Female Advisers Growing Their Business Faster Than Male Counterparts

A new study finds that when it comes to growing their business, female financial advisers do so at a faster rate, and are more likely to employ a broad array of marketing methods than their male counterparts.

Sponsored by the Advisor Group and InvestmentNews Research, “Defining the ‘Female Effect’ on Advice” finds that while women still represent a minority of the overall population of financial advisers, there has been some “notable progress in the composition of the advisory industry landscape.”

Within the independent space, the report notes that women hold approximately 34% of all advisory roles and represent nearly 16% of the total 298,000 brokers and financial advisers. Overall, 23% of advisers with the CFP designation were women at the end of 2017, which has remained constant since 2003, but the number of women holding the CFP designation grew to 18,288 — a 78% increase during the same time period.

At the individual level, women advisers reported that their personally generated revenue in 2017 increased by 60% over their 2014 revenue, while men reported 50% growth over the same period. In addition, 38% of women reported doubling their revenue over the past three years, compared to 24% of men. One explanation for the differences, however, appears to be that age is a large factor in the personal revenue growth rate, with younger advisers and lower AUM exhibiting higher growth rates. The report notes that when controlled for age, both groups appear equally successful at growing their practice.

At the firm level, those with women representing 33% or more of their professions expanded their revenue by 50%, compared to 43% for firms with less than one-third of women. Moreover, the more diverse firms generated higher revenue per client and grew their number of clients at a faster rate (38% vs. 28%), according to the report.

So what’s leading to this seemingly faster growth rate? The study notes that women advisers tend to represent a forward looking, “next generation” approach to wealth management and financial advice, and appear to employ more proactive and innovative approaches to marketing, technology, outsourcing and positioning.

The report explains that women are more inclined to describe themselves as “holistic” planners, positioning themselves to serve investors and clients with a broader set of needs, while men tend to focus more towards investment management when explaining their services. “This suggests that, male or female, advisers who position themselves as solving multiple problems — versus a singular or narrow issue — will be more likely to outperform in the future,” the report states.

In addition, male respondents were found to be more likely to not participate in marketing activities than their female adviser counterparts. According to the study, 17% of men undertake no marketing, versus 8% of women.

Women were found to employ an average of 4.6 distinct marketing activities, compared to 3.3 for men. And out of 16 potential marketing activities posed to respondents, the findings show that women were significantly more likely than men to deploy 14 of them, ranging from social media, community and networking events, online advertising, direct mail campaigns, and radio/television shows and advertising.

Of these activities, the biggest utilization differences were between online advertising (30% for women vs. 11% for men), actively posting on social media networks (51% vs. 33%) and direct mail campaigns (28% vs. 16%), the findings show. Women also reported a greater level of success with these activities. Of those who indicated they utilized each activity, women indicated significantly higher success rates on 13 of the 16 activities.

Similar to their marketing efforts, women were more likely to use technology-driven client-facing solutions. For eight of the 10 processes presented, women significantly outpaced men in utilization, especially in video conferencing (69% vs. 44%), investment management platform collaboration (69% vs. 47%) and fully-digital onboarding (50% vs. 29%). In addition, as the percent of women at a firm increases, so did the number of client-facing solutions.

The findings are based on an online survey of financial advisers from Jan. 31 to Feb. 15, 2018, with 491 total responses (203 females and 288 males).

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