Demand for female advisers eventually will come from female clients

At the dawn of the millennium, The Economist proclaimed it was time to “forget China, India and the internet. The future of the world economy lies increasingly in female hands.”
This was heady stuff, especially for me as a female CFP professional in an industry where there were few women with their hands on the wheel. The lack of female financial planners never made sense to me. I had found planning to be such a great career. It enabled me to combine my communications skills (I was an English major) with my interest in markets (I minored in economics) to pursue a well-paid profession that had socially redeeming value in terms of helping individuals and families achieve their life goals. Surely as women’s wealth and authority increased on the macroeconomic level, the microeconomics of my industry would follow suit. As more women discovered financial planning, more financial planning firms would discover women. A strong business case for the female CFP professional would emerge.
And yet today, over a decade later, the demand for more women in financial planning is not yet in evidence, judging by the numbers. We’ve stalled at 23% female representation in the CFP profession. Whatever growth has occured in the number of women has taken place mostly at entry levels, rather than in senior positions.
An argument can be made that the problem is one of supply. Research by the CFP Board in 2014 for its Women’s Initiative demonstrated that women are less aware than men of financial planning careers. Furthermore, what they think they know about the profession tends to be unappealing and erroneous, e.g., “It’s all sales and numbers.”
But the demand side is an issue as well. The CFP Board’s research documented a fair level of gender bias in the industry, with employers and managers less likely to hire women, assuming they will cut and run when they have families, or believing that females make for less-successful professionals, even while acknowledging women are as qualified as men.

(Related read: Why aren’t there more women fund managers?)

So what is the business case that could change the industry’s mind about the value of female financial professionals?

DIVERSITY AND PROFITS

One argument comes from large global corporations. Over the past 15 years, these publicly held firms have increasingly been held accountable by shareholders, governments and research organizations such as Catalyst, McKinsey and Reuters to increase their number of female board directors and top managers. This gender diversity, first seen as the socially responsible, ethically right thing to do, was then discovered to be profitable as well. The addition of women at the top also added to the bottom line: higher returns on equity, higher returns on sales, higher returns on investment.

As women’s wealth increases, so should their representation in financial advice.— Eleanor Blayney,  CFP Board consumer advocate and special adviser on diversity for the CFP Board Center for Financial Planning

Whether the example set by publicly held firms is particularly compelling to the predominantly small, private, one-or-two-shareholder firms of the financial planning industry is not clear. These firms may be a lot more focussed on challenges dealing with compliance and succession issues than in making sure their next hire for a senior planner is a woman. But what would be sufficiently convincing to change managerial minds would be evidence that female consumers preferred female advisers. For quite some time now virtually all financial advisory firms — big, little, brokerage, advisory, wirehouse, independent — have been pinning revenue growth on attracting more female clients, given women’s emerging status as major holders of earned and inherited wealth and their domination of household financial decisions. But if firms were convinced it takes female professionals to get these female clients, then my days of being a professional minority would be over.
There’s a hitch, however. While there is evidence that some segments of the women’s market, such as divorcees and widows, tilt toward female professionals, as a whole, prospective female clients are less influenced by the gender of their CFP professional than by attributes of competence and trustworthiness.

(Related read: 3 things financial advisers need to know when serving female clients)

That said, here’s what I find myself wondering: Is it possible that female clients are not asking for female professionals because the choice doesn’t exist much, given our very low numbers? I remember a time in my own life when my girlfriends and I all had male gynecologists because all gynecologists were men. But today we all have female physicians. When the market created a choice, we ran for it. I know I am more confident taking my feminine issues to someone who understands from the inside what it is like to have cramps or hot flashes.
Money, too, is a highly intimate subject for women; and their financial psychology differs from men’s. Longer lives, lower pay, greater readiness to care for children and the elderly, different ways of thinking about risk and return are all issues that need handling from the inside out — from the perspective of a female professional who has been there and faced that.

SKEPTICISM OF INDUSTRY

I strongly believe many women may not have considered the benefits of working with a female professional because they are skeptical about the benefit of working with a professional at all. Women’s antipathy toward the financial services industry has been well-documented in studies by Boston Consulting Group and the Center for Talent Innovation, for example. So perhaps the reason women care about competence and trustworthiness over gender in their financial advisers is because they’re not convinced these qualities are staples of the profession.
For the past few years, I have been a speaker at the InvestmentNews Women Adviser Summits, which bring together female professionals interested in sharing with peers what it means to be a successful woman in the advisory and financial planning profession. The energy, creativity and professional dedication of the participants — most of whom are targeting female clients — is unlike anything I have experienced at professional conferences before. It’s time now to open up a public window into what is happening at these events to show the female public what female professionals have to offer.

(Related read: 2015 InvestmentNews Women to Watch)

My money is on women’s demand for female CFP professionals soaring as a result, and the further possibility that this time our male-dominated profession will really pay attention.

Eleanor Blayney is the CFP Board consumer advocate and special adviser on diversity for the CFP Board Center for Financial Planning.

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