At the beginning of 2017, only 16% of all advisors were women, according to a report by Cerulli Associates. Sixteen percent.
That number paints a very stark picture. While there is still a great deal of work to be done in our industry when it comes to recruiting women, there are benefits, too. Aside from simply filling an obvious gender gap, new evidence is emerging about the reasons why firms should consider hiring more women and why diversity benefits clients and firms alike.
To start, female advisors align well with the preferences of next-generation investors. Generation X and Y millionaires expect their advisors to deliver comprehensive services and a more holistic approach to financial planning by utilizing technology, according to a 2017 Fidelity study. And, their numbers are growing. Gen X and Y investors now make up 18% of millionaires, up from 8% in 2012, according to the research.
And guess what? Those preferences align well with the attitudes of many female advisors. Women advisors are more likely than men to cite being able to provide a higher level of client service as a top benefit of switching to a new firm, according to a 2018 Fidelity study. Women advisors also strongly agreed that an effective online strategy is essential to remaining competitively differentiated, fulfilling younger investors’ desires to interact through technology. So, as a new, diverse wave of investors (with significantly more women making household purchasing decisions) comes to the forefront, it seems that women advisors will be aligned with these changing investor needs.
People with different backgrounds also offer unique perspectives and experiences, which can help with decision-making, problem solving, creativity, innovation, and flexibility among teams.
So, now that we know why firms should consider recruiting more women, how can you make it happen?
KNOW WHERE YOU STAND
Consider doing an assessment of diversity at your firm and then evaluate the current recruiting process to better understand how hiring managers and recruiters are interacting with potential advisors. Doing this initial leg work can help uncover opportunities to connect with more diverse candidates as well as identify actionable ways to become a more attractive destination for female candidates. For example, SunTrust Private Wealth Management says an internal assessment was the first step in its successful initiative to recruit and retain female advisors. The firm now boasts one of the highest percentages of women advisors in the industry at 30%.
While money is still important, women were less likely than men to cite the ability to earn a high income as a primary motivator for pursuing a career as an advisor, according to Fidelity’s 2016 Financial Advisor Community, Future Ready Study. Instead, female advisors were more likely than men to first note things like the ability to provide greater value and a higher level of client service.
So, while you certainly want to cover off on compensation in your pitch to female advisors, make sure to also give them a look at the full picture. Recruiters might want to consider also highlighting their firm’s client-centric focus, and how the firm empowers advisors to help people.
A PATH FORWARD
When it comes to emotional benefits, women want more control over their own future or destiny, the ability to realize their own business vision and the ability to be their own boss, Fidelity research found. Emphasizing what your firm does to encourage professional development and growth is important.
When speaking to recruits, talk about more than the job they’d have today — give them a glimpse into what their future could look like.
COMMIT TO TALENT
Consider things that will nurture talent (like a mentorship program) to encourage rookie female advisors to develop into advocates for working at your firm. Advisors who work for a firm are a top influence when people make a switch, so it’s important that your team feels you’re committed to their success, Fidelity research found. SunTrust even set up targeted programs for women advisors, including events focused on education and training, networking opportunities and sharing best practices.
This kind of investment not only helps develop talent, but illustrates to associates that the firm is dedicated to their professional growth.