes to their finances.

Women are 20% more likely than men to be optimistic about their personal financial situation but less than half as likely to have a positive view on the country's economic future. Women are also twice as likely to describe themselves as a novice or beginner when it comes to investing. In my experience, women are far more likely to answer this question honestly while men can sometimes overestimate their investment knowledge and their ability to achieve their financial goals.

Another eye-opener from the report is risk -- women worry, and that becomes apparent when it comes to money. Women are over 60% more likely than men to say they are somewhat or highly risk averse. This runs counter to a unique issue facing women, and that is longevity. A baby girl born today is expected to live to 84 and a woman who celebrates her 65th birthday can count on reaching 86, according to Statistics Canada. This compares to a male life expectancy of 79 and 83, respectively. Being too risk averse can severely impact your ability to provide for yourself over a long period of time. As many as 9 in 10 women will be solely responsible for their finances at some point in their lives. This means they have to take charge as soon as possible so they develop a foundation of knowledge and comfort in managing their finances.

Women have to realize the impact that overly conservative investing can have on their ability to reach their goals. Cash flow projections can help illustrate the implications of cautious investment decision-making over time. Outliving savings can be a real concern and women may need to take on a little more risk. Women may be investing conservatively because they aren't aware of other investment options. They also want to develop a relationship with an advisor they can trust to properly advise them of their options.

Here are a few things to keep in mind:

Money tips for women

Make the time. Women tend to procrastinate when it comes to money. When busy, it can fall to the bottom of a list of competing family and career priorities. But the bottom line is it's much easier to learn and plan for the future when you're not in crisis mode and when you have a longer time horizon. It's a good idea to plan carefully with a trusted advisor and make deliberate decisions that are based on your goals and comfort.

Focus on your goals. Is it buying a house, saving for your child's education or retirement? An advisor can help you develop a plan to meet your savings goals in the short and long term. Pay attention to how your investment portfolio can help you meet your goals. Everyone's financial situation is unique -- and while family and friends may be a good source for life advice -- remember that what worked for others might not work for you when it comes to an investment, insurance or estate plan. Use a trusted and qualified investment advisor.

Ask your advisor lots of questions. Don't be afraid to ask for clarification on topics you're not familiar with. Your advisor should be able to explain different concepts to you in a manner that you understand. It's important that you are comfortable with factors at play when it comes to your financial plan.

Plan for bumps along the way. An unexpected divorce, the death of a spouse, an illness or a spouse's illness can all throw a wrench in the best-laid plans. An advisor can help you with a holistic plan that works with you over time and adjusts to life's uncertainties.

Turn procrastination into action -- don't let your personal finances get lost in the shuffle. Speak with a financial advisor to get started sooner rather than later. Knowledge and advice can help women at all stages feel more confident and build brighter financial futures.

This article is provided for general informational purposes only and should not be considered specific financial advice. For advice specific to your circumstances, please speak to the appropriate tax, investment or insurance adviser.