Female financial advisors are generally more satisfied and loyal to their firms than their male counterparts, but they do have some unique pain points that firms that want to be leaders in this area will need to address, according to a new report.
J.D. Power’s 2018 U.S. Financial Advisor Satisfaction Study measures satisfaction based on a 1,000-point scale among both employee advisors (those who are employed by an investment services firm) and independent advisors (those who are affiliated with a broker-dealer but operate independently) on seven key factors: client support, compensation; firm leadership, operational support, problem resolution, professional development and technology support.
Overall, the study found that advisor satisfaction with firms has improved, averaging 726 among employee advisors, up 7 points from 2017. In addition, satisfaction among independent advisors averages 753, up 1 point from 2017.
But for female advisors, their average overall satisfaction score is 786 among employee advisors, 59 points higher than their male counterparts. Among independent advisors, overall satisfaction among women is 793, which is 39 points higher than among male advisors.
Female advisors were also found to be more likely than male advisors to say they “definitely will” remain at the same firm over the next 1-2 years (68% vs. 56%, respectively) and are more likely to say they “definitely will” recommend their firm to others (60% vs. 50%).
Citing recent data from Cerulli and BMO Wealth Institute, the study notes that estimates suggest that women now control 51% of total U.S. wealth, yet despite the attention that fact has received within the industry, women still represent just 16% of all financial advisors.
One key to closing this gap, according to the study, is creating more advocates among existing female advisors, who are best positioned to influence other women to enter the industry.
“The wealth management industry clearly recognizes that aligning the gender mix of advisors with the shifting demographics of investors is critical for their success,” explains Mike Foy, Director of the Wealth Management Practice at J.D. Power. “But firms that want to be leaders in attracting and retaining top female talent need to differentiate on recognizing and addressing those areas that women’s perceptions and priorities may differ from men’s.”
While female advisors provide higher ratings in the study for their firms than do male advisors, there are a few areas where they underperform, the authors note. Firms interested in being an attractive destination for female financial advisors should be aware of matters pertaining to work/life balance, compensation and mentoring programs.
- Women are significantly more likely than men to say they do not have an appropriate work/life balance (30% vs. 22%, respectively). And 90% of women who do have that balance say they “definitely will” recommend their firm, compared with 68% of those who do not.
- Women are less likely than men to say they “completely” understand their compensation (60% vs. 66%, respectively) and, similarly, less likely to believe it reflects their job performance (60% vs. 68%).
- Women are less likely than men to believe mentoring programs are effective (44% vs. 53%, respectively).
The study is based on responses from 3,227 employee and independent financial advisors and was fielded in January-April 2018.
