The drumbeat is growing louder and the message is clear: more women are needed in the world of wealth management.
Despite modest gains over the last two decades, women are still sorely under-represented in the field; a recent Wall Street Journal article indicates that the percentage of female brokers hovers somewhere between 10% and 30%, and according to Wealthmanagement.com, the statistics for female advisors are even worse. In 2012, women accounted for only 7.9% of all advisors, while their rank in the RIA channel was only slightly higher at 11.6%. Firms industry-wide are scrambling to close the gap.
The list of wirehouses responding to the shortage with “female-friendly” initiatives is long and impressive, and includes such industry leaders as Merrill Lynch, Morgan Stanley Wealth Management, Wells Fargo Advisors and UBS Wealth Management Americas. These firms are casting their net wide in search of new talent—reaching out not only to young professionals but also to girls in middle school and high school.
A changing demographic
The firms are reacting to several developments in the marketplace, not the least of which is the growing number of women among high-net worth investors (a number of whom express a preference for female advisors). These women are knowledgeable, savvy and actively engaged. In fact, a recent study by Schwab Advisor Services revealed that 88% want to have a say in how their advisor invests their money. Additionally, Schwab’s study revealed that 65% of high-net-worth women consider themselves financially independent and view continuous, good investment performance as more important than having a long-term financial plan (58% versus 39%). These women take a multi-faceted view of their finances, assessing long-term financial needs, their overall financial picture, their current life stage, and their children’s financial needs, while at the same time never losing sight of their immediate need for return on investments.
A shifting business model
The nature of the job itself has changed as well. Today’s financial brokers and advisors have moved toward a business model that is relationship-based, rather than strictly transactional. The instinct of many women to take a more holistic approach to the client relationship dovetails nicely with this trend.
New York-based UBS advisor Jacqueline Willens, ranked 17th in Barron’s 2012 list of America’s Top 100 Women Financial Advisors , alludes to this instinct when describing her advisement style: “My approach was always more consultative; by the time I opened an account with someone, it wasn’t because of the pitch, but because I understood the client’s needs, and the client understood what I could do for them,” Willens says.
Geri Pell of Ameriprise Financial, ranked 67th on Barron’s list, brings her personal experiences of juggling personal and professional demands to bear in building relationships with her clients. Like them, she has sacrificed in order to achieve success in the corporate arena. “I have a large amount of empathy for the politics of it all, the struggle around promotions and bonuses,” Pell observes, “but also an understanding of how to work with stock options and restricted stock.”
An opportunity for growth
Despite the industry’s commitment to attracting more female brokers, no one can make young women enter the field. The desire to pursue a career in finance as a broker or advisor will only come as more women become aware of the benefits and rewards of pursuing this career path. And much of this knowledge will come from mentoring and communications with more established women in the field. As Jane Rojas, an advisor with Morgan Stanley Wealth Management in Tucson, AZ told the Wall Street Journal, “What we need is to go out and say this is what a successful female FA looks like, and this is what we do, and this is why it’s good for women.”
Debra Brede of D.K. Brede Investment in Needham, MA, another star on the Barron’s 100 list, realized how compelling a career in finance could be while still in her early 20s. Brede intended to pursue a medical degree, but with her husband already in dental school, Brede put her plans on hold and instead focused on mastering money management, a skill she felt certain the couple would need once they both began pursuing their respective practices. Brede began her foray into finance selling municipal bonds and then moved to cross-selling stocks to her clients, many of whom are doctors. Brede thought that she was developing a valuable skill set that would serve her family well in the future and tide her over until she could begin training for her real career. “Instead, I fell in love with the business,” Brede recalls. “Just as it would have been in medicine, each client’s problems are different; each has a different diagnosis and needs his or her own treatment plan.”
Perhaps Hilary Clinton summed it up best in her recent remarks at the fourth annual Women in the World Summit. Although Clinton was talking about equal rights and education for women, her argument translates equally well to board rooms and business offices. “…Fighting to give women and girls a fighting chance isn’t a nice thing to-do. It isn’t some luxury that we get to when we have time on our hands to spend. This is a core imperative for every human being in every society. If we do not continue the campaign for women’s rights and opportunities, the world we want to live, the country we all love and cherish, will not be what it should be.”
