Why women will control half of all accumulated wealth in Canada

iStock Photos

By 2026, women in Canada will control nearly half of all accumulated financial wealth. However, traditionally many women have not been included in wealth management conversations, leaving a wide knowledge gap.

That all needs to change, say Manning Elliott LLP CPAs Sheryne Mecklai and Inder Mandar. Both tax consultants say a lot of future women-owned wealth will come from inheritance. In fact, Canadian women are expected to inherit $900 billion over the next decade. Women typically outlive men, but men are often the ones in control of their shared wealth.

"There's going to be a massive transfer of wealth," said Mandar. 

Information intake 

Manning Elliott has launched a group that focuses specifically on understanding the needs of women and wealth, providing targeted business advice and tax planning. Mecklai says Manning Elliot had a client whose husband controlled, then sold their business. Now, both are sitting on a great deal of wealth. But the husband is quite elderly.

“There’s a likelihood that he will pass first, and the wealth will go to her. Now she's coming to the meetings, and you can see she's trying to understand what's going on, but it is confusing," Mecklai said.

Mecklai says that despite the slow rise of gender equality in Canada, many women are still not taken seriously when it comes to managing business and finance.

“I've been in meetings where people kind of brush women's concerns away, saying, ‘Don't worry about it, we'll deal with it.’ I can see the women thinking, - "I have to worry about it. It's my money too."

Women’s financial objectives, necessities and risk levels can be different from those of men. Mecklai says a lot of this has to do with the fact that women inquire about financial information in a different way than men do. 

“I believe women think a little bit differently," said Mecklai.

“They need to believe what you're telling them. So as a tax partner, if I recommend an estate freeze, and tell my client the benefits of the freeze, the women ask a lot more deep-dive type questions."

Those deep-dive questions are the ‘when,’ ‘why’ and ‘how,' Mecklai says. Generally speaking, women inquire about the exact steps that need to be taken and their consequences. Others may simply look at the bottom line and make a decision based on saving money, but women dig into what the process is going to be. 

New approaches

But tax and wealth experts need to also adjust their advisory approaches to target women specifically.

“A lot of the advice provided currently is typically based on male data that’s out there,” Mandar said. 

For example, investment advice was being provided to females using data and algorithms based on standard 65-year-old males, says Mandar.  

Going forward, women need proper investment advice to secure maximum returns on their investments. Mandar says that women should seek out financial planning advice before taking on all the responsibility. 

“I really want to see women being included in the conversation. Oftentimes, when we're talking about providing tax planning advice, or setting up companies, or whatever it may be, the spouses are often left out of the conversation,” she said.

Women in business

Canadian women are expected to report a total annual income of $500 billion within the next few years.

The number of women-owned enterprises in Canada is growing at a faster pace than male-owned enterprises. A lot of that is due to the online market, according to Mecklai. 

Both Mandar and Mecklai say that traditionally, women have stayed out of running businesses due to child caregiving responsibilities. But now online businesses, like Etsy endeavours, provide women with flexibility in their work lives. 

“I think a lot of it is driven by the flexibility of being an owner-manager, and also the ability to manage their schedules, staff and clients,” said Mecklai. 

The business landscape is changing, says Mecklai. And equality in both wealth and business leadership is the future.