Since the birth of the profession, most financial planners have been men. Across virtually all financial planning business models, males outnumber females by three or four to one.

On the other hand, women now own more than half the nation's wealth and represent nearly half of affluent investors. And with advances in education, employment and earnings, it is widely expected that two-thirds of privately held assets will be in the hands of American women by 2030. This concentration of wealth is one that few financial planners can afford to ignore.

In addition, women may be more engaged than men in comprehensive financial planning. In a 2008 study conducted by Ameriprise and the Financial Planning Association, female respondents with comprehensive plans indicated they took more action and gained greater peace of mind from their action than did their male counterparts.

Conventional marketing wisdom holds that service providers should mirror the consumer markets they serve. Of course, male financial planners can work well with female clients and vice versa. However, recent research suggests some disconnect between what consumers would like and what they get. While 64% of women surveyed by Securian Financial in 2006 had no gender preference for their financial advisors, 27% preferred working with another female; just 9% of males cared one way or the other. Since women clients have far fewer female financial planners to choose from, these percentages may be understated.

Cognizant of women's growing economic clout, forward-thinking financial services firms and planners have aggressively recruited female candidates. Their efforts have met with some success. Female hiring, while still a fraction of male recruitment, has been rising over the past 10 years.

Retention, is another story, however. While planner retention rates have long been unacceptably low for both genders, the rate for women is worse. For example, in 2006, LIMRA found that after the fourth year, just 19% of male and 15% of female insurance agents were still with the companies that hired them.



To help the industry address these challenges, the American College recently surveyed students and alumni, looking for determinants of financial planner success, as well as differences that might exist between genders. The study was conducted in collaboration with Karen Lahey of the University of Akron's College of Business Administration. Consistent with industry norms, 75% of the 1,575 producer respondents were male.

The survey's scope was broad, with 52 questions devoted to the factors associated with recruitment and retention. Analyzing responses revealed statistically significant and wide-ranging differences between genders. Among the most notable findings were those related to industry tenure, earnings, work-life balance, education and perceptions of employer support.

One of the most striking disparities between male and female planners was in net earnings. The vast majority of respondents-approximately 80% for both genders-named commissions as their primary source of compensation. But when planners were asked about take-home pay, after expenses and before income taxes, the gender differences were startling. Nearly 40% of women netted less than $50,000 per year-almost twice the percentage of men. Conversely, the percentage of men in the highest income bracket was double that of women (see "Top and Bottom," at left).

It should come as no surprise that the survey found a strong correlation between experience and earnings. Also as might be expected, male participants had more years of experience than women: 17.8 years vs. 14.6 (see "Are you Experienced?" at left). It's also worth noting that men were significantly more likely to have been in the business for more than 16 years (43.7 % vs. 31.6%), with the opposite holding true for women: 30.4% had tenures of five or fewer years vs. 21.4% of men. The chart reflects planners with net annual incomes of more than $100,000.

Regardless of gender, it takes a long time to achieve a six-figure income. For example, just 7.2% of male respondents and 6.7% of female ones with 11 to 15 years of industry experience cleared more than $100,000 after overhead and before taxes. Considering that more than three-quarters of survey participants held a college degree or higher, that protracted reward period is both eye-opening and troubling.

Another significant contributor to producer income was holding advanced credentials, and male producers were more likely to have these than females. For example, 40% of men and 26.7% women of women respondents held the chartered life underwriter (CLU) designation. That made a big difference in income: More than half (54.2%) of CLU designees earned better than $100,000, compared to less than one-third (31.5%) of those without the CLU. These patterns were consistent for chartered financial consultant (ChFC) and certified financial planner (CFP) designations as well.



When analyzing the relationship of earnings to family dynamics, the study showed that a stay-at-home spouse or partner, or sharing home responsibilities in a two-earner household, increases gross earnings. Men were nearly three times more likely (31.1%) than women (10.2%) to have a stay-at-home spouse. In addition, about 33% of both both men and women said working at home would help them balance work and personal life (see "Balancing Act," on page 98).

With greater burdens at home, many women may be unable to dedicate as much time to their careers as men. The largest percentage of producers for both genders worked 40 to 49 hours per week (40.4% of men and 47.1% of women). More women (27%) than men (20%) reported working less than 30 hours a week. The opposite was true for those putting in over 50 hours per week, with 38.8% of males reporting this work pattern, compared with 27.8% for females.



Beyond financial rewards and work-life balance, the study showed that elements of organizational support, particularly leadership, were important to both men and women. For those who had changed companies during their financial services careers (roughly one-third had), the top reason for leaving a job was lack of leadership support (45.8% for men, 47.8% for women). In fact, poor leadership was cited more frequently than inadequate compensation.

The study also found that female producers in general placed higher value on environment, collaboration and mentoring. Women were significantly more likely than men to rank these as "very important" to retention. These findings echo other industry and academic research citing the importance of culture, mentoring and role models, particularly for those in groups with minority representation.

How is leadership relevant to financial planners, particularly veterans? Many planners act as team leaders and invest significant time and resources in developing the skills and talents of others. Strong leadership is critical to retaining planning partners and staff.



The financial services industry is overlooking qualified female candidates. Since women have outnumbered men among college graduates for more than 20 years, the female talent pool is rich and expanding. Yet, according to LIMRA, just one in four new recruits is female. Here are some actions to consider:

* Embrace innovation. Lifestyles, family structures and technology have changed dramatically-but the development of planners has not kept pace. It's time to reevaluate the "one-size-fits-all" planner model with innovative roles that integrate work-life balance, reflect changing consumer lifestyles and better exploit new technologies. Part-time or apprenticeship positions, compensation by base salary plus incentives and flexible career development tracks are just a few ways of working that may appeal to female candidates.

* Examine leadership skills and team culture. While most planners are adept at the art and science of financial planning, few have realized their leadership potential or its importance for their business. Strong leaders and a supportive culture are crucial to the success of team members both male and female. Financial planners who are now or expect to be responsible for teams can benefit greatly from improving their leadership and practice management skills.

* Encourage education. There is no greater investment in your team members or yourself than continuous learning. After all, clients hire you and your team based on the quality of advice and expertise you bring to the table. The growing complexity of financial planning warrants an ongoing commitment to educational development.

In a competitive market, increasing team competency not only builds competitive advantage, but also substantially contributes to higher revenue potential. When women are encouraged to grow their technical competencies, they lift their earnings potential and that of their partners and sponsors, as well.

As planners look to grow and ultimately transfer their businesses for maximum value, aligning team members with market opportunities is just common sense. This means actively recruiting and retaining more female financial planners. The women's market presents vast and largely untapped opportunity. The more women are recruited, retained and promoted in financial planning practices, the greater will be the potential for practice growth and increased value in the years to come.


Mary Quist-Newins, CLU, ChFC, CFP, is assistant professor of women's studies and the State Farm chair in women and financial services at The American College in Bryn Mawr, Pa.

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