NAPFA's new women's roundtable plans to learn why more women aren't choosing the advisory profession.

qNumbers don't lie. And the numbers coming out of the National Association of Personal Financial Advisors show that when it comes to the ratio of women to men investment advisors, the enlightened fee-based group isn't doing any better recruiting women than the wirehouses and Wall Street firms many of its members have fled.   
In fact, wirehouses seem to have NAPFA beat if only slightly, according to a survey from the Securities Industry Association, which found that women constitute about 30% of the brokerage industry, while women make up only 25% of NAPFA's advisory membership. The Securities and Exchange Commission does not track the ratio of female to male advisors, SEC spokesman John Heine says. The same is true at the National Association of Securities Dealers, according to a spokesman there.
But figuring out why women aren't entering fee-only planning and then knocking down any roadblocks would-be advisors encounter will become a primary mission for outgoing NAPFA chairman Peggy Cabaniss as she leaves behind the reigns of the fee-only association in September and picks up those of the new women's roundtable she's recently created under NAPFA's auspices. The first meeting of 20 invited NAPFA members-all women-took place at the group's national conference in Dallas this past May.
"We're trying to figure out why more women don't get into planning," says Cabaniss. "Is it the science and math thing, or the fact that when women think of our profession they only think about stock brokerage and commissions (that, of course, may be why the brokerage industry has higher numbers than NAPFA)? Our first issue is to provide a really supportive environment to turn this around."
The next question the roundtable is tackling is what are the things that get in the way of women developing real businesses that will grow into larger, more profitable firms? "We know there are outside pressures on many women. From raising kids to taking care of parents, women are always multitasking. That's not new. But we'd like to figure out ways to help women become more efficient," says Cabaniss, 61, who is building a fairly large firm in her own right. Since buying out a partner eight years ago, she's built her Lafayette, Calif., firm, HC Financial Advisors, to $160 million in assets and $1.2 million in annual gross revenues. "My business is revenue-cognizant. It's run like a business. We expect to grow 10% to 20% a year and take on another 15 to 20 clients annually. We have the procedures and plans in place to do that," the veteran planner says.
Not all advisory shops can make that claim. In fact, a new NAPFA-commissioned study of its membership by Moss Adams found that while the average NAPFA member earns $200,000 in annual pretax earnings, many solo firms owners are limping along at $20,000 to $30,000.
"There is nothing wrong with working out of your home, but working out of your home and netting $20,000 is not what we're holding out as a successful business model," says Cabaniss, echoing Mark Hurley and others who studied the advisory business. "While some solo firms are very successful, the majority are what would tactfully be considered marginal firms."
That's one reason Cabaniss is hopeful that the Moss Adams study, which shows precise revenue, cost and benchmarking information for a spectrum of firms, will help all NAPFA members, but particularly women business owners and advisors, figure out what they're doing right and can do better to become more effective. "One of the reasons we did this study was to show that fee-only planning does not have to be a vow of poverty," Cabaniss says. It's also, she adds, why she spearheaded the large-firm initiative this year at NAPFA, which is tapping the largest firms to create an efficient, effective blueprint for growth. "The studies show us that sometimes we only need to do a little tinkering and we'll get there."
Karen Altfest, who runs New York-based L.J. Altfest & Company Inc. with her husband, Lew, says her first reaction to attending the roundtable, was "Ah-ha, why didn't I think about this before? Of course, like-minded women can help each other."
She says already the group is inspiring women advisors to share their experiences regarding managing their firms and practice management issues. "This is a group of serious-minded people that can call on each other with questions," says Altfest, who believes the NAPFA roundtable could be particularly good for future generations of female advisors.
Altfest already works diligently to reach out to women, albeit investors, creating a women's division at the firm and offering insightful workshops on topics like women, money and stress, charitable giving and how to read the New York Times business section. She also writes a quarterly newsletter for women investors called The Financially Savvy Woman.
A vice president at L.J. Altfest, which she has helped grow to $400 million in assets and 320 clients over the past 20 years, Altfest says the firm continually sets the stage for growth, recently raising client minimums to $2 million in investable wealth and hiring an efficiency expert. As for recruiting women, so far the firm is far above average, at least in terms of industry standards: Fully 50% of the staff at the company is female. "I really want to make investing easy and understandable for women, and this naturally translates into wanting to bring women along in this profession," she says. "I think the roundtable will help all of us with this."
Diahann W. Lassus, a founding partner of Lassus Wherley & Associates in New Providence, N.J., and another attendee at the NAPFA roundtable for women, says she hopes the group can provide both mentoring for young women entering the business as well as next-level training for existing planners. "I think in the planning community, because we haven't been so successful in bringing women in, we haven't had the kind of mentoring programs so critical to success."
As past president of the National Association of Women Business Owners and a decades-long member, Lassus credits much of her success to the mentors she met in that group. Today, with her partner, she manages $275 million for 200 clients and is in the process of hiring two new planners. "We're really poised to go to the next level of growth with new staff, technology and rebalancing software," she says. In five years, Lassus hopes that translates into $600 million under management. In the meantime, she speaks proudly of the fact that she has a predominantly female staff. "Anything we can do to attract young women to this profession and support them is extremely positive."
Cabaniss is hoping that building a core group of strong business leaders who are spearheading significant growth in their firms will inspire the NAPFA membership and maybe even the advisory industry overall. Add to the women's roundtable Iris Mack Dayoub, an Ironman participant at age 69 who has built her firm, Alpha Financial Management in Savannah, Ga., to $40 million and has her sights set on 20% annual growth. "I was ecstatic when I heard about the roundtable," Dayoub says. "The firms that are growing fastest are predominantly male, and I think it's critical for us to figure out why that's happening. Why aren't there more women owners and why aren't they growing more quickly?" asks Dayoub, president of Alpha Financial.
That question is pertinent in light of the fact that the Center for Women's Business Research in Washington, D.C., finds that the growth rate at the more than 10 million firms that have women ownership is nearly twice what it is at other firms. Translating that kind of success to the advisory world will be a chief goal of the roundtable, Cabaniss says.
So will showing women how to work smarter, not harder. And that's something that roundtable attendee Laura Barnett Lion, president of Barnett Financial in Austin, Texas, can do. The 37-year-old mother of a 2-year-old boy and a 7-month-old girl manages $40 million for just 30 clients. And she does it with no onsite staff, just two virtual professionals and her technology-a virtual administrative assistant, virtual financial planner and her portfolio management system.
"I think the roundtable was a great idea and long overdue. I think we had women there representative of all types and sizes of firms. It will be a supportive network for all of us," Lion says.
To keep the ball rolling, Cabaniss plans to add sessions for women advisors to each of NAPFA's four regional conferences and anticipates reaching out to high schools and colleges to begin to educate women on the fee-based advisory profession. A Web-based discussion forum for women and mentoring programs are also on the drawing board. "People are getting excited and asking, 'What's next?'" Cabaniss says.