Women’s Wealth: A Changing Landscape

Length 3:09

Katherine Judge, Economist, CIBC World Markets

"We estimate that women control $2.2 trillion of financial assets in Canada, and that's a result of women increasing their participation in the labour market, which has resulted in income gains for women. Especially during this economic recovery, an increase in participation for women has been responsible for a lot of the job gains that we've seen. Women have actually accounted for over 50 percent of the gains in full-time positions that we've seen. Women tend to get married sooner in life and they tend to also outlive men. So on average women may outlive their spouses by about six years. So that suggests that women will become, as the population ages, in control of a greater amount of wealth. So we estimate that by 2028 women will control just under $4 trillion in wealth. And that's just in financial assets. If you include real estate that would more than double. So women are becoming a more important driving force in Canada's economy but those returns can be amplified if the wealth management profession evolves to take into account different preferences for men and women in investing.”

The gender wage gap

“The gender wage gap is narrowing. The positive news is that as women have increased their participation in the labour market they're actually increasingly landing roles in higher paying occupations. But still women's participation rates are below those for men. So there is more that can be done there. Women are also three times more likely than men to take a break from the workforce. That's another factor influencing that metric.”

Employment income vs. investment income

“From 2011 to 2016, men and women have seen roughly equal employment income growth but when you look at growth in investment income men far surpass women. Investment advisors need to eliminate the gender blind approach, they need to cater more to women because women, as the population ages, will be in control of a greater share of Canada's wealth. They also report that they are less trusting and less confident investors. So those are all things that wealth management professionals need to take into account.”

Next steps?

“Women are actually still overrepresented in part-time positions, so despite the gains that they've made. Another thing that I mentioned is that even though women's increase in participation has facilitated job gains since the recession, the participation rate is still below that for men. So there are still things that need to be addressed there. We've seen one example of policy in Quebec where subsidized daycare has helped draw more women into the workforce. That's one example of a policy that can be used to increase female participation.”