3 ways for firms to win more female financial advisors

July 28, 2023 7:43 PM

Diverse women advisors businesswomen in office

Wealth management veteran executive Kate Healy likes to tell the story about the time she was buying a car about 15 years ago. While she was waiting at the dealership, a man from the finance department walked in.

"My credit report was printing out. And he didn't know [whose] it was. And he just said, 'Hey, who has this client?'" Healy said.

When Healy said she was the person in question, the man was surprised.

"He walked over. He goes, 'Wow, you have a really good credit score.' And I'm not kidding, he patted me on the head."

Healy, the former managing director of the CFP Board's Center for Financial Planning (which she left recently to start her own consulting practice), said in an interview that while things have come a long way since that day, the industry still has far to go in catching up to serve women investors, as well as women advisors.

Women currently make up just over half the U.S. population, at 50.4%, according to data from the U.S. Census Bureau. The same data source reported that as of 2021, nearly three in five members of the American workforce, aged 16 and older, was female — 58.7%. In addition, women's financial power has surged in recent years — and as a population, they are expected to inherit much of the $30 trillion estimated to be passed down through 2030, according to McKinsey.

"In households, women make over 75% of the buying decisions, whether that's a car, an appliance, where you're going to buy the house," Healy said. "There is so much power in the woman's pocketbook, that financial planners don't always see."

Yet only 23.6% of all certified financial planners are women as of the end of 2022, according to the CFP Board. Women only make up 35.1% of all personal financial advisors, according to the Bureau of Labor Statistics, despite the fact that women in the industry who spoke to Financial Planning said it offers working conditions well-suited to women. The profession also pays handsomely, at a median annual salary of $95,390 and mean salary of $137,740, according to BLS data from May 2022 — which could help more women close the gender wage gap.

Mindy Diamond, the founder and CEO of industry recruiting firm Diamond Consultants, said in an interview that wealth management firms had frequently expressed interest in hiring more diverse advisors and employees, which suggests the problem may be not lack of intention among HR directors but sometimes rather confusion over how to win those candidates.

"As a woman myself, I get probably more calls than most recruiters do, from firms looking for us to help them to increase their ranks of female advisors," Diamond said.

Financial Planning spoke with experts in the industry on how wealth management firms can succeed in attracting and keeping more female advisors. Below are three tips they shared.

Market the work as relationship-centered

The way a career or job as a financial advisor is marketed to women could make a big difference in their comfort or interest in applying, according to Michelle Barry, the president of Rockville, Maryland-based wealth management firm Grove Point Financial.

"Women will be interested in this profession, if it's that 'I help people with what to do with their money,' versus 'I go in this to make a lot of money. I go in this to make wealthy people wealthier' — that may be more attractive to someone who is competitive, sales driven," Barry said.

Research has shown that job posts with heavily masculine language, focused on things such as achievement and dominance, are perceived by women to be less appealing and less welcoming.

Healy agreed. "Women often have a perception that this career is all about money, it's commission-based, it's hard for them to raise a family on commission," she said, adding that many roles in the industry don't fit that stereotype.

The CFP Board created a guide, Healy said, to visually walk potential entrants to the profession through how they could achieve a sustainable path in the field and "understand that this is a place that you can be part of."

Help male advisors see the value of a female presence on teams

Sometimes, male advisors may be uncomfortable with a female client because the way of communicating with them may feel less intuitive to the advisor than with a male client, Healy said.

Specifically, female clients may be more inclined to ask lots of questions. That's where encouraging the advisor to have female advisors on his team can help ensure more of a fit in service delivery styles, while securing valuable business for the firm.

"If you're frustrated if someone asks too many questions… that's probably not a client you should be working with," Healy said.

"But there could be someone in your firm that would be great with that client, and that's why it's important to work in teams. Sometimes you get that dynamic of, 'No I understand this client, I understand where they're coming from.'"

Advertise flexibility

While some big employers have pushed for a full return to the office, others that have continued to offer remote or hybrid work at this point in the somewhat post-COVID era are likely to win more women if they advertise the flexibility that the role can have — since it is simply a reality that women more frequently than men are caregivers, and are stuck with a greater portion of housework and chores even when they are the higher earner in the family compared to a male spouse. Offering benefits that promote work-life balance can also help an employer stand out.

"It can be flexible," Barry said of the profession, adding that for independent firms that can especially be true.

"Our advisors are running their own business. So you can choose to work the schedule you want to work, you can choose to have 100 clients or 1,000 clients — it just depends on what you envision, how big of a practice you want," she said.