Female advisers are paid less than their male counterparts, according to a report from the Certified Financial Planner Board of Standards Inc., “Making Room for Women in the Financial Planning Profession,” which was released on April 22. The report states that women with the same experience, revenue production and ownership status receive approximately $32,000 less in annual income than male advisers. This is an alarming statistic. What has to change to close this pay gap?
Real change happens on both a macro and micro level. It is true that the financial advisory field has a responsibility to provide equal opportunities for both men and women. In the meantime, what can you do to part of that change? Here are five ways you can take action today:
1) Understand your value
Recognizing the value you provide to your clients and/or your firm is an important first step toward earning what you are worth. Many women are afraid to communicate their strengths and successes. This fear of bragging leads many female advisers to be overlooked for promotions and new opportunities. In a male-dominated industry, you have to speak up and clearly state how you make your clients lives better and the company more profitable. If you don't, then don't expect to be competitively compensated.
2) Examine your money mindset
How you think and feel about money — your money mindset — affects your ability to accumulate wealth. The tricky part about money mindsets is they often reside in your unconscious mind and influence your income potential without your knowing it. The best way to bring these into conscious thought is to notice your self-talk each and every time you interact with money. Write these thoughts down and notice any patterns that emerge. If you have ambivalent feelings about making six figures, were told growing up that wealthy people were not as good as poor people, or just feel uneasy talking about money, then it's time to shift your money mindset to embrace abundance. This is not easy, but with time and the help of a good mentor or coach you can stop sabotaging your earnings potential and do your part to close the pay gap.
3) Learn to negotiate
Negotiation is a skill and it can be learned. Take a moment and think about all the things you negotiated in your life just this morning: Who will pick up the kids, who is buying milk and how to get your workout in on such a busy day. Now think about how you can use these same skills to negotiate your revenue share, ownership status or compensation going forward. Imagine if each and every female adviser mastered the art of salary negotiation. Something tells me that the pay gap would disappear.
4) Find a male mentor
Men are encouraged from an early age to be independent and become good providers for their families. Women are taught to be relationship-oriented and to put others' needs first, which is not very useful when asking for a raise. While these gender roles are changing as more women become the primary breadwinners and more men stay home with the children, it remains part of the fabric of our culture. Enlist at least one male mentor to help you fine-tune your negotiation skills and give you a male perspective when negotiating your compensation. You can still have female mentors and role models too. It is just helpful to see it from the other side.
5) Don't be afraid to ask
As a businesswoman and entrepreneur, I know first hand how difficult it is to ask for your fee or negotiate for more money. I also know how great it feels when you learn to ask for your value, even if there is a high risk of rejection. While hearing “no” never feels good, it is a much richer experience than never asking and wondering if you left money on the table. The best part is that the more you embrace asking, the more you receive.
Kathleen Burns Kingsbury is a wealth psychology expert, founder of KBK Wealth Connection, and the author of several books including How to Give Financial Advice to Couples.
