The Business Case

An adviser's gender is not top of mind for most clients. A 2012 study from the Family Wealth Advisors Council, “Women of Wealth: Why Does the Financial Services Industry Still Not Hear Them?” reports that among married and single women respondents, more than 90% did “not have a preference about the gender of their adviser.” That finding changed among divorced and widowed respondents, however, with about 25% of those groups citing a strong adviser-gender preference, most frequently for women.

But other sources believe there is a legitimate business risk from ignoring gender disparity. Most Americans have become more sensitive to situations that lack representative diversity. While clients might be unconcerned about a male-dominated advisory staff, will prospects feel the same way? Staff diversity can help prospects identify with a firm more readily. Several years ago, an adviser told me how he works successfully with clients of different races and his observation applies to gender. People are most comfortable with their own tribe, he says, and having a diverse staff can help foster relationships with a wider range of clients.

The Stumbling Blocks

So what's behind the low participation rate? In April 2014, the CFP Board in Washington, released a study, “Making More Room for Women in the Financial Planning Profession,” as part of its Women's Initiative. Among the findings from the women surveyed:

• Women lack awareness of financial planning as a career path.
• Women harbor misperceptions about financial planning.
• Women's reluctance to take professional risks may be keeping them from entering the financial planning profession.
• Gender discrimination and bias exist within the financial planning profession, likely resulting in women feeling unwelcome and unsupported.

Other organizations are also studying and promoting the role of women in financial services. At the Bryn Mawr, Pa.-based American College State Farm Center for Women and Financial Services, the mission is to advance women in financial services and we do it through research, education and other awareness-building efforts said Director Jocelyn Wright, CFP. Among its research projects, the center is currently completing a study of female advisors' experience in the financial services industry.

Katherine Mauzy, a principal in branch development with Edward Jones in St. Louis notes that about 20% of the firm's financial advisers are women, with recent hires in the 20 to 25% range. In her experience, women do not gravitate to financial advisory careers.

She cites comments from her daughter, a college student: “She said that a lot of the kids who are getting majors in finance, etc., are thinking more along lines of investment banking, asset management. They're not thinking of wealth management. And, so, I think we, as an industry, just have a great opportunity to get more women to understand the role.”

Michelle Lynch, vice president of the Network for Women Advisors with Raymond James in St. Petersburg, Florida, voices a similar opinion.

“I think there's a huge awareness issue particularly as it relates to women about financial services and particularly the advisory role being a viable career option for women,” she said. “If you look across the industry, there's not a whole lot of strong female role models for women to identify with. It's just really not something that a lot of women are exposed to unless they have somebody or know somebody in the business or happen to stumble across it.”

Recruiting Strategies

The industry's shift from transactions to advisory relationships and goals-based planning might make women more comfortable with wealth management, says Lynch, and it also reduces the variability associated with commission compensation. But she cautions that building a sufficient income from asset-based fees is still a daunting challenge for industry newcomers.

Kirstin Turner, senior managing director-complex director with RBC Wealth Management in West Palm Beach, Fla., notes that 15 or 20 years ago a new advisor could succeed by picking up the phone 200 times each day and asking the person to buy a municipal bond. Nowadays the barrier to making client relationships is a lot higher, she believes. Consequently, she recruits women who bring experience or relationships with potential clients.

“For example, bankers make great financial advisers (and) there's a lot of women bankers,” she said. “They actually excel in the banking world which is so ironic that we're such a small percentage of the investment world. CPAs are another great source — that trusted adviser who already knows people that have money and that invest. Sometimes military folks do very well — they've got a great work ethic and they know people — or a retiree from a large corporation that might know a lot of other people.”

College students enrolled in financial planning degree programs are another potential source of female candidates, says Lynch. Her firm recently met with representatives from 13 colleges and universities that offer financial planning programs under the CFP Board curriculum. One goal was to discuss adding a sales focus to the schools' curricula so graduates would be better prepared for business development tasks.

“It's great to be able to put a plan together and to be able to look at the investments and identify that, but when the time comes to sit in front of a client, how do you close the business?” she asks. “How do you get that client feeling comfortable with you?”

Internships can help female college students determine if financial services is the right career choice. Clarissa Hernandez, CFP and MDRT member with North Star Financial in Denver has been working with interns since 2011. The internships provide marketing experience outside the interns' natural market; it's not analytical work and it's not glamorous, she notes.

“You can teach someone how to market, but you just don't know if they're going to do it well or if it's going to be a discouraging thing for them until they actually get a taste of it,” she said. “Can you do the parts of this job that are not that glamorous for the first three to five years? If they stick around through the internship, usually the answer is yes.”

Business Structure and Networking

Sources maintain that business structure plays an important role in helping women succeed, although they have different views on the best structure. Joining an established team makes it easier for new women hires to get started in the business, says Turner. Clients want a team approach to financial advice and women's growing role in managing family finances makes women advisers' inclusion on a team a natural fit. Some women prefer to operate solo, however, says Mauzy, because they can create the desired atmosphere in their own office. That's the Edward Jones approach: Recently hired women start in an experienced adviser's office to learn the ropes but eventually go solo with a full-time sales assistant.

To reduce the risk of isolation among new women advisers in solo offices, each of Edward Jones' 200-plus regions has an adviser serving as a women inclusion specialist.

“The role is to help women get up and running, knowing that women may have a different perspective on things,” Mauzy explains. “Maybe they have a different view on client acquisition, maybe they have more family life balance challenges of children and other responsibilities outside of the practice and how to manage that as you're building a practice.”

Internal networks for women advisers also help new hires succeed and remain in the business. The Raymond James network has been operating for 23 years and provides practice management coaching and networking conferences to more than 940 women at the firm. RBC's Women's Association of Financial Advisors has been around for 27 years and is open to the firm's women advisers with at least two years of production experience.

The group sponsors an annual meeting each fall and the first 150 qualifying advisors who RSVP can attend, regardless of their individual production. WAFA also has a formal mentoring program.

“They will reach out to you and they will offer to partner you up with another female advisor in the firm to make sure that you've got a conduit,” Turner said. “I think we're the only one that has that formal mentoring program.”