Attracting women to the financial advisory profession remains a huge challenge, but those who’ve found their calling here are determined to tackle it. They’re leading initiatives that are part of broader efforts to attract, train and retain advisors who bear a strong resemblance to clients.
Chances are great those clients will be female. Women, thanks partly to superior longevity, are expected to control two-thirds of the nation’s wealth by 2030. Nine in 10 women will, at some point in their lifetime, be the sole financial decision-makers for their households. And about 70% of women leave their advisor within a year of being widowed.
Recent research from State Street Global Advisors shows that 55% of women between ages 25 and 34 prefer working with female advisors. It also finds that women using female advisors are more confident in their advisor’s investing skills, and more likely to say their advisor has their best interest in mind and at heart.
But female clients who prefer working with female advisors may have a hard time finding one. The data on gender composition varies widely, but all surveys concur the industry remains dominated by males at a time when professions like medicine and law are almost evenly split between women and men.
According to the latest data from analytics firm Cerulli Associates, women represent just 14% of the total advisor and broker head count although about 28% of rookie advisors are female. The percentage of CFP-certified professionals who are women has stayed flat at 23% for at least a decade. The Bureau of Labor Statistics recently found that 35.5% of personal financial advisors are female.
“It’s going to be tough for the industry to stay on a forward foot if we don’t evolve,” says Brie Williams, head of practice management for State Street Global Advisors.
The fact women may find it difficult to find female advisors doesn’t mean women aren’t succeeding and finding high-profile positions in the business. Many of the best planners are women. At large brokerage firms and other institutions, the number of women CEOs is growing. Lisa Dolly was recently named CEO of Pershing. AIG Advisor Group’s executive chairman is Valerie Brown and its CEO is Erica McGinnis. Amy Webber is president of Cambridge Investment Research.
But there remains a big problem at the point of entry and career choice. Pamela Sandy, the founder and CEO of Cleveland-based RIA firm Confiance LLC and the 2016 president of the Financial Planning Association (FPA), says the profession is definitely becoming more diverse—not just in gender, but in race, age and sexual orientation. “With that said, we still haven’t moved the needle significantly on the number of women willing to enter the profession,” she says.
She hopes to continue to elevate the FPA’s involvement and commitment to diversity and women in the profession. Last year, the FPA launched its Women and Finance Knowledge Circle, an online community for FPA women members to come together to support one another.
Sandy is pleased the profession is starting to reflect a little more diversity among younger advisors. Women represent 32% of FPA NexGen (a community for FPA members age 36 and younger), while they make up only 28% of the FPA as a whole. According to Cerulli Associates, approximately 28% of rookie advisors are female.
The newcomers are noticeably present. “At conferences, young women advisors are visually increasing at a greater rate than I can ever recall in the 15 years I’ve been doing this,” says Nicole Spinelli, director of The WISE Group of Lincoln Financial Network. WISE (Women Inspiring, Supporting, Educating) was launched last year to support the unique needs of female advisors and clients.
Spinelli, like Sandy and others interviewed for this article, stresses the need to mentor and support women advisors. Firms must also do a better job positioning themselves to those who may not even know the industry exists. This includes teaching financial literacy, telling stories about the industry and raising the visibility of current female and minority advisors, Spinelli says.
To envision having this career, “you almost need to see someone who looks and feels a little like you,” says Spinelli. People also need to be told about its advantages. For example, advisors can select a market to serve, be entrepreneurs and impact lives. And she says, “There’s longevity in this industry for advisors to build a life for themselves.”
To help train the next generation of talent, the WISE Group is tweaking Lincoln Financial’s existing apprenticeship model, hosting practice management calls and providing daily coaching messages. It holds events in many cities that unite women advisors from Lincoln and other firms to share best practices, business plans, stories and insights.
Spinelli says she is excited that all Lincoln advisors, not just women, are learning to deepen their relationships with female clients and communicate differently with them. Women are often focused on their children, grandchildren and legacy. “It’s not that men don’t have that,” she says, “but it’s first and foremost with women.”
Eleanor Blayney, the consumer advocate for the Certified Financial Planner Board of Standards and the author of its 2014 white paper “Making More Room for Women in the Financial Planning Profession,” says firms should be a bit creative when recruiting women, minorities and young people who haven’t had a chance to rack up industry successes. Hire them based on what they can do and learn, she says.
“I’m a living example,” says Blayney, who worked for 20 years as an advisor and later consulted to advisors on how to reach women clients. When she first entered the business, she was lucky to have male mentors who saw her potential and believed in her, she says. She also earned her CFP designation right away.
The CFP credential can elevate knowledge, credibility and even career satisfaction. According to a survey from the CFP Board’s Women’s Initiative (WIN), career satisfaction is 72% among women planners with CFP certification, and only 46% among those without it.
The observations of focus groups reveal that female CFP professionals are passionate about their careers and more likely to emphasize the importance of problem-solving and relationships in their work, notes Blayney, whereas those without CFP certification are more likely to describe what they do as a job involving numbers and stress.
The WIN Advisory Panel is working with the new CFP Board Center for Financial Planning (which aims to create a more sustainable supply of new and diverse advisors in the workforce) to help eliminate barriers that can deter women from pursuing CFP certification and a career in financial planning. These barriers include inadequate information, gender bias and discrimination, concerns about work-life balance and a lack of visible role models, networks and professional development programs for women.
“Change can only occur from leadership at the very top,” says Marilyn Mohrman-Gillis, the executive director of the CFP Board Center for Financial Planning, “and CEOs need to embrace the notion that they need to do something proactive.”
Firms can set diversity goals and establish mentorship programs aimed at providing opportunities for women. Firms should also encourage women to earn CFP certification because, she says, “we know that gives women a real pathway for greater success in the business.”
In an effort to build awareness and attract more young talent to the industry—male and female—the CFP Board has programs at 237 colleges and universities. “We also have about 40 programs in the hopper,” says Mohrman-Gillis.