Women have made enormous strides in the economic life of the U.S., but they have not yet made equivalent strides in the financial advice industry. Leaders of the industry must ask themselves why
this is so.
As reported in InvestmentNews' recent series on women in the advice industry, only 7.9% of advisers who work directly with clients are women.
That statistic is in stark contrast to these others:
• 57.5% of all students earning bachelor's degrees are women.
• Almost 60% of those gaining master's degrees and 48.9% of those gaining doctorates are women.
• Women control almost 60% of the wealth in the U.S., and, according to estimates, women will inherit 70% of the $41 trillion — or $28 trillion — in intergenerational wealth expected to be transferred over the next 40 years.
• More than 2.8 million women earn $100,000 or more annually. More than 10 million businesses in the U.S. are owned by women. And women 50 and older have a combined net worth of $19 trillion.
WHAT'S THE CAUSE?
Let's get back to the advice industry. Is there something about the industry that discourages women from entering it? Is there something about it that keeps women from succeeding in it and remaining in it? Is it still too much of an old-boy industry? What can be done to make the industry more appealing and more welcoming to women?
Women have advanced in many fields that were once dominated by men. Women now make up about 48% of medical school graduates and 49% of law school graduates, and earn about 44% of MBAs, so they have many more career choices.
The financial advice industry must first find out what young women want in a career, and what they value most. Then it must find ways to adapt to those desires and market itself as a viable career choice for women.
According to a 2012 study by Pershing LLC, 70% of female clients would like to work with a female adviser, but only about 20% do. That suggests that financial planning and advisory firms that can meet that need will gain market share.
According to the InvestmentNews series, a number of firms are taking steps to increase opportunities for women and to improve their comfort level within their firms and the industry. For example, Raymond James & Associates Inc. funds a network for female advisers that provides professional and peer coaching for such advisers who seek to build their practices. About 14% of Raymond James' 5,400 advisers are women.
United Capital Financial Advisers LLC has been actively trying to recruit female advisers, and in the past year, the percentage of advisers facing clients has risen to 30% female, from 23%.
Also, the Certified Financial Planner Board of Standards Inc. is putting together a panel of nine women to research what issues are keeping the number of women in the industry below acceptable levels. The board hopes to develop a plan to bring more women into the financial planning field.
Young women, and women seeking to change careers, must be shown they can have satisfying and financially rewarding careers in providing financial and investment advice — careers in which they will help other women (and men) achieve their financial goals.
PLAYING YOUR PART
Executives at firms of all sizes in the financial planning and investment advice fields must play their part in increasing the number of female advisers. That will help their firms, the industry and their clients.
At a time when women serve in cabinet positions in the federal government, and when a woman may well be the next chairman of the nation's most powerful financial institution, the current level of women advising clients in the financial advice industry is unacceptable.
It is time to move forward.