Will our money last as long as we do? 5 Tips from a Top Financial Investor – with women in mind

August 17, 2015

“No one  taught our parents how to grow old,” says top financial advisor Janine Guenther, “but the boomer generation needs to learn new lessons, and quickly.”

Janine, who will be a guest presenter at our Designing Your Third Chapter workshop in October,  provides a reality check: 60% of women in Canada who are over the age of 60 will be single; one of our top concerns is that we will live longer than our infrastructure can support us; and we boomers are truly a Sandwich Generation – sandwiched between taking care of aging parents and looking after our kids.

“My 86-year-old mother was not able to learn how to grow old by watching her own mother,” says Janine.  “By the time my parents got to my age (47), their parents were dead.  With technology and medicine that allows people to live longer, boomers are the first generation who find themselves with both their parents and their kids dependent on them.

News headlines support this view, such as in a recent series in The Globe and Mail that read “Cultural shift squeezing retirees’ savings” and went on to say: “Seniors are increasingly running into financial problems.  From 2010 to 2014, there was a 20.5 per cent increase in the number of consumer insolvencies among seniors…”  The article makes the claim that this was often because of seniors having to help out their adult kids with everything from down payments on houses to taking them – and often grandchildren – back into the family home following divorce, job loss or other life challenges.

“Women bear the brunt of the costs, both financially as well as emotionally,” says Janine, “statistics show that many women in our age bracket are spending up to 20 hours a week caring for a relative, be it an elderly relative or a grandchild.”

When it comes to planning, Janine says that women are often the ones who control the household budget, but it is frequently the male partner who looks after the investments.  If the man dies or is no longer on the scene, women can find themselves at sea with their investment portfolio.

“Eighty per cent of women change financial advisors when there is a death or a divorce – exactly the time when they are least emotionally capable of making a great decision.  And there are now so many choices – everyone from a financial advisor, a mutual funds advisor to a Certified Divorce Specialist.  Quite frankly, there are too many choices.”

So how’s the reality check going so far?  I thought I was doing pretty well on managing all of the above, until Janine pointed out that, even if we have prepared ourselves with financial planning, wills, executors, etc, there are some other areas where we can fall down.

One of them is communicating with your loved ones, having those tough family conversations that we all like to avoid.

An example from Janine: “I worked in a family business where the patriarch had decided where the family’s money would go following his death.  No one in the family was really happy about his decisions, but no one would bring the matter up.  Finally when they started having regular meetings that involved not just the adults but the older teenagers in the family, they all became much more comfortable when they understood the how and why of decisions.”

And what if you get it all right – everything is set up, you think have money to see yourself into your old age – and then you change your mind?  Another story from Janine:  “a client of mine retired from the federal government at the age of 61.  She had done a lot of work to ensure her CPP, annuities and other financial elements were all in place.  However, a few months into retirement, she declared that she was ‘so bored I could stick a needle in my eye’.  But it was not as simple as going back to work.  She discovered that the manner in which her CPP was set up meant that she couldn’t change her defined benefits.  If she went back to work, basically all of the money she earned would go to the Canada Revenue Agency.  In the end, it didn’t make sense for her to go back to work and that was a big emotional blow for her.”

What’s a gal to do?  Here are Janine’s top tips:

  1.  Become financially literate – look for every educational opportunity you can find to become familiar with all those acronyms (TFSA, RSP, RESP, RDSP, eieio etc) and vehicles (mutual funds, stocks, bonds, ETFs, hedge funds, the list is endless!). Then use that knowledge to define what wealth management means for you.  Armed with that definition, you can then move to control a healthy financial destiny and legacy for yourself.  In Janine’s words: “don’t be a bystander”!
  1. Find a financial advisor who will truly be a partner – spend the time to sort through the various types of advisors out there: look at their accreditation (top choices: Certified Financial Planner or Chartered Financial Analyst), check their status on the IIROC (Investment Industry Regulatory Organization of Canada) website, google them and see what comes up. And Janine says: “look for a good personality fit because this is someone you should be talking to a lot”.
  1. Ask your financial advisor these two questions: How do you help people manage their wealth; and How are you compensated – do you charge a flat fee on the assets you manage or are you paid for every transaction?  The way these questions are answered will show you how well the advisor is at managing the investment process and how comfortable they are with disclosing how they get paid.
  1. Talk to your family – Janine recommends regular family meetings on this topic, set a time to have those tough conversations. Not only will you benefit, you will also lead by example for your kids and hopefully start them on a path to better control over their own financial destiny.
  1. Watch out for the “smug factor” – this is one that I added after talking with Janine, since I realized that while I could tick a lot of the boxes on what I have done to prepare my finances for my Third Chapter, I am missing out on some of the key areas such as having conversations with my husband and family about legacy planning.

Finally, Janine reminds us that “great decisions are made from a position of strength and empowerment”.  Her advice is enough to get me thinking that there are some things I need to take care of in this Third Chapter of my life!  How about you?

 JANINE GUENTHER BIO

Janine Guenther, Portfolio Manager and Investment Advisor for CIBC Wood Gundy will be a guest presenter at the Designing Your Third Chapter workshop.  Janine has a particular interest and expertise in working with women at this important stage in their lives.

 Over 24 years in the financial services industry, Janine has built up a treasure trove of experience on where people go right and go wrong in the Third Chapter of their lives.  She will share with us her anecdotes, top tips on planning and avoiding financial pitfalls.  Among the topics she will touch on are: understanding the economics of downsizing your home; planning for a long life – what does this mean for your career; the Sandwich Generation – financial planning for your parents, your kids and you; and how to take a practical approach to family meetings on this critical area.  Janine will make a special, interactive presentation to the workshop and be available throughout the weekend to answer any individual questions.

 In addition to having worked for a major investment firm and two leading national banks, Janine’s experience includes managing the office of a well-known Canadian family.  She has been a member of a several Canadian and international associations that support the financial services industry.  She had a 25-year career in figure skating as an internationally ranked judge and volunteers with several BC community groups.

 Janine is based in Vancouver and, while she is still a few years away from hitting the magical age of 50, she has it in her sites!  More information on Janine can be found on:  https://www.cibcwg.com/web/janine-guenther/who-i-am