Covestor realizes it didn’t do a good job recruiting female model managers in the past and it wants to make a change- starting now.

On Monday the investment advisor launched an initiative to recruit more women and urged other firms to do the same.

“We’re tearing down Wall Street’s ‘Girls Keep Out’ sign,” said Perry Blacher, Covestor’s CEO, in a press release.  “Women want advice from other women and our mission is to meet that demand.”

Hiring women is a good business move for Covestor. Women say they prefer to get financial advice from women, studies have shown. And are more than twice as likely to pick a female advisor.

“You don’t need to look further than CNBC’s top-rated ‘Suze Orman Show’ to see women’s demand for female financial advice,” Blacher said. “We’re striving to meet that demand by offering women more opportunities to invest alongside other women.”

Covestor announced it signed agreements with three women who are scheduled to launch investment models by June 30th. Carrie Luckner-Zimmerman and Riddhi Ruparelia plan to launch their first models on May 30th. Luckner-Zimmerman will manage a “Long-Short Hedged” model, which is an actively-managed, aggressive equity portfolio based on market timing and perceived value. Luckner, who also runs a baking business, was previously a financial professional with a $4 billion hedge fund and worked as an equity trader. Ruparelia will manage a “Long Term Growth” model, which seeks to invest in high growth companies after thoroughly analyzing their business models, management strength, growth potential and valuation. Anna Jiang, a quantitative research specialist, is scheduled to launch an investment model in June.

The company’s goal is to have a dozen women model managers by December. Of the 124 model managers the firm had previously, only one was a woman. While almost half the US workforce is female, women are only 10% of traditional mutual fund managers and just 3% of  the 9,000 hedge funds in existence have a woman in charge, according to Women in Fund Management, a 2009 report published by the National Council for Research on Women.

As part of Covestor’s iniative it plans to:

  • Make a donation to Women in Insurance & Financial Services, an organization dedicated to attracting women to the financial services sector.
  • Prominently profile women on its blog.
  • Organize a networking event for women in the investment industry.