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Women & Wealth Financial Planning bmo for women business owner economy family business   |   OCTOBER 16, 2023

BMO for Women Survey: The State of Financial Planning for Business Owners
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How do women think about their wealth? What’s different about the way female business owners and company decision makers plan for various financial scenarios?  And how does it differ from men? Who do women depend on for financial advice and support? 

We conducted a research project which set out to answer these questions and give some insight into the mindsets of men and women — particularly business owners. We found that, across several different metrics, women were less likely than men to have detailed financial plans. Women said they felt less confident about a range of financial topics and were less likely to discuss important financial decisions like estate planning with their families. However, women who worked with a financial advisor were more likely to have detailed plans in place — both for their business and personal finances.

We are thrilled to present the results of our inaugural BMO for Women Survey: The State of Financial Planning for Business Owners. The survey reflects our commitment to better understand, adapt, and serve our clients and the data extrapolated from this survey will help us do just that. We are thankful for the collaboration from our commercial banking partners on this survey as we are always looking for opportunities to provide a comprehensive suite of services for all clients. We look forward to the exciting work ahead.

Shannon Kennedy, Head U.S. Advisory and Head, U.S. Wealth Management

We wanted to understand what might be different in men and women’s approaches to managing their personal and business wealth. Our goals were to explore:

  • How much knowledge people had about their finances;
  • How they planned for different financial possibilities; 
  • Who they relied on for support and advice;
  • Whether they used financial advisors and, if so, how they felt about the service they received.

We conducted an online survey of American adults between April 28th and May 8th 2023. The survey involved 898 interviews with two groups of people:

  • Business owners or Senior decision makers, meaning those who owned their own business or were in senior positions such as CEO, director or general manager of their companies.
  • High-net-worth Americans, defined as those with at least $500,000 to invest, or an annual household income of $500,000 or more.

The research included 762 business owners or decision makers, 581 high-net-worth individuals, and a nearly even distribution of men and women across the categories. Where someone fell into both two groups, we included their answers in both categories.

Key Findings

Three key themes emerged upon an in-depth review of research findings.

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Key Finding #1

Women business owners have untapped potential for improvement in all aspects of business planning.

Women business owners, as compared to their male counterparts, are lacking on all aspects of business planning. These aspects include business liquidity alternatives, stakeholder wealth transfer strategies, personal and business tax strategies, philanthropic strategies and more. This disparity is especially evident when analyzing what percentage of women business owners have an actionable plan for each category, as opposed to just considering them.

Our guidance: Continuing to work with an advisor through the maintenance phase of the business is vital in ensuring you are taking advantage of all financial incentives, both for your business and your personal finances. Our BMO BOSS - Business Owner Strategies & Solutions team, and Wealth Management team focus on your personal financial statement. We then leverage BMO Corporate Advisory to focus on your business financial planning. Together, we help you build customized financial solutions to work towards your business and personal goals.

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Key Finding #2

Women business owners have opportunity to build robust transition plans for their business.

A transition plan outlines what will happen to the business once the owner is ready to move on – that could mean they move onto the next project, retire or hand it off to the next generation, for example. Again, women business owners were lacking a transition plan as compared to their male counterparts. One of the main reasons cited for a lack of a transition plan was that they were “not planning to retire.”

Our guidance: It’s important for business owners to establish their immediate and long-term goals so that a transition plan can be put together accordingly. BMO offers a coordinated approach to business transition and personal wealth planning. The BMO Corporate Advisory team engages with business owners in a diagnostic strategic alternatives discussion to determine what the priorities are for the business owner. The team will then provide quantitative analysis for all of the different scenarios for a handful of transition options based on the desires of the business owner. Then the BMO BOSS – Business Owner Strategies & Solutions team will use notes from the diagnostic discussion to also construct a list of options for the business owner from a personal wealth perspective – tax planning, philanthropy, family governance etc. Both teams will work with the business owner before, during and after the transition of their business to ensure success.

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Key Finding #3

High-net-worth women’s financial literacy and interest levels can be improved.

While high-net-worth women expressed that they understood the importance of knowing all aspects of their personal wealth plan, they struggled to feel interested in the topic. This closely correlates to the knowledge level high-net-worth women have regarding various aspects of a personal wealth plan – women are significantly less knowledgeable about all financial topics as compared to their male counterparts. Knowledge is strongest when it comes to banking and borrowing needs and expense management, while being lowest for estate considerations and philanthropic strategies.

Our guidance: There are usually plenty of opportunities for women to seek out opportunities to learn in a fun environment. At BMO, we are focused on doing just that through our BMO for Women program because we’re dedicated to serving and exceeding the needs of women financially. Curated, educational events in “safe” settings to learn and have fun are a great way to learn. Our greatest compliment is when women get in a room and learn from each other, the presenter and walk away feeling a boost of empowerment.

At BMO, we’re committed to real financial progress for women, so they’re prepared to seize every opportunity. While the recently concluded research project provides valuable insights about how women manage their wealth and plan for their future, the need of having a wealth, especially during turbulent times has never been more important.