Interview with Sydney Piggott
Meet Marie-Claude Derocher, an Investment Advisor in Toronto who is passionate about helping young women achieve their financial goals.
In this interview, Contributor Sydney Piggott talks with Marie-Claude about Canadian’s high levels of personal debt, taking risks in our stock portfolios, and what it’s like to be a young women in the investment advice industry.
SP: Please describe your current position.
MCD: Finding investors and overseeing every step of the wealth management service by coordinating financial, retirement, tax and estate planning. All that while communicating our team’s investment philosophy and stock picking.
SP: WHAT DREW YOU TO WORK IN FINANCE?
MCD: In business school I was majoring in marketing and after two summer internships I felt disconnected from current issues such as the major economic recession, the Greek debt crisis, and so much more that was happening but wasn’t taken into consideration in my day to day role. Even though it can be challenging to keep up with everything that’s happening, any world event or cultural shift can be taken into consideration in investment and that’s what makes it so interesting!
I also knew that there was a pejorative perception of people in finance (especially after 2008, the Occupy Wall Street movement and much more) and part of me wanted to change that because at its core finance is the exchange of capital from people that have too much to people that need it. It’s certainly an industry that needs change but its going in the right direction and the best way to change something you don’t like is to get involved!
I also noticed the trend towards responsible and impact investing and I wanted to be part of the movement!
SP: WHAT DO YOU SEE AS MISSING IN TERMS OF YOUNG WOMEN MANAGING THEIR PERSONAL FINANCE?
MCD: 1. The first thing is that we are generally not in charge or not involved at all in the investment decisions. The industry of financial advice has not done historically a good job at catering to women’s need or just acknowledging and educating women (although this is changing, the best example is Btchcoin!).
For example, a survey was done to ask the Canadian population how much they thought they needed for retirement – 1 man out of 3 and 1 woman out of 5 said 1ML$. The majority of women answered maximum 500k$. While there is no correct answer because needs are different for everyone, this discrepancy cannot be explained other than by a mismanagement of expectations, especially since women will actually need more money than men.
An easy solution to this problem is to start early and take ownership of investment decisions in a household and to be included in every decision. I always impose on my male clients to bring their partner at least once a year. Only four percent of women decide the investment strategy of the household. These statistics are improving but are still far from ideal – in the Generation Y, 1 woman out of 8 is the decision maker in financial decisions.
We need to start early and be more aware because it’s important and empowering, and 90% of women will end up in charge of their investments at some point!
2. I don’t like stereotypical assumptions but research in North America has demonstrated that women are significantly more risk averse when it comes to their investments when it should be the opposite for various reasons.
Women need bigger wealth accumulation because We (still!) earn 75 cents on the dollar, We live longer and hence spend more for a longer period of time (on average more than two and a half years), and we spend more on health care.
In short, women need to accumulate more wealth, and higher risk means higher returns. When its done over the right time horizon and with the right asset classes, risk can be a good thing.
SP: DO YOU THINK THAT MORE FINANCIAL LITERACY EDUCATION, PARTICULARLY IN TERMS OF PERSONAL FINANCE, IS NEEDED IN OUR EDUCATION SYSTEM?
MCD: Absolutely! Canada is now the country with the highest personal debt in the world! This is especially true in cities where real estate is expensive such as Toronto and Vancouver. Debt is not necessarily a bad thing (although leverage necessarily means magnified losses or gains) but I think we lack the credit management education that should come with easy access to money. We need to start early in elementary school with concepts of savings and move on in high school from RRSP and TFSAs to debt management – credit score, mortgages, credit cards etc. Financial institutions are pushing for this education and the Ontario government is listening. What we’re missing is the call to action.S
SP: DO YOU FEEL THAT THERE ARE BARRIERS TO WOMEN ENTERING OR THRIVING IN THE FINANCIAL INDUSTRY IN CANADA?
MCD: There certainly are, otherwise there would be a better ratio of women in the industry! First of all this ratio is improving and second of all, a lot has to do with the perception of the industry, and not the conditions. In the financial advice industry in particular, 82% are men, and 43% are older than 55 years old. There is a strong momentum of organizations promoting women in finance and being proactive in recruitment and retaining strong women talent in organizations.
SP: WHAT ARE SOME INTERESTING BOOKS THAT ARE EASY TO READ AND CAN HELP MAKING SENSE OF MARKET?
MCD: The Big Short (as its often the case, the book is better than the movie!), A Random Walk Down Wall Street – The Basics of Asset Classes and Investing, Misbehaving – Behavioural Finance, and Rich Dad Poor Dad