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Pattie Lovett-Reid

Chief Financial Commentator, CTV


How have the financial institutions still not figured this out?

In my previous career in wealth management, I headed up a program called Women in the Know. I've written books on women and investing, conducted seminars across the country and truly believed great advancements were being made. 

Women told me over a decade ago that they wanted a seat at the table…they wanted to be acknowledged in household financial discussions and wanted to embrace investing more aggressively. At the time, they felt that it wasn't a lack of capability, but a lack of time holding them back. Simply put, there weren't enough hours in the day so investing was often delegated to other household members. 

Fast forward to today. Women have become an economic force, but the same issues still exist, so women are firing on all cylinders.

Women are a powerful demographic who are climbing the corporate ladder, increasingly becoming entrepreneurs and post-secondary institutions have witnessed the rise in the number of female graduates. 

For over two decades, I have seen financial institutions touting new strategies to target the female market - in all likelihood because it just makes good business sense. 

Yet inroads have been stalled and initiatives have been put on hold.

In a new study commissioned by BNY Mellon, data highlighted that if women invested at the same rate as their male counterparts, there could be an extra US$3.22 trillion available for investment today. That staggering amount of money is a good reason to put resources behind the initiative and move it to the front burner once again. 

Of course, there have always been barriers that have held women back when it comes to investing - when you look at the challenges in isolation, it almost always comes down to one thing - effective communication. 

The report found three powerful impediments. 

The first finding was that women were not uninterested in investing, but many were under-confident as a direct result of the investment community not reaching out to them.

The income hurdle is the second. On average, women feel they need $4,092 of disposable income each month to invest - or almost $50,000 per year. For most, that would be unattainable.

And the final challenge - almost half (45 per cent) say investing in the market is too risky for them. 

I would agree women need to take control but the industry really needs to address these basic concerns to finally make inroads that are sustainable. 

Women don't want targeted products or fancy packaging, and history will tell you they are very comfortable dealing with either sex as their advisor. What they do want is to be heard, their goals recognized and a path forward on investing that makes sense to them. 

Knowledge is a powerful equalizer. 

If the investment community gets it right, women win, the economy wins and society wins. It is long overdue that women make their money work as hard for them as they work for it. Once advisors appreciate that women want to invest according to their values and the purpose for investing isn't always about returns, that will be the firm that finally makes inroads in an industry that simply hasn't kept pace with the advances being made.