Gender bias is alive and well in the financial advisory industry, and though eliminating it will be a monumental effort, everyone can play a role to ensure that aspiring women advisers thrive.
The Certified Financial Planner Board of Standards' Women's Initiative held a seminar in New York City on Tuesday morning at which new research was discussed that brings to light the hurdles that continue to plague female financial advisers. Though 72% of women with the CFP certification are satisfied with their careers, based on a survey of 262 female CFPs by Fondulas Strategic Research, the qualitative research shows that women face biases and discrimination at the workplace.
The FSR survey shows that only 29% of the 975 women surveyed (including female financial professionals and those aligned with college programs in this space) agree that “the office culture in financial firms makes women financial planners feel welcome and respected.”
Anecdotes of unfair treatment abound in FSR's qualitative study: “I think you do have the 'old boys' network' in place,” one female CFP professional reported. “A male friend told me I had several strikes against me: I was female, a Yankee and not a great golfer.”
Peter Fondulas, president of FSR, noted at the conference that during a focus group of financial industry executives for the study, participants were asked to come up with suggestions that would encourage women to become financial planners. One male financial services executive cracked, “Let's put more hair dryers in the bathroom,” he recalled.
My tweets from the CFP Board's event led to a couple of interesting exchanges, including one with a male adviser who tweeted to a female colleague and me: “Many people still believe in the wage gap myth, too.”
More on the CFP Board's study results from InvestmentNews contributing editor Mary Beth Franklin
In the financial advisory industry, that earnings inequality is far from fabled. A study of 500 financial advisers by the Aite Group showed that female advisers make an average of $32,000 less in annual income, compared with male advisers — even in situations where the woman and the man both have the same experience, revenue production and ownership status.
The list of obstacles women on the professional track face is long and varied. For instance, it's a widely held belief among the financial adviser community that firms are reluctant to hire women as financial planners out of concern they'll leave to start families, according to FSR's data.
If these women do leave, getting back on the career path is no easy feat. Indeed, some of the more forward-thinking financial services and law firms have kicked off workplace re-entry programs to integrate women back into the workforce after they've taken time off.
Changing workplace policies isn't the only way to create an environment that fosters the success of women. Mentoring plays a major role in shaping women's career paths and enabling them to succeed, regardless of the discipline they're in.
Lazetta Braxton, founder of Financial Fountains, a fee-only advisory shop, credits Melissa Hammel of Hammel Financial Advisory Group as inspiring her to open her own practice back in 2008. At the time, Ms. Braxton was with Diversified Trust Co., working primarily with high-net-worth investors. She had a growing interest in working with middle-income clients, though.
“[Ms. Hammel] took me under her wing and gave me advice,” Ms. Braxton said. “She took some risk with me and helped guide me along the way.” In fact, Ms. Hammel introduced her to her first client — a prospect who didn't quite fit Ms. Hammel's firm but was a great match for Ms. Braxton's new practice.
Male advisers can also empower women. Eleanor Blayney, now the CFP Board's consumer advocate, recalls that a key point in her career was when her then-business-partner Greg Sullivan, chief executive of Sullivan Bruyette Speros & Blayney, became president of the International Association of Financial Planners — a predecessor of the Financial Planning Association.
At that point, Ms. Blayney took the initiative and started working with clients. “It took a lot of trust,” she said. “I didn't come into that firm with a book of business. I didn't have a Rolodex. But I had the willingness to learn, and I was well-educated.”
“[Mr. Sullivan] went to bat for me, and I was very lucky in that regard,” Ms. Blayney added.
Indeed, a shortage of mentors and role models to guide women on a career path begets the underrepresentation of women in the financial services arena, Ms. Blayney observed at the CFP seminar.
When fewer women climb the ranks within the industry, it becomes more difficult to create significant top-down change that will foster an environment for female financial advisers to be hired and succeed.
The best thing a successful adviser can do after he or she has “made it” is to show other up-and-coming planners that there's a path to the top.
“It's that process of other women trying to break through and do business differently. I think that's why they reached out to me to help them chart their course,” said Nancy Kistner, managing director and wealth planning solutions market director at U.S. Trust. She is also chairwoman of the CFP Board's board of directors. Ms. Kistner, throughout her career, has mentored women in different phases of their careers as they moved into the financial planning space.
“Why wouldn't I want to help out?” she added.