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Loss of spouse triggers financial "Plan B" for women
More involved in finances when spouse is out of the picture: TD Waterhouse poll 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 her directly. 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 emerged. 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 financial goals: - 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. About TNS 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.
For further information: Stephen Ledgley, NATIONAL Public Relations, (416) 838-1376, email@example.com
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