During World War II, Rosie the Riveter started a woman's revolution by working in factories. Since then, women have made their way into all sectors and levels of the workforce. Today, an increasing number of families in the U.S. have a female breadwinner. And although the salary gap between men and women still exists, according to the U.S. Department of Labor, it is shrinking.
What about the financial services industry, specifically? In November 2009, as reported by FINRA, there were 642,689 registered advisors in the U.S. And according to research firms Cerulli Associates Inc. and Prince & Associates, there will be 400,000 financial advisors in the U.S. by the end of 2010. But accurate data on the number of women in our business is hard to find. More helpful are figures shared by the Financial Planning Association; it has 23,814 members, 27.6% of whom are women. Among the 61,971 CFPs in the U.S., 23% are female.
So, clearly, women are the minority. There are a few commonly cited reasons for this:
Typically, by middle school, girls begin to score significantly lower in math than boys. By high school, this influences their choice of courses and, ultimately, their career paths, as they shy away from math-related careers. Although relationship skills trump math skills in the daily work of a financial advisor, one can understand why a young woman might not choose it as a career. "Financial advisor" means money; money means numbers; and numbers mean math.
Women also lack role models in the business and awareness about the field. Financial advising is still a relatively new industry, not as well understood as careers in academia, health care and technology. Because there are fewer women in financial services, there are fewer role models to spread the word that the profession offers excellent opportunities for women.
After the birth of a child, some women work part time, some stop working for a few years, and others leave the workforce entirely. If a woman does continue her career, she then typically holds two jobs-one outside and one inside the home. While traditional roles may be shifting, we cannot ignore the fact that this presents challenges, particularly for women in financial services. For example, clients' financial goals and needs alter with changing circumstances, and circumstances can change quickly. It is unlikely an advisor can step away for a few years and expect her clients to be waiting when she returns. Stepping away typically means starting over.
Evolution: The Profession's Embrace Of Woman
How do female advisors overcome traditional barriers? The answer appears to be: one advisor and one story at a time. What follows are the stories of four successful women who have been in the industry for 30 years or more.
Deb's story. Debra Brede of D.K. Brede Investment Management Company, Inc. in Needham, Mass., had been planning to attend medical school, but first went to work as an assistant in a wirehouse the summer before she was to start her premed program. But sometimes when you're planning other things, life takes over.
She learned her role quickly, displaying a talent for solving operational problems. When her supervisor suddenly died, she got a promotion. As it happened, the firm was about to merge, and she became the "go-to" person sent to address operational issues at multiple branches in the newly formed organization.
After so many twists of fate, Deb put aside medicine and instead decided to become an advisor. After an 18-month training program, she began to build a solid book of clients by working many hours, including weekends.
Working in the wirehouse channel for ten years, Deb observed how pregnant woman were treated. Because she hoped to have a family, she decided to take matters into her own hands, moving to the independent channel to start her own firm.
Her competition early in her career was "grey-haired Ivy League guys." To prevail, Deb believed she had to take her performance up a notch by studying to become a registered municipal principal, a registered options principal and a qualified pension specialist. She always felt she was more on the ball than her colleagues.
Her work paid off. Deb has been named to the Barron's list of the 100 top woman financial advisors for five years.
Erin's story. Erin Botsford, the owner of the Botsford Group, came from a family of modest means whose fortunes took a turn for the worse after an auto accident left her with enormous debts while she was still in her teens. Erin learned a powerful lesson early in life: "Money buys choices." The accident motivated her to finish college and pay off her obligations during the following decade.
Erin later entered a training program at A.G. Edwards and worked every day for seven years. Still, she was told by one supervisor, "Honey, I hate to disappoint you, but you are going to fail." That served as a motivator, leading her to work even harder, conduct seminars and grow her book of business.
Ultimately, Erin switched to the independent channel, opening her business, which now has offices in the states of Texas, Georgia and New Jersey. She believes the stereotype that women are more nurturing is correct and that it is an asset in the industry. Erin has been named to both the Barron's top 100 women financial advisors list and the top 100 independent financial advisors list in the U.S.
Deena's story. Deena Katz, a partner in Evensky & Katz Wealth Management in Coral Gables, Fla., and an associate professor of personal financial planning at Texas Tech University took a different route into the industry. After obtaining her CFP license in the early '80s, she immediately launched Women in Transition, a company that tailored services to widows, divorcees, and single women.
She remembers the days when women in the industry were rare, "There were no mentors and female advisors. Sometimes we weren't taken very seriously." Moreover, it wasn't only co-workers who harbored stereotypes; clients also held them. One day, Deena was introduced to a client by a colleague in the firm that Deena owned. The client looked at Deena and said, "Nice to meet you. Get me a cup of coffee, dear."
But Deena's name has become well-known throughout the industry. She's been named as one of the 25 most influential people in the personal financial planning industry, taken leadership roles with the FPA, and authored multiple books. In addition, she was named an outstanding teacher of the year at Texas Tech in 2009.
Alex's story. In the '60s, Alex Armstrong of Armstrong, Fleming & Moore Inc., Washington D.C., was a secretary for a regional stock exchange. She was asked to get registered and assist one of the firm's female advisors. "At that time, it took a fight to even get me registered," Alex recalls.
In the '70s, when that firm broke apart, Alex assumed the responsibilities for creating and growing the new organization's financial planning department-a new concept at the time. Increasingly, she worked with clients; by the 1980s, she had bought the firm and established her own company. Often, Alex would be the only woman in a meeting. "Men didn't seem to know whether they should ignore me or ask me out," she remembers.
Alex joined the International Association of Financial Planners and helped forge the role of financial planning in the industry. Money magazine's 1977 cover story on the careers of the future for woman featured Alex, as did Kiplinger. Along the way, she connected with Louis Rukeyser, appearing on his popular television show Wall Street Week for more than ten years.
Themes
Though their paths to success have been different, these pioneers have some things in common. They worked extremely hard and often harder than men to get ahead. At times they were minimized by colleagues and/or clients because of their gender. But they didn't allow themselves to perceive gender as a hindrance, and decided instead to view it as neither advantage nor disadvantage. They also share the opinion that woman are naturally good listeners and gifted in forming relationships.
Women have come a long way in our industry. And although the numbers of women in the industry are still relatively small, they have only come this far because of the efforts and achievements of women like the ones we read about here ... one story at a time.
What's your story? In Part II of the series, we will explore what can be done to attract more women to our industry.
Joni Youngwirth is the managing principal of practice management at Commonwealth Financial Network, member FINRA/SIPC, a registered investment adviser, in Waltham, Mass. She can be reached at [email protected].