Why women’s longevity is now shaping wealth management

Katelyn Aitcheson has set herself up for the great wealth transfer. The Advisor, Sun Life with GC Financial Solutions Group Inc. is keenly aware that Canadian women are set to control $4 trillion in assets by 2028. Through their own entrepreneurship and success and through the simple fact of living longer, Canadian women now control more money than ever and wealth advisors like Aitcheson have to set themselves up to serve.

Longevity sits at the core of how Aitcheson believes this industry should be helping women to plan. For women who made their own wealth, it means preparing them to live longer and ensure their wealth can last. For women in wealthy families, it means preparing them to inherit and manage wealth that may have largely been the domain of their husbands or parents. Aitcheson’s approach to this kind of longevity planning begins by ensuring that she understands the women she serves, as people, not just as financial entities.

“I try to spend the first little portion of each meeting in what I call social hour with the client. It’s about finding out what is now. Asking, ‘how are the children and grandchildren?’ You can get a lot of information pulled out that way when it's not just diving into the numbers. Often the things that people worry about aren’t things they’re going to just blurt it out when you say, ‘do you have any questions,’” Aitcheson says. “When it comes to longevity, the retirement challenges can be very different for women. I’ve found those conversations where we engage with women to be very valuable, because women actually like planning. They’re much less likely to want to talk about the short-term nuances of the market, they want to talk about sustainable income, healthcare costs, and making sure their money lasts as long as they do.”

Will I be okay?

Aitcheson’s approach to planning for women’s longevity revolves around answering two core questions: ‘am I going to be okay?’ and ‘what’s the money actually for?’ Foundational financial planning is the core of how she answers those questions for all her clients. In drawing up those plans she can begin to introduce the idea of living to an age like 95, the idea that one spouse will likely outlive the other, and the idea that the plan can last up to and through a retirement that goes longer than thirty years. Through that planning process Aitcheson can show clients they will be okay, which she says can go a long way to reassuring women.

The reassurance that the money will last, however, doesn’t mean that women wont face core challenges. Around 80 per cent of women will end up managing family finances, Aitcheson explains, and often that responsibility comes after the loss of a spouse or a divorce. That financial decision making can be charged with emotion, and if that woman is unprepared for the responsibility then more difficult emotions can take hold. Aitcheson brings an educational focus into her meetings with clients, ensuring men and women have the knowledge and wherewithal required to take sole responsibility for their family finances.

“The best outcome is when a client never feels like they've suddenly been handed the keys to a financial plan that they didn't help build. When women are included in the process from the start, the life transitions become much less overwhelming,” Aitcheson says.

What’s the money for?

In the case of many women receiving inheritances from their late husbands, the advisor-client relationship can break down. Aitcheson says she has often been on the receiving end of those shifts, as the family’s former advisor had largely cultivated a relationship with the late husband. Aitcheson notes that as many of these surviving spouses reach out to her practice, they’ll elect to work specifically with her rather than her male partners. Women have an inherent advantage in serving other women, Aitcheson argues, which should incentivize the industry to grow the ranks of female advisors.

For advisors, men or women, who want to attract more of these surviving spouses, Aitcheson believes they need to ‘meet them where they’re at.’ That means a client intake process that focuses on deep understanding. Asking them what keeps them up at night, rather than what their expected rate of return is, can be far more valuable in building a plan and a relationship that lasts.

That understanding allows for an advisor like Aitcheson to explore that second question many women ask: ‘what’s them money for?’ She can use the planning process to show them what they might have left over, and that often prompts them to consider living gifts so they can see their wealth enjoyed by future generations of their family. Advisors who want to serve these women, Aitcheson says, need to prepare themselves to use these ‘softer skills.’

“We host events geared towards women, and we’re not talking about rates of return. We’re talking about planning for your grandchildren, or the importance of a family meeting,” Aitcheson says. “We might call those soft topics, but there’s a place for education along the line.”