In recent years, wealth management firms have talked plenty about recruiting more women. However, little has happened.
An examination of 2017 data from the Bureau of Labor Statistics reveals that when it comes to pay parity by gender, female personal financial advisors suffer the greatest discrepancy by profession. Female advisors earn 58.9% of what male advisors make. And just 32.9% of personal financial advisors are women, according to the BLS.
A 2015 GAO report states that the number of women in senior level management positions at financial advisory firms hasn’t improved since 2008, at just under 30%. And according to the CFP Board, only 23% of CFP-certified advisors are women, a figure that also hasn’t changed in years.
“Our industry is terrible about how we bring people in, so it’s a difficult environment to start with,” Debra Brennan Tagg, president of Brennan Financial Services, said to RIA Intel. “Coupled with a lack of female role models, it’s no surprise that women aren’t flocking to our industry.”
Nor does it help when industry heavyweight Ken Fisher, whose firm oversees more than $100 billion, discusses genitalia and “trying to get into a girl’s pants” at a high profile conference.
“We know why women need to be here, but the numbers are not budging at all,” said Brennan Tagg who has been active on the speaker circuit discussing this very topic for the past five years. While she’s made great strides within her own practice (made up entirely of female advisors save for one male), she thinks that largely reflects her acumen in identifying and recruiting women.
So why is it still such a struggle to scout and recruit top female talent?
Many in the industry argue that women at the university level and below are largely not exposed to wealth management as a career option. And to the extent they are, many don’t have an accurate sense what the work entails.
Nina O’Neal, partner and investment advisor with Raleigh, NC-based Archer Investment Management, is committed to helping women join the industry and advance. For her that translates into providing education early and on a fundamental basis. “The reason women aren’t in these roles is because many young women don’t know these jobs exist or what the job is. They think it’s a lot of math and analyzing stocks and mutual funds,” she said.
“If you can have younger women shadow an advisor then they can see that hands on practice. They can see those instances when you work with clients. This will shape their understanding of what the role actually entails,” O’Neal said.
When recruiting women, the job description is a crucial yet often overlooked consideration. Lisette Cooper, founder and CIO of Athena Capital Advisors, argues that a job description’s wording can significantly affect who applies and ultimately gets hired. “We’ve adapted the way job postings are written,” she began. “We de-gender them to appeal to both men and women. We even take names off of resumes to make them gender neutral when we’re evaluating them.”
Another strategy is to encourage recognition and diversity regardless of gender. “If you offer things like paid time off for maternity and paternity leave, then it no longer becomes a career penalty for one gender. If you allow all employees to work from or have a flexible schedule at home, then it’s a normal and natural part of the workplace,” Cooper added.
Cooper also hosts groups of women around the country, showing how they can make a difference while encouraging attendees to take action around gender equality. “Looking down the road, the wealth management industry has the power to be transformed by greater gender balance,” said Cooper.
O’Neal has been working with local universities in her community for years, targeting women’s colleges, programs, and sororities. “In these types of areas where advisors are near universities, advisors can get involved at the college level to help recruit women into the business,” O’Neal said.
She also highlighted a frustrating and unfair dynamic within the industry: women getting stuck in administrative level jobs. Countless women have shared their stories with O’Neal about how they began in an admin position and couldn’t find a way out. “At some of these larger firms, there needs to be a more formalized process where advisors can help facilitate a clear career trajectory forward,” she added.
To that end, O’Neal launched the Female Advisor Network (FAN) earlier this year—a national membership organization for female financial advisors. FAN’s main goal is to provide a community of support, education, mentorship, and collaboration for female advisors by female advisors.
FAN employs a hands-on approach, creating opportunities for women to speak at public events and conferences while also introducing like-minded women at industry gatherings where they might otherwise feel isolated. “We have member tags that are given to you when you join and say if you’re at an industry event and saw another advisor with the same tag, you can recognize someone else and start a conversation.”
Brennan Tagg also believes in engaging women sooner – even before college. She pointed to the all-female Delta airlines flight crew that took a group of 120 girls to NASA in a bid to close the aviation industry’s gender gap. In her estimation, this is how industry leaders can create lifelong memories for younger girls and increase their awareness of, and interest in, finance and wealth management.
Lori Van Dusen, founder and CEO of LVW Advisors, has said that when she was a child her grandfather shared annual reports and peppered her with questions. That demystified investing and spurred her to pursue, and achieve, a successful career on Wall Street, while in the process inspiring countless women. “When you distill it all down, it’s about mentoring, exposure, and helping kids gain the confidence to take risks,” Van Dusen recently told RIA Intel.
However, to transform the industry without the help of male allies simply won’t work, asserts Brennan Tagg. “I don’t think we will change anything if we do it by ourselves. We need men to be on board with us.” Frank communication is also necessary. “It’s incumbent on women to make it very clear of what needs to happen to make this change.”
O’Neal echoes this sentiment. She and a male business partner have a symbiotic professional relationship in which they help one another balance work and life obligations. “If a woman is in a situation where she has children at home, you are constantly juggling. A huge support for any woman would be to be mindful on flexible schedules and to have open communication with your team.”
Even allies need to be more mindful about their language in the workplace, at conferences, and in general. O’Neal says that when meeting a female employee at an industry conference for the first time, a man shouldn’t assume she is the secretary or assistant, but rather ask if she is the boss, because she very well might be. “We can look at this from an industry perspective for how we talk to women,” she said. “Why don’t you assume she is the boss?”
Brennan Tagg argues that wealth management can be an extremely gratifying career for women. But as an industry there needs to be dramatically more education. “There’s not even education about money in schools, so girls are certainly not thinking about wanting to go into a career they don’t even know about.”