Group's goals include raising women advisors' visibility and influence.
As you know, the dynamics within the financial services industry are in a state of rapid transformation. Today's financial providers are facing many challenges, such as contracting asset growth, client retention and low barriers to entry that encourage the proliferation of products and competitors. In addition, all of us working in the industry of investment management are charged with the duty and obligation of regaining our credibility, and putting the client and their best interests at the heart of our interactions.
The drivers of industry change and major trends have also helped to redefine the landscape of investors, as well as providers of financial advice. Many firms are aggressively creating products and services that will attract and cater to the affluent client. Attracting a more affluent clientele calls for positioning a firm, or the rapidly growing independent financial practitioner, to service clients who sometimes have more complex and sophisticated needs. In addition, incorporating processes and procedures that support a client-centric advisory practice while enabling a level of consistent, high-quality service is vital to this segment of investor.
One very lucrative and growing segment of the investing population that has caught the attention of firms today is that of the affluent women's market. Women & Co. states that 40% of households with $600,000 or more in assets are now headed by women, and 23% of women out-earn their husbands. Overall, annual income in households headed by women grew 29% from 1993 to 2000-the biggest jump among all households. A representative from the Merrill Lynch international private client group in London states that they have seen basically a near doubling of females in the financial markets. In North America, they state that women already represent 43% of the high-net-worth segment, and the percentage is expected to continue to grow.
With women's growing financial clout and increased authority in the decision-making process, some financial services companies are making a broad shift in rolling out smarter, more focused initiatives that market to female investors and business owners, appealing to their diverse needs. Women want and value relationships, education, respect and a genuine interest by the financial provider in understanding them and their families. In return, women investors tend to be very loyal clients and provide many more referrals to their financial advisors. For those who can capture a portion of this market, it should prove to be a very rewarding and lucrative venture.
As firms target the affluent women's market, they are also scrambling to roll out a variety of very concerted initiatives to recruit women advisors. Men still dominate the industry, constituting approximately 70% of financial advisors and three out of four Certified Financial Planner licensees. Firms are now beginning to realize that women advisors are a key to expanding relationships with not only affluent women clientele, but also with men. Clients see women advisors as very competent financial advice providers. They also feel women advisors are good listeners, empathetic, caring and professional, and have their best interest in mind. Some years ago, another publication included a research article reflecting that women tend to receive higher marks than men from clients, especially in the area of creating stronger client relationships.
Women advisors also tend to run very productive practices. According to FP Transitions, the median sales price of a financial advisory practice is $427,500 for women and $423,000 for men. However, practices run by women average just 180 clients vs. 260 clients for men. Although women do not represent a significant percentage of the overall financial advisory profession, it's evident they are making important inroads into financial services.
Another characteristic of women advisors is that they share a desire to become as highly qualified as possible. They feel the only way they can expect to improve their reputation within the financial services industry is to develop a large body of well-qualified, credible advisors. They understand this takes some time, but over the past few years, women advisors have been quietly working to improve themselves and raise the professional standards within the industry.
The Women's Interfinancial Network
Independent financial advisors and investment firms face the pressure of increasing competition and difficult markets, which present a challenging environment that involves balancing business demands and limited resources, recruitment and retention of competent, trustworthy professionals and fostering a firm culture of success-all while positively affecting the bottom line.
In mid 2002, as my own company faced these same challenges, I began conducting research for changing our business model from that of the traditional stockbroker to supporting independent financial advisors. The research and statistics on women clients and women advisors were disproportionate-and surprising. As a result of my findings, I decided to create The Women's Interfinancial Network (WIN). The idea was inspired by my own experiences over a 23-year financial services career and my wanting a vehicle to raise the profile of women advisors for more visibility and influence within our profession. To date, there have been few leaders or role models for women to emulate in the financial services industry, and the recruitment has been very inadequate.
WIN is being created and specifically designed for women independent financial advisors (and those who aspire to be). My vision for WIN is to encourage the recruitment and development of women independent financial advisors into a profession that is a highly rated career option. Jobs Rated Almanac ranked financial planning No. 1 in 2001 and No. 3 in 2002. These ratings are based on criteria such as work, environment, income, employment, outlook, physical demands, security and stress. This combination of attributes and flexibility makes the profession highly desirable for women. According to the Financial Planning Association, median total compensation-base salary plus any bonus or commissions-for financial advisors is $75,000, and independent advisors who run their own business take home $118,950.