Sunday, September 23rd, 2018

Women and Money: How gender affects financial decisions.

By Tracy Theemes and Kamal Basra on Oct 14 2009 • Filed under Women and the Power of Money

Tracy Theemes and Kamal Basra

Q: How are women different when it comes to investing and managing their financial affairs?

Women currently own half of the financial assets in Canada and projections are that the number will rise to 70% by 2019 (Oppenheimer Funds, 2005 Report on Women and Investing). Tom Peters identifies this trend as a “demographic tsunami.” This presents an enormous opportunity for women. With this kind of economic clout we should be able to influence decision making at all levels of society and could alter the course of political and social change in Canada and the US in unimaginable ways.

Yet, even in the midst of this economic groundswell, the majority of women profess feelingunder-served and disenfranchised from the financial services industry. Only 8% of financial advisors in Canada are women. There is clearly a mismatch here between service providers and need.

Women also face a variety of gender-based financial issues. We live longer and often have interrupted careers. This leads to a variety of issues at both economic and social-cultural levels because professional women who stay out of the workforce for a decade are clearly no match against male counterparts when competing for partnerships and higher management roles. They have a lot of time to make up for.

From a socio-cultural perspective, women tend to be society’s custodian of social order and values and our financial decisions are often values based (Ad Edge, 2001; Yaccato Group, 2002). Women place an emphasis on the process of decision-making and collaborative interaction (Trendsight, 2000). Neurologically, women are wired for top-down, big picture overview (Psychology Today, 2003) and see money in the context of their whole lives and not as a detached, separate entity. The way financial delivery systems are commonly set up tends to truncate these inclinations resulting in women’s continued sense of frustration and isolation. Unfortunately, many women believe there is something wrong with them and their ability to understand finances. They do not identify that the delivery of information has been inappropriate for how they think and the circumstances that their gender places them in.

"Only 8% of financial advisors in Canada are women."

If you ask the majority of women about their biggest worry, it is that they want to know that the decisions they are making are the most responsible ones possible. They want to be assured that they have stewarded their resources well and that decisions were well thought out and made to the best of their ability. They seek a trustworthy advisor, transparency in process and the reassurance that authentic communication brings. They do not seek false promises and patronizing lingo-speak. To achieve this requires self-advocacy from women themselves and the assistance of advisory firms and professionals who are willing to learn new ways of presenting financial information and more relevant ways of communicating.

In short, women present unique challenges and opportunities in several critical facets of their financial lives. Circumstances such as life expectancy, motherhood, and having lower lifetime earnings create both obstacles and possibilities. We are wired differently, we communicate in a context of life goals and personal values, and we are raised in a social and cultural world that is not always hospitable to our natural financial predilections.

When women are given the facts and data about how they can best learn to manage their financial resources they feel motivated and inspired. As we approach the day when women control the majority of Canada’s assets, it is imperative that we become more financially empowered and confident. We want to fully exploit this unprecedented opportunity to create true societal change.


From the authors: We look forward to addressing many of these concerns in more detail in future columns. Watch as we propose some novel solutions for claiming our financial power for the betterment of us all.

This article is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision. The information contained in this article was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. The views expressed are those of the author, Tracy Theemes and Kamal Basra, Financial Advisors, and not necessarily those of Raymond James Ltd. Raymond James Ltd. is a member of the CIPF.


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