Women's rise to senior positions at advisory firms has stalled

Despite having less experience than women, men in the service adviser role, for example, were nearly twice as likely to have been promoted in the past year.
DEC 11, 2015
Women are well-represented in the financial advice industry from an overall staffing perspective — making up about half of total employees at a typical advisory firm — but that picture changes dramatically when we look deeper. In breaking out the roles women hold, it is clear the business remains, especially in firm ownership and client-facing professional roles, a male-dominated field. According to InvestmentNews Research's latest advisory firm benchmarking data, just 19% of people in partner-level positions, or with titles indicating ownership, are women. When it comes to employee advisers — non-owner advisers holding the Lead (Level 1), Service (Level 2) or Support (Level 3) titles — 36% are women. http://www.investmentnews.com/wp-content/uploads/assets/graphics src="/wp-content/uploads2015/12/CI1019461013.JPG" While advisers in more senior roles tend to be male — a trend that hasn't budged since the 2013 InvestmentNews Adviser Compensation and Staffing Study — changes could be ahead. (Don't miss: The 2015 Compensation and Staffing Study) Women saw gains in entry- and intermediate-level positions that traditionally lead to more-senior professional roles. In the 2015 iteration of our study, 49% of entry-level advisers — the support adviser (Level 3) position, often known as a paraplanner, analyst or associate — were female. That was up from 44% in the 2013 study. Women also tend to inhabit one of two other entry-level paths that can lead to client-facing professional roles down the line. Client service administrator, a job function that directly supports adviser interactions with clients, has an 84%/16% female/male split. But research analysts and portfolio managers, roles that also can lead to more-senior advisory positions, are staying stubbornly male; both are staffed at an identical 82% male to 18% female ratio. (Related read: What it takes to retain women advisers) When we examine data on promotions and experience by gender, it is not difficult to find evidence for why — despite the number of women in lower-level advisory roles' rising since our last study — the number of female lead professionals has stagnated. While women and men were almost equally likely to have been promoted in the past year in the support adviser role, when we look one level up at service advisers, men were nearly twice as likely to have been promoted in the past year (21.4% vs. 12.9%). These service advisers meet with clients and deliver the services but are not expected to win new business for the firm — with titles such as wealth adviser, financial adviser or associate adviser. In both cases, women usually had more experience than their male counterparts, indicating they're more likely to remain in the same role longer. http://www.investmentnews.com/wp-content/uploads/assets/graphics src="/wp-content/uploads2015/12/CI1019471013.JPG" A big part of that stagnancy could be business development, or winning new business in general. The sales culture and sales mentality is what leads to the upper echelons of compensation and status at firms, and it could be that women aren't successfully breaking into those roles. What we can say from evidence in the study is that new adviser positions that carve out these responsibilities, such as business development officer or business development specialist, are overwhelmingly male (96% for partners and 72% for employees), which underscores the fact that these responsibilities or opportunities aren't necessarily being embraced by or allocated to women. (Staffing insights: The highest paying jobs at advisory firms) Another post where women play a smaller role is in firm ownership or as primary relationship managers. We did not see much evidence of expansion in these categories in the study results. Encouraging, however, is the increasing number of young, professional-track female advisers joining the business. Enormous advantages are inherent for advisers who serve their own representative demographic. With women increasingly serving as the primary breadwinners and financial decision makers in their households, those firms who turn an eye to gender diversity when actively recruiting and developing talent are setting themselves up for advantages they'll carry well into the future.

Latest News

Judge OKs more than $90 million in settlement money for GWG investors
Judge OKs more than $90 million in settlement money for GWG investors

Mayer Brown, GWG's law firm, agreed to pay $30 million to resolve conflict of interest claims.

Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs
Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs

Orion adds new model portfolios and SMAs under expanded JPMorgan tie-up, while eMoney boosts its planning software capabilities.

Retirement uncertainty cuts across generations: Transamerica
Retirement uncertainty cuts across generations: Transamerica

National survey of workers exposes widespread retirement planning challenges for Gen Z, Millennials, Gen X, and Boomers.

Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future
Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future

While the choice for advisors to "die at their desks" might been wise once upon a time, higher acquisition multiples and innovations in deal structures have created more immediate M&A opportunities.

Raymond James continues recruitment run with UBS, Morgan Stanley teams
Raymond James continues recruitment run with UBS, Morgan Stanley teams

A father-son pair has joined the firm's independent arm in Utah, while a quartet of planning advisors strengthen its employee channel in Louisiana.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave