Perhaps the primary driver of women’s place in the wealth transfer is simple longevity. Women live longer than men and are therefore more likely to inherit the wealth held by their husbands. That is a more established trend through past generations, though, and Bull notes that now we are also seeing a large cohort of women entrepreneurs and high income earners impact the Canadian wealth space. More women earn, more women manage their own money, and more women are preparing to leave their earned wealth to the next generations of their families. Advisors, Bull notes, need to be aware of all these dynamics.
Gaining and retaining that awareness, Bull notes, comes from a combination of macro forces and micro stories. She believes advisors need to stay aware of these core demographic trends while listening closely to the unique circumstances their client finds themselves in. They need to prepare themselves and their clients for the inheritance of assets that aren’t always as simple as cash.
In the case of divorces or spousal death, there might be private shares, company shares, or RRSP assets that end up going to women who might not have expected these assets. Liquidating them might come with significant tax consequences, especially if they were long-held and carry very low adjusted cost bases. Life insurance assets, conversely, can be extremely tax efficient. In the case of a spouse’s death, real estate assets can roll over without incurring a tax bill either. In cases where she is preparing a family for spousal inheritance, Bull will often recommend holding certain assets jointly to better manage tax consequences.
Talking through a few hypotheticals, Bull first outlined how she might approach a female client who had worked in the home, not managed family money, and who has just lost her husband. Bull explains that her work in preparing that woman would have begun before her husband passed. No matter that woman’s initial level of financial literacy, comfort, or interest, Bull says that as her advisor she should encourage this client to get involved to the extent that she can. In doing so, she can help close that confidence gap and root her understanding of finance in her understanding of the family’s overall security and wellbeing.
In creating the space to encourage women like this hypothetical client to develop greater financial literacy, Bull notes one dynamic in the industry that she believes can discourage people with less financial literacy or overall interest. While not exclusively a male dynamic, she notes that many male advisors and clients can end up bonding over conversations about central bank decisions or semiconductor stocks or other pieces of “CFA gobbledygook.” For clients who are baseline less interested in macro stories and more concerned about family wellbeing, those topics can prove alienating. Bull doesn’t advocate for expunging those macro topics from the conversation, but she notes that some cognizance of who these conversations can exclude may be helpful in broadening the reach of financial advice.
