As a woman in the male-dominated advisory profession, I've experienced bias. I’ve had people assume I’m the assistant or note taker and had clients call me “sweetie,” seemingly because I was the only female in the room. Some have even questioned my age and whether I'm qualified to handle their money.
Being an established female in the advisory profession, a division of the finance industry, sets me apart because fewer than 25% of CERTIFIED FINANCIAL PLANNERS™ are women. That number decreases as the career level rises. Statistics from Catalyst regarding women in finance show that women held only 12% of CFO roles globally in 2018.
There are more opportunities for female advisors as firms seek to increase diversity. However, hiring should be based on more than filling a gender quota. It should be based on merit, understanding that most women have the same industry knowledge as men.
Otherwise, the problem of gender equality in the advisory profession will never be solved.
The lack of gender equity among advisors
Equal representation is a problem in general, but it's more prevalent in the advisory profession. So why aren’t there more women in finance?
One key reason is that women don't see other women in the industry. Being a female among advisors can be daunting when almost no one in leadership roles looks like you.
The lack of gender diversity in the advisory profession also stems from the fact that many women associate financial advice with sales, as I did. In college, I pursued a social work degree because I wanted to help people. While in school, I discovered the program to become a CERTIFIED FINANCIAL PLANNER™ and learned that I could meld my love of spreadsheets and numbers with helping people. As a CFP®, I love that I can provide peace of mind to my clients and help them achieve some of their most important goals, like living their dream retirements, sending their kids to college and giving to charities they support.
The importance of women in the advisory profession
Despite the significant lack of women in our profession, we need them more than ever.
Gender diversity has been shown to increase the bottom line. A recent study by Boston Consulting Group showed that companies with more diverse management teams had 19% greater revenues than those with below-average diversity in leadership. Diversity leads to different points of view, ideas and approaches to business.
Additionally, women outperform men when it comes to investing in stocks, so it’s no surprise that many women investors want to work with women advisors. As college-educated women see salary gains and become top earners, they use their money to shape the services they want, especially when picking financial advisors.
Women also often rank higher than men in key leadership capabilities. A Harvard Business Review analysis of 360-degree reviews showed that women outrank men in 89% of the skills measured, including inspiring others, building relationships, taking initiative and communicating powerfully and prolifically. These are all key traits of a great financial advisor, especially one that has a varied focus.
- Given those benefits, let’s explore why there aren't more women advisors. It starts with hiring but continues into every part of an organization. The following are several ways firms can encourage gender diversity in financial services:
- During hiring, determine the qualifications necessary to fill the position. When distributing résumés to the team to review candidates, remove the names to avoid any implicit gender biases.
- Consider the skills of other industries and professions when looking to fill advisor roles. Teachers, social workers, psychologists, pharmacy sales representatives, scientists and engineers all have valuable people skills, for example. Candidates can learn the finance element, but people and advisory skills are often a better indication of how successful they will be.
- Promote a flexible culture and family-oriented benefits, like a good paternity leave program. Give people autonomy and the ability to integrate work and life. Flexible work schedules allow parents – both women and men – to leave early for their children's activities and then complete their work at night.
- Let candidates and employees know all the possible career options and paths within the financial field. Women who don't think they meet all the job qualifications are less likely to apply for promotions. Firms that are able to increase the confidence of their female employees will have more success in promoting them to senior roles.
- Give women – and men – access to sponsorship. The 2017 Women in the Workplace survey revealed that women are more likely to be promoted when they receive advice and sponsorship from senior staff members. This is an especially important way to break the barrier of advancement for entry-level employees.
Being a female among advisors isn't easy. That's why I started InspireHer, Plancorp's women's initiative. Our goal is to help women become more engaged with their financial lives by providing educational content and giving them a platform to feel comfortable asking questions.
Aside from the external results, InspireHer has had positive effects on Plancorp. The number of women in the office has greatly increased, more women are involved in the interview process and our CTO (a woman) has started seeking women from other industries. More importantly, it's a great resource for the entire Plancorp team and our clients.
The more we talk about gender diversity, the more welcome women will feel. We know the benefits of hiring women. It's time to show women we need them in our companies by hiring and promoting them.