One-third of female advisors may quit in next 12 months, feeling unsupported

Carson Group report reveals how culture changes are required to move the needle on gender diversity.

The wealth management industry’s efforts to attract and retain female professionals aren’t working fast enough for many women, who feel unsupported.

With CFP Board stats showing that the percentage of women CFP professionals has only increased by 0.2% to 23% over the last decade, Carson Group’s State of Women in Wealth Management considers what can be done to attract, retain and support female advisors.

The firm asked 276 financial advice professionals about the impact of female advisors on client relationships and how underrepresentation can be addressed.

Perception is perhaps the first place to start, as the survey found that men and women agree (59%) that there has been an increase in the representation of female financial advisors during their careers. But while 92% of women respondents said that underrepresentation is a problem, just 68% of men said this.

Recently, Karen Altfest, executive vice president at Altfest Personal Wealth Management, shared with InvestmentNews her insights into the industry’s gender diversity challenge and the business case for a greater share of female advisors.

The Carson report confirms the opportunity that a more gender-balanced industry would bring, given the estimated $30 trillion in financial assets that women are set to control as a result of wealth transfers through 2030.

It found that many women executives prefer to work with a female advisor, and this enables a deeper connection and stronger client relationships.

MOVING THE NEEDLE

How can the industry accelerate the share of women working in wealth management?

The report highlights several ways to move the needle, starting with making the industry more attractive to young people who are still figuring out what they want to do. It found that only 39% of respondents came into the financial services industry intentionally.

Helping high school and college students to understand and be enthused about a career in financial services is key to creating a “first choice” position for the industry.

But filling the pipeline of potential talent won’t not be enough to change the experience of those already working in the industry. While 93% of poll participants say they find their career rewarding, this is skewed by the male cohort (68%) while only four in ten women agreed.

Almost one-third of female respondents have looked for a new role in the last 12 months, showing a potential retention problem for firms keen on keeping female advisors satisfied in their roles.

InvestmentNews recently held its 2023 Women to Watch event in New York City to celebrate the crème de la crème of women advisors.

MENTORS AND SPONSORS

The role of colleagues, and leaders in particular, is vital to ensuring that advisors, whatever their gender, feel fulfilled, supported, and satisfied in their wealth management career.

Although 66% of respondents said that mentor relationships critical to their success — citing guidance, and direction and expertise sharing (21%) as key support elements — women are often over-mentored and under-sponsored.

The value of advice given in a mentoring capacity will only take women so far unless sponsors also advocate for them and help open doors to career progression, especially toward leadership roles.

Despite nearly all respondents highlighting the impact of firm culture on their satisfaction at work, just 36% of respondents “strongly agree” with the statement: “I feel supported by leadership at my firm” — roughly the same between men and women.

The report shows that a greater number of female role models in leadership positions was seen as important to help women in wealth management achieve success, and this requires leaders to be intentional about building an inclusive culture, modeling positive behaviors and supporting employees.

“As we navigate the path forward, it is imperative for both men and women to commit to meaningful change, fostering true gender equity and progress,” said Julie Ragatz, vice president of NextGen and advisor development programs at Carson Group. “This commitment involves conducting studies like this, building a supportive community, creating inclusive cultures, actively recruiting more women, and ensuring ongoing support for female professionals.”