The financial services industry is about to be disrupted by an unprecedented, history-making shift in demographic power: Baby boomers, who make up America’s largest generation, are reaching their last years in the workforce and will be retiring en masse over the next decade. For our industry, that means many partner-level financial advisors are preparing to exit the firms and the teams they have helped build and grow. Simultaneously, those firms will see an increase in the number of high-net-worth clients who are seeking personal retirement planning and investment advice. Enter, the “next generation” — the young, up-and-coming advisors who have been primed to take the reins from their successors and prepare their firms to serve clients with a host of different, complex needs.
Unfortunately, a very low percentage of those next-gen financial advisors will be women. At least, that’s what the data tells us today: Sixty-five percent of newly hired, entry-level support (or “associate”) advisors are men, according to a survey report compiled by InvestmentNews and State Street Global Advisors. Moreover, male advisors are being promoted at a faster pace than their female colleagues, at a rate of 16.5% versus 10.3%, respectively.
The good news is that the industry is ripe for change. As we prepare for this major shift in advisor and client demographics, today’s financial advisory firms must re-invent themselves to remain viable and relevant — and that includes the make-up of their teams. There’s truly no better time to reverse the statistics and bring more next-gen female advisors into the fold.
There are three, major barriers we need to knock down first:
1. The Pay Gap
Last year, full-time female financial advisors earned 59 cents for every dollar earned by their male peers, according to the Bureau of Labor Statistics. We can’t resolve gender disparity in the advisory profession without closing the pay gap. In fact, this is one of the reasons why we founded Equita Financial Network. Our mission is to offer female financial advisors the resources they need to run their own financial planning businesses, which can allow them to receive the pay they are entitled to and keep more of what they earn.
We hope that other leaders in the industry follow suit. By providing women with opportunities to run their own practices, and by encouraging firms to prioritize the need for female leadership, we can open doors for next-gen female advisors to work for firms that respect, celebrate, and nurture their talents and expertise. Empowering women as firm leaders also ensures that these next-gen advisors have role models to emulate and look up to. These women will be able to see themselves as leaders by following the example of those who came before them.
2. The Lack of Flexibility
According to the research conducted by InvestmentNews and State Street Global Advisors, 20% of women advisors noted that striking a balance between career and family was the top barrier to professional advancement.
At Equita, we have seen, firsthand, the unconscious bias and discrimination that can arise in firms in which a healthy work-life balance is not a priority — particularly for women who juggle child-rearing and caregiving responsibilities while managing demanding careers. We can boost the number of women who actually stay in the industry when we provide the culture and environment that makes them feel fulfilled in their work and quality of life.
3. The Missing Network
In the InvestmentNews and State Street Global Advisors report, DeAnne Steele, Managing Director and Private Client/Institutional Advisor at Bank of America Private Bank, asks:
“What can we do to create a better sense of inclusion? Why do women not think to become financial advisors when they are so perfectly suited for this industry?”
At Equita, we believe that networking is the solution to so many of the issues that female advisors face — but most importantly, it solves the issue of representation. Since our company’s inception, we have spent countless hours talking to our female peers, with the goal of uncovering solutions to these detrimental problems affecting our industry. In every conversation, we have realized that what female advisors truly want (and need) is a group of women they can rely on — women they can turn to for advice, for support, and for partnership.
It’s why we have dedicated our professional lives to providing women with the collaborative network they need to succeed, at every age and stage of their careers. Equita is a platform for sharing best practices in business and for client solutions, but notably, it provides that critical missing piece to help women build successful careers in financial planning, thereby retaining them in the field.
The financial services industry will not survive if it doesn’t disrupt itself. Firms must transform to retain diverse, next-generation advisors that will help bring fresh perspective and expertise to their clients. Help us lead the charge to effect change and keep women in a profession that so desperately needs them.
Are you interested in joining the Equita network or learning more about how we can help you? Contact us today.