|Reader alert: For more information on the female market, stay tuned for our third-annual women’s issue, which will launch at Investing in You, our annual women’s conference, on May 4.|
When Patricia Lovett-Reid’s stepfather died two years ago, the senior vice-president of TD Waterhouse Canada thought she was going to take over her mother’s finances. But, as Lovett-Reid revealed at the 2011 Marketing to Women conference in Toronto, her 76-year-old mother refused.
“She told me, ‘Just because I haven’t done it, doesn’t mean I’m not capable of it,'” Lovett-Reid recalls. “You’re never too old to be considered out of the game.”
Indeed, her mother now calls her constantly for stock advice—including interrupting a meeting Lovett-Reid was having with Ed Clark, CEO of TD Bank Financial Group, to voice concerns about TD’s dividends.
This eagerness on the part of women—old and young—to learn more about investing and money issues is a golden opportunity for advisors, says Lovett-Reid. According to the 2010 TD Waterhouse Female Investor Poll, only 30% of the 1,010 women aged 45 to 64 polled said they had a financial plan, even though 69% control their own finances.
This may be in part because often, women in a couple don’t feel the advisors they’ve dealt with are interested in their opinions. And with women living on average five years longer than men, there’s a good chance that one day, the advisor will be dealing with just the female spouse.
“If the advisor doesn’t identify with the female partner, there’s a 90% chance she will go elsewhere,” she says. “Capital is sensitive, scarce and mobile.”
Lovett-Reid also finds the women she’s surveyed are inherently risk-averse: “Women view money as a pool that can be depleted. Men view money as a stream that can be replenished,” she says. As a result, they tend to put their cash in money market funds or near-cash equivalents due to fear of losing the money.
Their financial goals are different, too. “Women find it gauche to say, ‘I’m wealthy,'” says Lovett-Reid. Instead, they prefer to be “financially independent,” and define that as being able to cover daily expenses and debt.
“Those are good goals, but I want women to dare to dream bigger,” she says. Instead, women should “make their money work as hard for them as they’re working for it,” and a good financial advisor can help women become more comfortable with risk.
Lovett-Reid’s suggestions on marketing to female investors? “Women want someone who is on their side emotionally,” she says. They also want plans tailored to their own goals, rather than those of the advisor. “It’s not rote anymore,” she says of financial planning for women.
She also notes each woman has a biological, chronological and financial age—and they’re rarely in sync. As well, women aren’t following the traditional life trajectory of yesteryear: marriage, home, then kids. Therefore, “every woman needs her own plan.”
The 2011 Marketing to Women conference, held by Marketing Magazine at the Sutton Place Hotel, also featured top Canadian marketers speaking about their experiences marketing to female consumers.