By The Numbers
Perhaps the most unmistakable trend to this growing opportunity is the tangible increase in the number of female advisors in the industry. The numbers don’t lie.
According to the Certified Financial Planner Board of Standards Inc. (CFB Board), the number of female financial advisors increased to an all-time high of 20,633 as of December 31, 2020. That is a year-on-year growth of 3.1%. It also means 23.3% of all CFP professionals—financial planners—are currently women.
While the one-in-five ratio seems uninspiring, this is significant progress considering where we were a few years back. In 2014, Cerulli Associates reported 11.5% of financial advisors were women. And this was already 7.9% up from 2012.
The Challenges Women Face Now
A few important workplace issues stay close to the gender inequality issue. These are equitable pay, sexual harassment and the perception of a lack of commitment. They also face the apparent gender bias that’s hidden in plain sight.
Gender Bias
Research from Ariel University in Israel discovered a gap between what people say about female financial advisors and how they act. In their paper “Uncovering Gender Bias in Attitudes Towards Financial Advisors,” they found that, on a subconscious level, respondents still have a strong preference for male over female advisors.
More specifically, the respondents say gender does not influence the quality of the investment advice offered, even though their subconscious answers prove otherwise. Female financial advisors still feel this hidden level of gender bias and discrimination, and it may keep them out of the industry altogether.
Fortunately, the same study also shows how respondents investing through firms and investment houses perceive female financial advisors more equally than otherwise. This, once again, manifests opportunity for our women peers.
Equitable Pay
Labor Department data show that women are still paid less than men, all things the same. So for the same industries, skill sets or even work hazards, talented women get paid less. The “gender tax,” according to an industry study by the Aite Group, paid by women financial advisors in the form of lower earnings was estimated to be $32,000 per year. That is adjusting for the advisor’s years of experience, size of practice and practice ownership of the advisor.
But while this is a challenge, women are also taking on the lack of equitable pay as an opportunity to break into the financial services industry. With competition tightening the margins afforded to financial institutions, the economical prospects of hiring a female virtual financial advisor are enticing. This is an excellent chance for many underpaid women to earn more than the comparatively lower-paying jobs in other industries.
The Me Too Movement
When it comes to harassment against women in the workplace, it’s clear that we can do a lot more work. But movements like Me Too are increasing awareness, and it should be a matter of time when we’ll see true equity and safety between genders.