The financial advisory business is growing and more advisors say they are satisfied with their jobs, yet fewer women (especially young women) are entering the profession.
What does this mean for the future of the industry?
This question has come up again and again at the Women Advisor Forums SourceMedia has held across the country. Forums like this one are critical precisely because women feel like the odd-one-out at most conferences and functions. Yet when women look around at these events they notice that there are very few young women. And the industry as a whole is graying. Which leads me back to my original question: where will the next generation of financial advisors come from?
At the most recent Women Advisor Forum, which was in Santa Monica, California earlier this month, a young woman raised her hand and said that one of the hardest parts of being a working woman is balancing career with motherhood. Later I tracked her down and found out her name was Cheryl Young, she owned her own firm, Young & Associates, had two kids and was “broaching 40.”
While Young said she feels like she has “all the flexibility in the world,” which was a goal of hers when choosing a career, from a firm perspective she feels women are outnumbered. “I don’t think firms have as many resources as they could or should to take care of female advisors,” Young explained. “I think in general it is a male-dominated industry so no one thinks the accommodations are important. And women in general are nervous to talk about what they need,” whether it’s a place to pump breast milk or the desire to go out for lunch somewhere other than a strip club. “Women aren’t voicing their needs and management isn’t asking enough questions.”
Even Young, who prides herself on asking for what she needs, was scared to tell her clients that she was pregnant until she was seven months and showing. “I thought they’d fire me because they thought I had other needs,” she explained. An ‘aha’ moment came when her clients reassured her that having children was a natural progression of life. “But many women feel like they have to put in more time than ever before because they want to prove to their clients that they are there for them,” she added.
Besides the clash between career and motherhood, which women in all fields feel, another challenge to ensuring women are in the pipeline for advisory jobs is making sure women know finance is a career option. Without finance classes in high school or even college, many women end up in other careers (especially more traditional careers like nursing or teaching) without even looking into the higher paid and higher-powered jobs in the finance industry.
Firms are becoming more aware of the need to hire women, but it takes time - and money - to do so. And as firms incorporate women they have to ask themselves some very real questions: Do they have on-site childcare services? Do they offer parental leave to both men and women? Do they have other benefits that make women want to work for them? Are they making women feel comfortable that the industry is not just an “old boys club”?
Twenty-two-year-old Kiersten Rich, client services manager at American Financial Network, agrees that firms need to make the working environment conducive to bringing women on board. “You don’t want to be the only girl or have any special circumstances,” she said. But that’s exactly what happened to her. At university the majors broke down along gender lines - women in the helping professions and men in engineering and business. “As long as people think that there are no women in business, women won’t go into business,” she said. “I was only one of two women in my business classes.”
Rich asks why personal finance is not taught to young children and teenagers: “Why is Home Economics a course offered, but not personal finance?” And why are there so few mentors?
The mentor question is one that Clara Sierra, executive vice president of Sentinel Investments, focused on in her closing keynote presentation at the Women Advisor Forum in Santa Monica. Sierra has been in the financial services industry for over 20 years and has seen as fewer and fewer women have followed behind her. One reason is that those in the industry – and the industry at large – is not reaching out a hand to bring up the next generation, either by recruiting at job fairs or through direct mentoring. “Things were so busy in 2005 and 2006 and business was so great that we didn’t spend enough time harvesting for our future,” she said. “Then in 2007, 2008, and 2009 the market took a drastic turn and a lot of great people in financial services either off-ramped or were downsized.”
Because of all the turmoil in financial services many young Americans weren’t interested in being associated with an industry that was known for almost bringing the global economy to its knees. Meanwhile, those on Wall Street didn’t advocate for the industry either. Now there are so many tenured advisors who were in financial services and are now out of work, crowding the landscape, Sierra added.
One key to recruiting that next generation of female financial advisors is to get the successful women in financial services out in front of young women: on panels, in magazines, on television and speaking at colleges.
“Women are 50% of the workforce and the numbers keep growing and growing,” Sierra said. “Now we have to get these successful women to be seen more.”