I can think of very few industries that are as male-dominated as the financial services industry. In fact, according to a 2012 Cerulli Associates Inc. report, only 7.9% of financial advisers were women, whereas according to a 2012 U.S. Census, 50.7% of the population was female. This small percentage of female advisers becomes more of a mystery to me the longer I work in this field, and the more I meet and work with high-caliber female advisers.
Why are there so few? After all, we are relationship geniuses, multitaskers, sensitive, trusting, empathetic, patient and good listeners. The traits that make many of us good mothers also make us great financial advisers. Yet women are reluctant to enter the financial services field, with its male-dominated culture, complete with the notion that women cannot excel. In my experience, there are other specific reasons why the industry has not attracted more women:
• Competing priorities — As moms, wives and “domestic engineers,” women believe that the field requires more commitment than many can muster.
• Too numbers-driven — Women tend to think they have to be analysts or portfolio managers to be successful, but success is usually more about being relationship masters.
• No entry-level opportunities — The best advisers are more mature, with good Rolodexes and sophisticated business acumen. It's a great second-career choice, but that timing can be challenging for many women.
• The reputation — The financial advisory industry has suffered black eyes in the past, and many women have been turned off by it.
Thankfully, there are women who have refused to buy into the idea that they cannot succeed in this industry. Many of these women, such as Ami Forte at Morgan Stanley, Elaine Meyers at Credit Suisse Group AG, and Maureen Raihle at Bank of America Merrill Lynch, are included on such prestigious lists as the annual Barron's Top 100 Financial Advisors.
These women, and many others like them, have risen meteorically over the past few years, and each manages a book of client assets well in excess of $1 billion. They serve as shining examples of what's possible in this bastion of male advisers. What I find most compelling, though, is that while the overall numbers in the ranks are small, the impact they are having on the industry is very significant.
LEARN FROM LEADERS
Today, wirehouse firms are no longer the only places for high-quality female advisers to stake their ground. With a vastly expanded landscape, women can choose the firm type and model that would best suit their personal and professional goals. The independent space, with its multitude of ways to affiliate and access support, offers women unique opportunities for leadership and growth.
Let's look at the following powerhouses as examples:
Alexandra Lebenthal is president and chief executive of Lebenthal & Co. LLC (founded by her grandparents in 1925) and its multifamily office, Alexandra & James Co. LLC, whose clients have investible assets of $2 million to $20 million. Ms. Lebenthal is among the most recognizable female names on Wall Street, as well as a frequent commentator on television and other media.
Lori Van Dusen is CEO of LVW Advisors, which she founded in 2011 after spending the bulk of her career in the wirehouse world. Ms. Van Dusen now manages $2 billion in funds for 25 high-net-worth families (ranging in size from $10 million to $500 million) and 20 institutions in education, research and health care. In 2011, she was ranked No. 3 on the Barron's list of Top 100 Women Financial Advisors and 83rd on its list of Top 100 Financial Advisors, female and male.
Michelle Smith is CEO of Source Financial Advisors LLC, a $363 million specialty boutique wealth management firm she launched late last year that serves clients dealing with major financial events in life such as divorce, sale of a business, liquidity events or concentrated stock decisions. In business for more than 30 years, Ms. Smith broke free of the wirehouse world (where she was partnered with her mother, Corrine) six years ago with a bold vision for her own firm. Today she leads a firm of seven, including her mother, and has ambitious plans for growth in the coming years.
Rajini Kodilalam is co-founder of Focus Financial Partners, the largest independent fiduciary-wealth-management partnership in the United States, with 800 partners and employees managing $60 billion in client assets. In her role at Focus, Ms. Kodilalam identifies high-quality registered investment advisers and broker teams to join the partnership, and leads the practice management effort across the partnership to turbocharge business development, margin efficiencies and organizational structure, as well as succession-planning opportunities.
Sallie Krawcheck is perhaps the only woman to have truly broken the glass ceiling of Wall Street's big firms, as the former president of the Global Wealth & Investment Management division of Bank of America. Her storied career is a model for what women can achieve in this industry.
The industry has been primed by many fearless and brilliant women, and there is a vast landscape of opportunities yet to be tapped by those who may be looking at financial services as a career either for the first time or with new eyes. I can think of several compelling reasons why women would want to enter this field:
• It can be exceedingly lucrative.
• There are many opportunities for personal and professional rewards.
• There's flexibility; a balance can be struck to accommodate work and family life.
• It's a good fit for our relationship-driven personalities.
• There are more opportunities today in both the wirehouse and independent worlds.
Women have all the ingredients to be successful financial advisers, and there is no doubt that the industry itself could use an infusion of their DNA. With this in mind, most of the traditional Wall Street firms are ramping up their marketing efforts toward women, recognizing that they control trillions in consumer spending and are a largely untapped resource for growth. It's also no secret that women enjoy working with women, so it follows that all firms will continue their efforts to recruit more female advisers and that opportunities for women to enter the industry also will increase in number and quality.
One of my favorite quotes and guiding principles comes from Nelson Mandela, who said, in part, “Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us. We ask ourselves, "Who am I to be brilliant, gorgeous, talented, fabulous?' Actually, who are you not to be?”
I agree wholeheartedly.
Mindy Diamond is president and chief executive of Diamond Consultants LLC.