More involved in finances when spouse is out of the picture: TD
TORONTO, Nov. 5 /CNW/ - Of all the significant life events that get women
more involved in managing household finances and investments, divorce is the
leading trigger - far ahead of childbirth, job loss, retirement or illness. In
fact, events involving a woman's spouse or partner have a more profound impact
on her involvement with household financial management than events that impact
These are the findings of the 2007 TD Waterhouse Female Investor Poll, an
annual study of Canadian women's attitudes towards investments and financial
planning. The poll, conducted by TNS Canadian Facts, surveyed 995 Canadian
women between the ages of 25 - 69 who have sole or shared responsibility for
household financial planning or investment decisions. It asked whether a
series of major, life-changing events had happened to them and, if so, whether
it caused them to become more or less involved in managing their household
finances and investments or if it had no impact. Some interesting trends
Events which involve a woman's spouse/partner have the greatest impact on
her involvement with household financial management. Among women who
experienced specific major events, sixty-five percent became more involved in
their household finances after a divorce, 61% after a spouse or partner became
ill or disabled, and 59% after the death of a spouse or partner. By contrast,
only 47% became more involved after personally becoming ill or disabled, 46%
after losing their own job and 43% after the birth of a child.
"Clearly, women experience the loss of a spouse or partner as more
devastating to their financial situation than major changes they might undergo
themselves," says Patricia Lovett-Reid, Senior Vice-President, TD Waterhouse
Canada Inc. "This suggests they are overly reliant on their partners with
respect to financial planning and managing household investments."
While almost two-thirds of divorced women say that divorce led them to
become more involved in their finances, only one in six women (16%) have a
financial "Plan B" in the event of divorce.
"Nobody likes to think about divorce, let alone plan for it," continues
Lovett-Reid. "But almost four in ten marriages end before the thirtieth
wedding anniversary, and experience tells us that divorce tends to impact
women more harshly than men. This raises the question why more women aren't
getting more involved in their finances and investments while they're still
married - or while their spouse or partner is still employed and healthy."
For most life events that don't necessarily involve a spouse or partner,
respondents who experienced them are fairly evenly divided among those who say
it made them more involved in their finances and those who say it had no
impact. In two categories - job loss and becoming ill or disabled - one in
five women who experienced it say it led them to become less involved in
managing their household finances.
The poll examined contingency planning; that is, what kinds of potential
catastrophic events are most likely to induce women to develop a back-up
financial plan, or a 'Plan B'. Two threats emerged as most likely to trigger
preparing a Plan B: the sudden death of a spouse, and serious illness to
themselves, their spouse or dependents. Yet, six in ten women still have no
plan to minimize the impact of these two events, and seven in ten or more have
no plan for living longer than expected, sudden job loss, a crash in the
housing market, divorce and so on.
As women get older, they are more likely to have a Plan B for many of
life's unexpected turns. Thirty-four percent of women aged 25-35 have a plan
for catastrophic illness or disability to themselves, a spouse or dependent
versus 48% of those between ages 46 and 69. Sixteen percent of 25-35 year olds
have a Plan B for the possibility for living longer than they expected,
whereas 42% of those aged 56-69 have such a plan.
"When I speak to women about their finances, I often ask them if they
have a 'Plan B' if life doesn't turn out exactly as they planned, which
usually involves being in a great marriage or relationship, having a good job
and being blessed with financial security. Most do not, and my advice to them
is straightforward. I tell them that their Plan A is going to feel a lot more
comfortable if they have a Plan B to back it up."
Other Key Findings
- While a large majority of women (87%) are satisfied with their life
overall, they are somewhat less satisfied (59%) with their household
financial situation when compared with other aspects of their life,
such as family, their home and their work.
- Just over half of Canadian women (55%) consider themselves
"financially successful", but less than 1-in-10 feels they are
"very successful". Women aged 55 to 69 are most likely to consider
themselves financially successful (60%), while those aged 36 to 45
are least likely to do so (48%).
- From a regional perspective, women in Atlantic Canada are
significantly less likely to consider themselves to be financially
successful than their counterparts elsewhere in the country (38%).
Women in Quebec have a more relaxed approach to most aspects of
financial management and investing than their counterparts in other
parts of the country.
- While at least three-quarters of women are somewhat or very confident
that they will be able to achieve their specific financial goals,
almost the same proportion (69%) does not know how much money they
will need to accumulate to meet their retirement goals. Those who do
know estimate the required nest-egg to be $712,600.
- Women are not doing as much as they should to ensure they reach their
- Only one in four have a formal financial plan.
- Most have not made a financial back-up plan to minimize the impact
of unexpected events. For example, 84% have no back-up plan for
divorce, 58% have no plan for serious illness or disability, and
57% have no plan for the sudden death of a spouse.
- Only 52% of women indicate that their role in the household
includes dealing with a financial professional, and only 50% are
involved in managing their investments.
- While women appreciate the importance of investing, 50% admit to
not knowing much about it and say they are happy to defer
investment decisions to others.
"With age comes maturity - and a greater propensity to have a Plan B to
deal with unexpected twists of fate," concludes Lovett-Reid. "The problem is
if you wait too long to develop your Plan B, the number of years you'll have
to grow it financially are limited. It's vital for women to be realistic about
the turns their life might take, to develop a Plan B, and to start building
assets within that plan so they will be fully prepared for whatever life might
have in store."
The 2007 Female Investor Poll was conducted for TD Waterhouse using TNS
Canadian Facts' online panel. Respondents for the survey were women aged 25 to
69 who have sole or shared responsibility for household financial planning or
investment decisions. A total of 995 women participated in the online survey
between September 14th and 19th, 2007. Final data are weighted to be
representative of women by age and region.
TNS is one of the world's leading market information groups, providing
market measurement, analysis and insight through its operating companies in
70 countries. Working with national and multi-national organizations, we help
our clients develop effective business strategies and enhance relationships
with their customers. In Canada, TNS Canadian Facts provides full-service,
primary market research. Its mission is to become clients' sixth sense of
business(TM) by giving them a deeper understanding of their customers'
behaviour, better anticipation of their actions and greater insight into what
they really want.
About TD Bank Financial Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as
TD Bank Financial Group. The Bank serves more than 14 million customers in
four key businesses operating in a number of locations in key financial
centres around the globe: Canadian Personal and Commercial Banking, including
TD Canada Trust as well as the Bank's global insurance operations (excluding
the U.S.); Wealth Management, including TD Waterhouse Canada, TD Waterhouse
U.K. and the Bank's investment in TD Ameritrade; U.S. Personal and Commercial
Banking through TD Banknorth; and Wholesale Banking, including TD Securities.
The Bank also ranks among the world's leading on-line financial services
firms, with more than 4.5 million on-line customers. The Bank had $404 billion
in assets as at July 31, 2007. The Bank is headquartered in Toronto, Canada.
The Bank's common stock is listed on the Toronto Stock Exchange and the New
York Stock Exchange under symbol: TD, as well as on the Tokyo Stock Exchange.
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