Wives increasingly making more than their husbands

In 1967 there were two things that could be said about married women: If they were employed, they were likely earning less than their husbands; and they were more likely to ask for directions.

While today’s husbands may still prefer to drive in circles, society has made some progress on the economic issue. According to Statistics Canada, almost a third of Canadian women earned more than their husbands in 2003, up from 11% in 1967.

The steady rise in women’s income over the past 36 years is a positive sign that the woman in the role of primary breadwinner is not likely a temporary phenomenon resulting from a recessionary period, says Statistics Canada.

As positive as they may be, however, the numbers in this regard are somewhat deceiving. In many cases, women only became the top wage earner in the family when men in high-wage and manufacturing jobs experienced bouts of unemployment.

In one in six cases, in dual-earner couples, the wife was more likely to be the primary earner if her husband was unemployed at some point. In these cases, Statistics Canada says “the wife’s primary breadwinner role may not have been intended, but rather may have occurred by default.”

Something that hasn’t narrowed as quickly is the size of the wage disparity between men and women. While primary-earner wives in managing or professional occupations made an average of $68,000 a year, men earned an average of $83,000.

While women’s earning power has become more on even keel with men, advisors note some distinct differences between the two sexes. Women tend to be more conservative and more likely to ask for help when it comes to financial planning.

The reasons for this don’t have to be complicated. Women tend to live longer than men so they are more apt to adopt a conservative approach to make sure they have something to help them in their senior years. In addition, in general women still earn less and they are more likely to be out of the workforce for longer stretches of their career.

“Their room for error is a lot less in terms of the long-term financial plans and retirement,” says Doug Lamb, a certified financial planner and principal of Spera Financial Inc. “I think that makes them a little more cautious.”

Tina Tehranchian, a certified financial planner and a branch manager for Assante Capital Management, adds another observation. “Women are worriers, they are always worrying about their children, about their family and about their own financial security as well,” she says. “Men live more for today.”

Tehranchian and Lamb differ, though, when it comes to the subject of how to deal with men and women.

In general, Tehranchian, who works mostly with women, says she finds women more willing to learn and to ask questions. “You have to be patient with them. They will ask a lot of questions but that doesn’t mean they are objecting to any recommendations that the financial planner is making; it is just that they really need to understand what they are getting into.”

Often once women have been educated about financial planning, they tend to take charge, she says. In her experience this is true as much for primary earner wives as it is for stay-at-home moms.

Tehranchian adds financial planners dealing with couples need to make sure they involve the women as much as possible, especially if they want to hold on to that portfolio for as long as possible. “If something happens to the husband and the wife inherits the money, they have no relationship with the wife,” she says. “It’s a good practice, even if the wife is not interested, to get them interested because it is for their benefit too.”

Conversely, Lamb believes men and women should be treated exactly the same. Men and women are quite similar. Some will be savers, some will want some direction and some will just say “tell me where to sign.”

One point where Lamb and Tehranchian agree, however, is that women are more likely to listen and follow and advisor’s advice. “Women are more often able to ask for and accept advice because they don’t have a male ego getting in their way,” says Lamb. “That is a big difference when it comes to the planning process.”

Filed by Mark Brown, Advisor.ca, mark.brown@advisor.rogers.com

(08/24/06)