The financial planning profession needs more diverse representation – to support a diverse client base and to provide better advice. One area of diversity is gender. While women make up at least 50% of the population, only 15-20% of financial advisers are women, according to Barron’s.
How Many Women are Financial Advisers?
Although women make up more than 50% of the population, their presence in the world of financial advice is much smaller:
- The Certified Financial Planning Board of Standards reports that only 23.5% of Certified Financial Planning® professionals are women, a number that has stayed flat since the first study in 2013.
- According to Barron’s, in the broader world of financial advice, only 15-20% of advisers are women.
- The American College of Financial Services finds that only one-third of advice firms surveyed had women in client-facing roles (while 88% had women in administrative or operations roles).
My First Experiences as a Woman in Wealth Management
My father started Tree Fort Financial and began taking on investment management clients in 2003. At the time, he was, in many ways, a groundbreaker. He was a fiduciary, rather than the more common practice of being a broker who was held to a suitability standard. He charged fees for his service, rather than receiving commissions for products he sold.
Fast forward to my purchase of the practice in 2014. The world of financial advice had changed a bit since my father founded Tree Fort Financial, but in many ways the work we did had not changed – still fiduciary, still fee for service rather than being paid through commissions (except for life insurance, where commissions are donated to charity).
But something that has not changed much is the number of women in our business. I recall attending a luncheon sponsored by one of the big mutual fund or ETF providers, probably around 2015. Out of about 50 attendees, I don’t recall a single other woman – none sat at my table and none were speakers or hosts of the event. I also recall being one of the youngest attendees. I felt uncomfortable and like I had to prove myself in a strange way. No one was overtly rude or inconsiderate or dismissive – but I felt out of place. I was appreciative that my dad was there to rely on, and I probably would have had a hard time even walking in the door if I was alone.
Financial Advice – Is It a Profession for Women?
This one situation contrasted sharply with my actual experience doing the work of investment management and financial planning. I loved (and still do!) the work! It’s so meaningful – I can see actual changes for the better in my clients’ lives as I work with them over time. It’s engaging and interesting – I am constantly learning new things and being challenged to expand my skills. And it offers lifestyle flexibility – owning my own business means I get to decide when, where and how I work; with whom I work; and most of the time I have the flexibility needed by a working parent without a full time nanny or stay at home parent to rely on. If my child gets sick or has a mid-day appointment, I can usually arrange my schedule to be there for him. Plus, we’ve gotten to spend long amounts of summer at our cabin in Wisconsin, surrounded by family, where I can work remotely with relative ease.
My former career was in marketing and business consulting. Among the dozen or so employees in the firm, only 2 were men. The other marketing professionals I worked with over the years were about evenly split between men and women, and in later years skewed almost exclusively female.
Many of the skills I learned in my prior career have served me well in the world of financial advice – a high focus on responsive client service; being an empathetic listener; consideration for others’ perspectives; care for how my communications might be interpreted; the ability to multi-task and pay attention to details; the skill of staying focused on the end goal and measuring success along the way; motivating and encouraging teammates to accomplish their goals. I think many of the women I worked with in marketing have these skills.
So where are the women in the financial advice profession? What are the barriers preventing women from joining, or staying, in the profession?
Carson Group Study Finds Barriers to Women Financial Professionals
A recent study by Carson Group (link opens in new window) found many barriers to women joining, and staying, in the financial advice profession. According to the research, barriers included:
- 57% Difficulty finding a mentor
- 34% Challenges in prospecting for new clients
- 70% Difficulties in finding a firm that’s a “culture fit”
- 73% Balancing professional role with caregiving obligations
- Other – write in (Of the write-in barriers received, 47% indicated that gender-based discrimination was a primary barrier)
Women typically take on a “second shift” of caregiving in the home that includes care for children; housekeeping; meal prep and planning; and an overall invisible mental load that goes beyond what men typically face. According to the study,
“Unsurprisingly, this “second shift” for women has the potential to limit income opportunities and outside-of-work-hours achievement opportunities. One respondent summed it up by saying these obligations were a barrier because, “I don’t have a wife to come work for me.”
The Carson Group, State of Women in Wealth Management
We are short-changing ourselves, the profession, and ultimately our clients by letting these barriers persist in keeping women from this profession.
From my personal experience, this profession is a fit in so many ways for women – drawing on skills that our culture traditionally encourages in women. I was fortunate to be able to side-step many of these barriers due to the way I entered the profession. But clearly, my experience is atypical and the barriers above are real concerns.
Getting More Women Into the Profession
The Lucy Shair Foundation (link opens in new tab) is a non profit organization I’ve recently come across that works to increase the number of women in the profession, specifically by providing financial grants to help women start their own financial planning practice.
What other ideas are out there to increase women in the financial advice profession? I’d love to learn more.
