The number of female financial advisors continues to drop, in part because they remain underpaid compared to their male counterparts and because there are cultural barriers that persist at the executive level, according to a new study by Pershing.
In its study, “The 30% Solution: Growing Your Business by Winning and Keeping Women Advisors,” offers the industry insights and ideas on how to better recruit and retain women.
Women make up half of the U.S. population and two-thirds of the American workforce and yet they only account for 30 percent of financial advisors.
“While attrition is eating away at the number of current advisors for a number of reasons, the need for investment advice continues to grow,” said Kim Dellarocca, head of practice management and segment marketing at Pershing. “In fact, we expect that financial services firms will need to recruit hundreds of thousands of new advisors over the next decade to meet growing demand. Financial services businesses would be well-served to better recruit and retain women advisors to help fill this need.”
Pershing believes there is a large demand for female advisors because 46 percent of women investors are more likely to hire an advisor than 34 percent for men, and many of them prefer to work with female advisors, who don’t force clients into one-size-fits-all categories.
According to the study, women-owned businesses represent trillions of dollars in economic activity. To realize the full potential of this market, Pershing says that advisors should look to build broad client relationships that address business and personal needs at the same time.
Many newly divorced women seek financial advice because of the unequal level of attention and service they received, compared to their husband, from their advisor when they were married. As a result, divorce planning is now a burgeoning specialty for advisors, with growing numbers becoming certified as divorce financial analysts.
Some savvy financial services firms have begun to edge ahead of their peers with new programs to enhance the role of women advisors, offering practical steps, like the following, that virtually any business can take:
- Conduct an honest self-assessment – If you would like to achieve greater success in working with women advisors, start by benchmarking your current situation (i.e. What are your specific hiring goals and motivations for doing so?)
- Launch an internal affinity group — These firm-wide professional networks help promote mentoring, the exchange of ideas, mutual support and lasting personal relationships among peers.
- Promote sponsorship – Led by senior advisors, these sessions can help developing advisors segment their clients, stay engaged, strengthen their relationships and improve the efficiencies of their businesses.
- Start a development talent program — Developing talent programs are designed to offer promising women advisors high-profile exposure to senior leaders, combined with exclusive training and networking opportunities in a central location.
“Women advisors are critical to the future of wealth management,” Dellarocca added. “The good news is that firms can unlock a variety of new market opportunities, and create loyal and satisfied clients in the future, by investing in — and cultivating — talent today.”