Krawcheck to advisers: 'Middle-aged white guys' must help women get raises

The disparity in pay between men and women is a key source of the retirement-savings gap, and an issue that financial advisers should help their clients overcome, former Merrill Lynch boss Sallie L. Krawcheck said Thursday. In a speech at the Morningstar Inc. Investment Conference in Chicago, the former brokerage executive told advisers — many of them “middle-aged white guys,” she noted d— to coach their women clients on how to seek raises, scale the corporate ladder and learn from the experiences of other women. “A woman's biggest asset, most often, is herself — herself and her net present value of her future earnings,” Ms. Krawcheck said. “If we actually consider ourselves to be her financial adviser, if she goes from 77 or 78 cents to a dollar, pay parity, that's a 30% return on her biggest asset that she gets year after year after year." Ms. Krawcheck, founder of Ellevate Asset Management and chairwoman of Ellevate Network, a professional organization for women, said reducing the pay gap would go a long way toward solving what she said is a $14 trillion savings gap for retirees in the United States. She described that problem as one that's “so big and so scary and so hairy that we've actually stopped talking about it and debating it,” a comment that echoes one made by BlackRock Inc. chief executive Laurence D. Fink earlier this month. “The retirement crisis in this country is a women's crisis,” because of the dramatically higher number of women whose savings fall short of their needs, Ms. Krawcheck said. That's a huge opportunity for advisers, she said, noting that the market for new clients is small and competitive. What's more, most wealthy, older men already have financial advisers, and most are happy with their services. Most of those clients trust their financial adviser more than their physician, she said, citing studies conducted at brokerages when she was an industry executive. Ms. Krawcheck ran Bank of America Merrill Lynch's wealth management operations until 2011. Women are less happy, and they correctly perceive that their advisers are more attentive to the needs of their male clients, she said. Improving that relationship, she said, "is one of the very few in life win-wins that are out there."