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A New Blueprint To Get More Women Interested in Wealth Management

Hidden Insights Group shares strategies to attract and retain female financial advisors, based on a survey and interviews with women in the industry.

The lack of women financial advisors is well-documented, but a new report identifies specific ways wealth management firms can turn an industry shortcoming into opportunity.

An increasing percentage of advisors are women. They represented 18.1% of advisors in 2019, up from 17.2% in 2018, and 16.2% in 2017, according to Cerulli Associates, a Boston-based research and consulting firm. Still, there should be many more. Women account for just over half the U.S. population and control a third of total household financial assets – more than $10 trillion. They also will inherit much of the $30 trillion belonging to baby boomers before 2030 and are increasingly the highest earners and financial decision makers in their household. 

For those reasons, wealth managers that better serve women could increase their revenue by as much as one-third, according to a report by McKinsey & Company, and a meaningful way to achieve that is by hiring more female advisors.

To help the industry make progress on its gender diversity, Carson Group, an Omaha-based RIA that manages $17.6 billion, partnered with the consultancy Hidden Insights Group to survey women financial advisors. Hidden Insights then published a report of the findings, along with ideas “to move this work forward through deeper research, collaborative design and/or experimentation.”

Fifty-nine advisors participated in the 30-question survey and 43 of them also participated in 90-minute small group sessions. Most respondents had more than 10 years of experience and 82% were at least 50 years old.

To attract more college students and young professionals, wealth managers could do a better job explaining what advisors find fulfilling about their work. Instead of emphasizing the challenges and rewards of investment management or salesmanship, firms should highlight the opportunity to help people change their lives for the better by making better informed financial decisions. If helping others is prioritized, the industry might attract more women; 62% of female advisors surveyed by Hidden Insights said it was what attracted them to the industry and 78% said it motivates them to stay in it.

Women also said wealth managers could support them better, something highlighted in other reports, too.

Asked to select the “top hurdles” when joining the industry, 59% of female advisors chose firm culture and leadership and half said knowledge and training. A more inclusive culture focused on mentoring, succession, and leadership would help wealth managers attract and retain women. “With so few women in leadership roles at advisory firms, it is not surprising that culture has been slow to evolve and be inclusive of women,” Hidden Insights wrote.

Respondents also said companies could be more understanding and supportive of their responsibilities outside of work. In 2020, female advisors reported levels of stress significantly higher than their male counterparts and the national average, due in part because they disproportionately juggled work and family responsibilities. But pandemic or not, many women told Hidden Insights that tradeoffs between work and family led to a perception they were less committed or engaged than male colleagues.

"Women account for an increasing amount of wealth in this country, and it's imperative that we tap their unique perspective as we reinvent the advisory profession and financial services in general," said Teri Shepherd, co-president of Carson Group . 

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