How Advisors Can Help Women Overcome Pandemic Challenges

Featuring

Carissa Lucreziano, CFP

From

Text transcript

Carissa Lucreziano, CIBC vice-president of financial and investment advice.

International Women’s Day was founded many years ago in 1908, and since then, it’s served as a reminder for us to not only celebrate the social, economic, cultural and political achievements of women, but also mark a call to action to accelerate gender balance.

For advisors, it’s a reminder that we should take a keen interest and proactive approach to helping women build their financial confidence through education and empowerment.

The global pandemic has been a challenging time for many. However, the reality is, it has impacted women significantly and disproportionately, and there are three areas in which we’ve seen a large impact for women.

The first major effect to women has been employment. Female participation in the labour force has moved from a historic high to a three-decade low. The pandemic has many Canadian women concerned about job security and believing their career progression could have been halted or taken a back seat. According to Statistics Canada, and at its peak last spring, the Covid-19 economic shutdown directly affected 5.5 million Canadian workers, and women account for 63% of all job losses.

We know when the unexpected loss of a job occurs it results in a considerable amount of stress. And women admit to feeling this financial stress more than men. A recent CIBC poll on Canadians and investing found that women are less likely to feel financially resilient compared to men, and are more likely to worry about finances. The top concerns felt by women are insufficient emergency funds and running out of money in retirement.

Whether or not your clients have suffered a job loss during the pandemic, you can help them by providing advice around creating or building upon a safety net, allocating surplus cash flow towards an emergency fund, obtaining a line of credit and/or identifying protection options like creditor insurance, job loss insurance, disability insurance or life insurance. Although many clients may claim that they’re already covered in some capacity, you may want to encourage them to assess their overall options to flag any potential gaps. Protecting wealth is an extremely important piece of their holistic financial picture and could be prioritized in your conversation.

The second major area where the pandemic has affected women is caregiving. The pandemic has really shone a spotlight on the disproportionate role of women in Canadian households as they tend to bear the majority burden of child care, supporting the online learning for their children, household tasks and budgeting. Furthermore, the study Moms of Colour by WerkLabs specifically looked at the impact the pandemic had on moms of colour.

Of the mothers who left their places of employment during the pandemic, 22% identified as Black, 20% identified as Asian, 19% identified as Hispanic and only 12% identified as white.

The ability to do one’s job from home also revealed discrepancies based on ethnicity. One out of three black mothers and one out of four Hispanic mothers surveyed said they were unable to do their jobs from home during the pandemic, compared to only one out of 10 for both white and Asian mothers.

If you have heard similar stories from your clients needing to, or choosing to, leave their job or put their career on hold for caregiving purposes, you can help them navigate through this time by reevaluating their cash flow and then review the impact to their overall financial situation. Goals may need to be reprioritized or adjusted in scope or time horizon in order to align with the change in income, even if it is temporary.

And finally, the pandemic has impacted women significantly in terms of their health. According to a recent CIBC poll, the biggest pandemic challenges Canadian women are facing are isolation and maintaining their health. One out of three women say they’re feeling isolated from family and friends, and this was significantly higher for 33% of women versus 26% of men. Additionally, 19% said staying healthy, making time to exercise and staying active was their biggest challenge. And lastly, 15% said their biggest challenge was maintaining good mental health.

So, armed with the lessons we have learned from the pandemic, let’s focus on the opportunity to move forward and support clients with the advice they need to reset and get on the road to great financial shape.

The recent CIBC poll on Canadians and investing found that most Canadians feel confident about their knowledge of budgeting, savings and debt management, but are lacking most in knowledge when it comes to investing and retirement planning.

Investing and retirement planning are two key areas you can focus on building awareness and knowledge with clients. During your client conversations, discovery questions aimed to understand a client’s thoughts and visions around investing and retirement can help them think more broadly about their future and committing to making a plan for it. For example, questions like, what are your sources of income each month? How do you save or set money aside for your future? Tell me how you picture retirement and at what age? And how do you see your life changing in retirement?

In addition to great questions, visuals and tactical analysis through the use of financial tools, calculators and visual materials can go a long way to providing additional clarity for clients. When they can visually see how they’re tracking towards their goals of retirement and investing, it really puts things into perspective. It can be helpful to have various scenarios that articulate how much they would need to fund the retirement of their dreams versus one that would need to be managed on a stricter budget. Utilizing tools and resources can help build confidence and aid in the decisions clients need to make and plan well for their financial future.

In summary, advisors have a great opportunity to connect and make an impact with women clients as it relates to the challenges of the pandemic. Some changes may be temporary, and others may be more lasting. So, think about empowering your female clients with the education tailored to their needs so they have the confidence to make financial decisions that are right for themselves and their families. Help them build a holistic plan tailored to their financial situation that has safeguards for their future uncertainties and helps them keep moving forward to realize their goals. And last, encourage the conversation around investing and understand any barriers or opportunities for education.