As we all know, the presidential election of 2016 was the first time a female appeared on the ballot as a major-party candidate. After a particularly hard-fought campaign, Hillary Clinton said in her concession speech, “I know we still haven't shattered that highest and hardest glass ceiling, but someday, someone will, and hopefully sooner than we might think right now.” Whether you supported Ms. Clinton or not, and whether or not you believe being a woman played a role in her loss, the election brought questions of gender to the fore.
In our industry, women remain a distinct minority. “Despite impressive growth in the number of CFP professionals in recent years, the percentage who are women has remained flat, at about 23%,” according to the Certified Financial Planner Board of Standards Inc.
On many occasions, I have been party to female advisers' discussions about what it's like to be a woman in a profession dominated by men. There is, of course, a wide range of opinions on the significance of gender, and not every woman perceives the issue the same way. Some feel it is a benefit to be a female adviser, while others see it as a disadvantage. Some female advisers believe the industry should take a stand to support women in the field; others believe things are improving gradually without overt action. Some chalk up certain business challenges to gender bias while others believe the business challenges they face are gender-neutral.
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On the whole, though, there seems to be a widespread perception that the industry is simply unwelcoming to women.
I've never gotten too worked up about gender issues, perhaps because my first job was as a lieutenant in the Air Force. In that environment, I became immune to slights.
Attitudes and perceptions are hard to quantify, but one issue that can't be ignored is money. Women still earn 79, 80 or 81 cents to the man's dollar (depending on which government department's data you look at). Well into the 21st century, this inequity is hard to believe.
At first glance, our industry might seem immune to this problem. After all, financial advisers tend to be paid based on performance, which, in theory, levels the playing field. But there are some alarming facts.
According to the CFP Board's Women's Initiative, the industry's business models and compensation methods may be unattractive or unworkable for women. Many planning firms compensate advisers according to production-based formulas rather than with a salary, which can be off-putting for female advisers just joining the industry. This aversion to variable compensation could reflect women's reluctance to take risks and their need for stability; male advisers seem to think so, as they deemed risk aversion as one of the top five reasons there are fewer women in the industry.
Still, more female than male advisers are salaried. In 2012, 20% of female advisers were salaried compared with 12% of male advisers. Despite this, the data show that “even when she has the same experience, revenue production and ownership status as a man, a woman in the financial advisory field receives approximately $32,000 less annual income than male advisers.”
During the presidential campaign, I spoke with a number of female advisers seeking advice about the need to be paid fairly, the desire not to hear “locker-room talk” in the office and other gender-related issues. Although we may choose to believe that these situations do not exist in our industry, they do.
In the wake of 2016's uniquely fraught election, we would all do well to take this opportunity to assess our offices for gender neutrality and a culture that is conducive to supporting every team member's growth and development.
Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network.