Despite what F. Scott Fitzgerald said, there are second acts in American lives, especially when it comes to women becoming independent financial advisers.
We know that women are woefully underrepresented in the ranks of financial advisers. They make up more than half of the U.S. population, but represent only 15% to 20% of all advisers, according to Barron’s.
Yet, women are expected to control nearly 200% more of U.S. wealth by the end of the decade, reaching approximately $30 trillion of investible assets as the great wealth transfer continues, according to McKinsey & Co. Many of these newly affluent women will prefer to work with other women to manage their financial futures.
And all of this is happening even as aging financial advisers are leaving the business far faster than they're being replaced.
Isn’t it time we recognized the urgency of this latest industry inflection point?
Courtesy of the Great Resignation, there's a fast-expanding pool of women seeking second careers who come from the education, nursing and social services sectors, among others.
While it’s understandable why employees from these backgrounds would experience job burnout given the events of the past two-plus years, they are professions that create highly transferable skills perfectly suited for wealth management, which is much more consultative, planning-based and relationship-driven than ever.
Women looking to switch careers after spending time in these other sectors are more likely to thrive in today’s wealth management landscape, where conversations need to be more about empathy, accessibility and relatability.
As women clients continue to capture a larger share of wealth, they will want to work with a professional who makes it easier to open up about the highly personal subjects of money, family needs and life goals.
There are a few key areas on which wealth management firms need to focus to seamlessly bring aboard and retain women career changers as financial advisers and help them grow professionally.
First, we need to attract women by showcasing the value that this industry and this career offer. A career as a financial adviser provides the opportunity to build a business that truly helps people and offers flexibility, big earnings potential and career-life balance. To bring more women into this industry, we have to share the story of what it means to be a financial adviser and highlight the benefits this career can bring.
And while training programs matter, women tend to find more value in building professional relationships through mentorship than in traditional training programs, according to our surveys. Firms may want to consider paid training programs to help new entrants gain their Finra securities licenses, combined with ongoing mentorship programs tailored to each new adviser’s unique needs.
Third, soft skills give these women a path to use the skills they’ve honed over the years to build a successful business and lean on their skill set to change the industry.
One of the most recent stories I’ve heard was of a financial adviser who started her professional life as a social worker before channeling her compassion for others into her work as a financial planner.
The pandemic was a catalyst for her to leave her job and pivot to a new career that allowed her to help people and build a successful business with the flexibility she needed to balance family demands. She leveraged her natural intuition, people skills and organizational abilities to build a $2 billion business over the past 30 years.
There is no substitute for real-world experience in caring for the needs and guidance of others.
And with so many women who have experience as teachers, nurses and social services workers now actively exploring a new career path, independent wealth management firms have an opportunity to fundamentally reshape the future of our industry.
Kristen Kimmell is executive vice president of business development at Advisor Group, the leading network of independent wealth management firms.
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