Pay Equity Law a Trigger to Discuss Finances with Women

Beth Graddon

Women in Canada earn around 89 cents for every dollar men earn. That wage gap is set to close, at least in federally regulated sectors, as the Pay Equity Act comes into effect on August 31. It requires employers in federally regulated sectors with ten or more employees to identify and correct pay disparities within their workplaces within three years. That is just one more reason financial advisors will want to engage with female clients about the impact these changes and other good news will have on their wealth management.

“This wage parity change is important news.  While women have traditionally faced several obstacles in accumulating wealth, wage parity will open new investing opportunities,” says Evelyn Jacks, President of Knowledge Bureau and author of the Knowledge Bureau’s Women in Finance CE Course.  “ As women are poised to control a more significant share of assets in the economy in the future, it follows that advisors who understand emerging financial issues for women of all ages, can provide high value advice to a new demographic of future wealth holders.” 

Specifically, this act addresses pay disparities in federally regulated industries like banking, air travel, railways and crown corporations for approximately 1.3 million people working in these sectors. The goal is to provide employees with equal pay for work of equal value and it does more than simply consider how much each gender makes while working in a similar role. Instead, the legislation requires employers to consider the skill, effort, responsibilities and working conditions for jobs when determining which underpaid salaries may need an increase.

The risk for those businesses who don’t comply? A $30,000 fine for non-compliant employers with up to 99 staff and a $50,000 fine for those that are larger.

Earlier this year, an RBC report outlined how women in the workforce have been impacted by the pandemic due to an increase in caregiving responsibilities, their important contribution to some of the hardest hit sectors, and other factors. This new legislation is a start in closing the gap…while in other areas, it’s one that’s already been narrowing.

“We have found in researching the content for our Women in Finance course that while women still earn less than men in 95% of occupations, their approach to their education, careers, entrepreneurship and investing is helping them build both income and wealth,” Evelyn notes. “A woman’s earnings in families now accounts for almost half of family income.   Most important, women are expected to be responsible for a significant rise in their wealth holdings over the next decade.” 

The course notes that women control over $2 trillion in personal financial assets today, but that is expected to increase by 70% by 2028.  Further, women are the main point of contact for their household’s financial advisor, according to a January 2021 poll from CIBC.

Bottom Line:  As the gender wage gaps continue to close and asset accumulation increases, it’s increasingly important that advisors learn how to connect and engage with their female clients. Women will need help managing and investing as new High Net Worth Individuals. Advisors who step up to the challenge of building these relationships of trust will exponentially grow their own books.  

Additional educational resources: A new mini-course from Knowledge Bureau can help advisors better connect with women on the financial setbacks they may face and obstacles to understanding how to invest with more confidence. In this course you will learn about eight specific issues women face, and potential solutions you can discuss in order to have more valuable discussions in the decision-making process.   Enrol in the Knowledge Gap Course, Women in Finance today.