A new report claims that only about 16% of financial advisors are women today – and offers insights on why that might be the case.
That report, from Cerulli, finds that close to half (49%) of female advisors believe that a lack of familiarity with the financial advisor profession is a major factor, according to ThinkAdvisor. “As they search for entry-level jobs out of college, look to re-enter the workforce, or decide to pivot into financial services, women often simply do not consider financial advising an option,” the report states.
Another current deterrent, according to Cerulli – though one that is changing – is variable compensation structures. “Variable compensation structures present risks that women who seek security and stability from their careers find prohibitive,” the report states.
The report notes that increasing the proportion of women advisors brings solid business advantages, not the least of which is a potential solution to the industry’s impending succession crisis and talent shortage as advisor retirement accelerates (Cerulli says that close to 40% of advisors plan to retire within the next 10 years).
According to Cerulli, the reasons driving women to become advisors can differ from that of men: Nearly all (94%) female rookie advisors – 10 percentage points more than their male counterparts – consider the desire to help people reach their goals to be a major factor for becoming an advisor. On the other hand, Cerulli also finds that the technical aspects of investment management are also less likely to draw a woman to the industry; just 59% of women versus 81% of men cite their interest in investment topics as a major reason to pursue a financial advising career.
The good news is that Cerulli found a slight uptick in female rookie advisors, which it says could indicate a positive trend toward an even gender distribution.
“It is imperative for firms to closely evaluate the gender makeup of their advisor community and gauge influences that negatively contribute to an unequal gender breakdown,” the report states. “Skirting the issue may prove disadvantageous in an evolving competitive landscape. Advisor diversity presents more than just an opportunity to vary the perspectives and backgrounds of their advisor force for the sake of inclusion.”
Seems like a good time to check out again NAPA’s list of the Top Women Advisors.