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4 Signs It Might Be Time to Leave Your Financial Advisory Firm

Over the past five years, more than 800 advisors have left wirehouses or broker-dealers to join registered investment advisors (RIAs), according to Financial Planning — despite the demanding work, stress, and uncertainty of not knowing whether their clients will follow. So, why do they do this?

“It’s generally rare that someone just wants to do it for the money,” says Kilpatrick Townsend attorney Paul Foley in the Financial Planning article. “There’s a broader scope of issues.”

Some of these issues? Corporate bureaucracy, a bad manager, larger firms shunting an advisor’s smaller clients to call centers, lack of opportunities for growth…

We both faced some of these issues when we worked for larger firms, and it’s why we started our own solo firms — and then later launched Equita Financial Network to help other female financial planners do the same.

If you’re on the fence of whether or not you should leave your firm environment, we include four warning signs below:

1. You’re not being paid what you’re worth.

Female financial advisors have the widest wage gap of all occupations tracked by the U.S. Department of Labor, reports Financial Planning in a 2018 article. Female advisors earned just 59 cents for every dollar their male peers earned in 2017. Why is this? Unfair treatment, accounts being passed down to male advisors, and barriers during networking are just a few of the reasons.

By branching out on your own, you can have more control over how much you make. Seven in 10 advisors report making more money after they moved to the independent channel, the 2018 Charles Schwab Independent Advisor Sophomore Study found.

2. You’re not able to do right by your clients, and you feel constrained. 

Going independent gives you the freedom and opportunity to truly put your clients’ interests first. In the Charles Schwab study, 94 percent of the polltakers said they went independent because they wanted to do what was right for their clients; 73 percent said they wanted to build better, longer-term relationships with clients.

And going independent has been paying off: advisors from the study said they have kept an average of 87 percent of their clients after making the transition.

3. You have no flexibility between work and life.

Work-life balance can feel nearly impossible in the financial services world. It also doesn’t help that, “the disproportionate responsibility of raising young children that falls to women often causes them to drop out of the workforce if they don’t get the right support,” as Barrons puts it.

Both Bridget and I can speak from personal experience about not finding work-life balance at larger firms during our careers.

Here’s one example: When my nanny called in sick after my first son was born, my husband and I tried our best to cover our work responsibilities and childcare until she could return. When I went back to work, my supervisor told me that I needed to find a contingency plan for childcare if my nanny couldn’t make it, and that “plan” couldn’t be me.

At that particular moment in my life, I needed flexibility — I needed to work for a firm that was able to understand my needs as a new mom. Owning my business allows me to be both present as a mom and present with my business and clients. Yes, I work long days, and early mornings, and late nights, and usually on the weekends when the kids are napping — but I love that I can have my career and still be present in their lives.

4. It’s a toxic work culture.

If you dread going to work every day, if you feel constant anxiety during meetings, if you’ve given up trying to voice your opinion because you know it will be quickly dismissed — know that there’s nothing wrong with you. It’s your toxic workplace culture. According to SHRM, 58 percent of employees who quit a job due to workplace culture say that their managers are the main reason they ultimately left — and the cost of this turnover has been $223 billion in the past five years.

The same Charles Schwab survey I mentioned above found that of the financial advisors who made the leap to independence, 90 percent said they have no regrets and would make the same decision all over again. Those same survey respondents said they are happier now that they are independent, and they have made more money since going independent.

 

Do you face these four issues? Then it may be time to carve out your own path. Starting your own firm comes with emotional and financial challenges, but it’s worth it, as studies have shown.

Equita Financial Network provides the support, network, and resources needed to run your own firm — and research has proven that women who support each other are more successful. I’ll leave you with a quote from Shelley Zalis, who wrote an incredible article on the power of collaboration between women earlier this year:

“Women trying to rise up into leadership face cultural and systemic hurdles that make it harder for them to advance, such as unconscious bias. [According to Harvard Business Review,] a way to overcome some of these hurdles is to form close connections with other women, who can share experiences from women who have been there, done that — from how to ask for what you’re worth to bringing your unique talents to leadership.”

We couldn’t agree more. If you’d like to join our tribe of supportive, smart female financial planners, contact us today.

Financial Services Has a Diversity and Inclusion Problem — and It Goes Beyond Ken Fisher

Financial services is one of the least diverse sectors in the U.S. But you didn’t need us to tell you that. Just look at recent headlines to see the state of our industry.

In early October, billionaire CEO Ken Fisher made horrifying, sexist comments at the Tiburon CEO Summit in San Francisco: comparing building client trust to “trying to get into a girl’s pants,” among other disgusting comments.

Fisher has now issued an apology, but it feels less than genuine. Before the apology was issued, he told Bloomberg that he didn’t understand why people were offended: “I have given a lot of talks, a lot of times, in a lot of places and said stuff like this and never gotten that type of response,” he said. “Mostly the audience understands what I am saying.”

Fisher’s complete inability to accept responsibility — or even understand why he was wrong in the first place — shows how insulated white men in finance have become from the rest of the world. As Sallie Krawcheck, cofounder and CEO of Ellevest Financial Inc., notes in her recent Forbes piece, “the financial services industry has been almost completely silent during the #MeToo crisis.”

Women don’t feel comfortable or welcomed at industry conferences.

Women don’t feel comfortable or welcomed in company meetings.

Women don’t feel comfortable or welcomed in finance, period.

This brings us to an important topic that our industry needs to address: inclusion.

Yes, it’s wonderful that the industry is now tackling the issue of diversity and trying to hire more women, minorities, and underrepresented groups — but none of this will make a difference if they don’t feel welcomed.

As Edward Jones financial advisor Jackie King notes in her recent piece for InvestmentNews, “Diversity is visible, but inclusion is felt.”

What Does Inclusion Look Like?

Gallup defines inclusion as a “cultural and environmental feeling of belonging. It can be assessed as the extent to which employees are valued, respected, accepted, and encouraged to fully participate in the organization.”

What are some examples of inclusion in the workplace in the financial sector?

Why Inclusiveness Is Important

So why is this important? Because, as Allan Boomer writes in Financial Planning, when your firm is not inclusive, employees will constantly have their guard up. They will never feel confident or secure about being themselves at work. They won’t be fully engaged in their jobs, and you can bet they will walk out the door.

Some companies balk at the idea of diversity and inclusion initiatives because it requires introspection about their internal practices — and their personal biases.

But creating an inclusive environment isn’t just common sense; it’s also essential if you want your company to succeed. It affects recruitment, retention, and the bottom line. Here are some stats to back this up:

  • 67% of job seekers consider workplace diversity an important factor when considering employment opportunities, and more than 50% of current employees want their workplace to do more to increase diversity.
  • Companies with higher-than-average diversity had 19% higher innovation revenues.
  • Companies with more women in leadership positions consistently outperform companies with less than half of their leadership positions filled by women. Higher representation of women in C-suite level positions results in 34% greater returns to shareholders.
  • Only 40% of women feel satisfied with the decision-making process at their organization (versus 70% of men), which leads to job dissatisfaction and poor employee retention.

How to Create an Inclusive Culture

Gallup lists these three requirements for a diverse and inclusive culture:

  1. Everyone treats everyone else with respect.
  2. Managers appreciate the unique characteristics of everyone on their teams.
  3. Leaders do what’s right.

Following these three pillars is a great way to ensure your environment is inclusive. Whether you lead a team at your firm, or you’re thinking about building your own financial planning firm, here are some more actionable steps you can take to enrich your company’s culture:

  • Build communities of support for diverse financial advisors through events and conferences.
  • Offer mentorship programs.
  • Shift the hiring goal from “culture fit” to “culture add.”
  • Hire diverse leadership.
  • Train leadership and managers.
  • Set policies.
  • Create a safe way for employees to communicate issues.
  • Involve employees in discussions about inclusion.
  • As Nathan Yates recommends in his Institutional Investor piece “The Finance Jobs I Didn’t Get,” create a safe environment for employees who are differently abled: 1) Integrate efforts to hire more disabled people into existing diversity programs, 2) increase telecommuting opportunities, and 3) network with assistive technology consultants and with people who can feed qualified disabled candidates into your firm.

How Equita Financial Network Helps

Inclusiveness for women in finance means…

  • Not being chastised for having to request time off to bring your child to a doctor’s appointment.
  • Not having to worry about facing sexual harassment at industry conferences and events.
  • Having coworkers who truly understand the unique challenges that come with being underrepresented, undercompensated, and underappreciated in a male-dominated field.

We have been there. We’ve faced our fair share of dismissive comments from those who could not relate to or understand what women in finance face every day.

This is not to say that men have not been allies or supporters of women in the financial services field, but many have not made the conscious effort to be part of real change. Yes, these are tough issues, ones that are rooted in decades of systemic bias and inequality. But putting them off, or putting band-aids over them, gets us nowhere.

We got tired of waiting for a level playing field, so we built one ourselves — one that actually does prioritize diversity and inclusion.

Equita provides a network of other like-minded, driven women financial planners who want to share best practices, collaborate, and support one another — and that is an important piece that’s missing in our industry.

We created this platform to empower women to build the business they want — and to give them every tool they need to succeed. If you’re interested in joining our network, reach out to us today.

How Collaboration in Business Makes a Difference to Women

This blog post is updated from a February 2019 article written by Equita co-founder, Katie Burke.

Let me take you back to a tough day I faced a few months ago. It was one of those days where, by noon, I felt defeated.

There were a few reasons that contributed to this: I started my workday with two sick kids who followed my every move as I tried to navigate a schedule full of conference calls (very thankful for the quick response of the mute button on my headset!) and client deadlines. The stress of trying to juggle work, dealing with constant sickness, and holding everything together at home were finally taking a toll on me.

But then came my last call of the day, which left me with a lasting, positive impression.

The call ended, and suddenly I felt energized and optimistic, instead of feeling stressed, overwhelmed, and exhausted. That call solidified that I am exactly where I am supposed to be — running my own business, and doing what I love, on my own terms.

What made this call so special?

Every other week, our Equita member firms have a call to discuss a wide range of topics. On any given day, our members may share a new tool they discovered that has made their client service process more efficient — or they may swap ideas for marketing to centers of influence (COIs) or strategizing about the fee structure for a prospective client.

In this particular call, we discussed our business goals for the coming year. I started my firm, Method Financial Planning, almost four years ago — and this conversation that I had with our Equita members made me realize that the way I typically think about my annual business plan and goals is different than the way everyone else on the call approached their business plan. Some plans were in a spreadsheet format that outlined expected revenue in careful detail; others were nicely written documents listing out marketing plans and new ways to find prospective clients.

My planning approach is usually more of a mix: I might outline a few details in a spreadsheet or draft some written goals, but most of the time, I put my plan into a list of bullet points on a glass whiteboard in my office. When I complete one of the bulleted items, I physically cross it off the list — and it is the BEST feeling in the world. I look at the list every single day.

So, what is the best approach?

It’s actually not the approach that matters. The conversation was not focused on the best way to write an annual business plan; but rather, it provided our member firms with an opportunity to look at the process from different perspectives. The call gave us a chance to be vulnerable and learn — and not only did it get me excited about where my firm was headed for the year, but it also got me excited about where every woman on the call was headed, too.

Bridget and I have conversations every single day with women who want to take the leap and build the financial planning business of their dreams. Each conversation is unique because each woman faces her own challenges in making it happen — and her own hesitations.

How can you leave behind the security of a steady paycheck, while still supporting your personal and business expenses? Will your clients want to continue working with you once you’ve left your old firm and started your own business? What solutions do you need to run your business? Where do you even start?

It can be extremely overwhelming and leave you feeling paralyzed. Trust me when I say that Bridget and I have been there. But Equita is not just about us; it is about creating a community of women to support one another and build successful businesses.

It’s about creating a community that inspires you to say, ‘This is exactly where I am supposed to be.’

Having a network of women to rely on helped me build my planning firm — it gave me the confidence to clearly outline how I wanted to work, and which clients I wanted to serve. When I collaborate with other women advisors, I am able to offer my clients the planning and service solutions that they would expect from a much larger firm — and I feel happier and more fulfilled, knowing I am supported by a community that has so much to offer.

If you are thinking about the next step in your career, and want to build a thriving financial planning business, we would love to start the conversation.

Overcoming the Fear of Starting an Independent Advisory Firm

With October being Women’s Small Business Month (WSBM), we couldn’t help but feel inspired by these stats:

  • An average of 1,821 new women-owned businesses opened every day in 2018.
  • Women-owned businesses grew in number by 58% over the last 10 years — a full five times faster than the average growth rate in the U.S.
  • Globally, 2018 continued a decade-long trend of narrowing the gap between male and female entrepreneurs — an improvement of a whopping 36% over the last 10 years.
  • Women of color opened 78% of new women-owned businesses.
  • After a banner 2018, women of color now make up 47% of all female founders.
  • In total, there are more than 5.8 million businesses owned by women of color. They employ 2.23 million people and yield $386.6 billion in revenue.

As USA Today columnist Rhonda Abrams writes in this article, “Women business owners will save America.”

Yet, despite these encouraging statistics, many women are still hesitant to start their own companies.

Over the years, we have heard so many female financial planners say how they’d like to start their own firm, only to qualify that statement with, “But I could never do it.” And when we ask them what’s holding them back, it always boils down to one thing: fear. The fear of the unknown, the fear of failure, the fear of being judged, the fear of not being taken seriously…

These fears are warranted, but as two entrepreneurs who are still standing after founding our own companies, we’d like to say that it’s worth it, and you can do it. Forbes listed four great ways on how to handle this well-justified fear:

1. Accept that it’s okay to have a reasonable amount of fear.

Bear with us for a second. It may seem nonsensical, but fear — fear of failure, the fear of irrelevance, or the fear of simply not fulfilling your dreams — is an important motivator. In the words of Liz Elting, a prominent entrepreneur, business leader, and philanthropist: “These are healthy fears that encourage both responsibility and risk-taking, keeping you perpetually on your toes instead of getting complacent or resting on your laurels.” The right kind and amount of fear can inspire you to find new opportunities, seek out new strategies, and keep striving for more.

2. Know what to expect.

Yes, you’ve heard those Cinderella stories of young businesses that transform into overnight successes. But the reality is that most successful firms take time to grow. Having a clear and realistic idea of what your first five years will look like will help you be more efficient and productive, and be more satisfied with the amount of work you accomplish. Having a realistic vision will also help you avoid burnout, which can be the biggest barrier to growth for new entrepreneurs.

3. Set goals for today and tomorrow.

Establish daily, weekly, monthly, and yearly goals for your business and give yourself tangible, achievable steps. There are a wide variety of goal-setting frameworks that can help you with this exercise; Elting recommends the SMART Goals framework, which ensures your goals conform to a rigorous set of criteria (Smart, Measurable, Attainable, Relevant, and Timely). Don’t fall into the trap of letting your future dreams and ambitions drive your decisions without any sense of balance or a path to making your vision a reality.

4. Find your tribe.

You can avoid or manage stress overload by making sure you have a network of colleagues, centers of influence (COIs), friends, and family you can connect with and turn to when the going gets tough (and when things are going well!).

Equita provides a supportive network for female financial planners.

The conversations that we have had with smart, ambitious, yet (rightfully so) cautious businesswomen are part of the reason why we founded Equita Financial Network.

We went through the same challenges and faced the same doubts. But we knew the positives — being our own boss, having a flexible schedule, pursuing our passion, having more control over our future career, and charging what we’re worth (the top five reasons women start their own business) — outweighed the fears.

We founded Equita Financial Network in 2018 because we wanted to create a supportive network for female financial advisors so they could get the outsourced resources, framework, and connections needed to branch out on their own.

If you’re interested in joining our network, contact us today.

“The Western Woman Will Change the World”: Harnessing Our Collective Power to Ignite Change

The Dalai Lama, in all of his great wisdom, once proclaimed that, “The western woman is going to change the world.”

As women, there is such tremendous strength in our ability to collaborate, and in our empathy, compassion, drive, and intelligence. But moving the needle on this change requires more than just talking about it — it requires action. I’d like to share my story behind launching Equita Financial Network with my fellow co-founder, Katie Burke, and how we hope it can truly make a difference to women-led planning firms across the country (and to the many clients these planners serve).

Bridget’s Story

Several years ago, I launched WealthChoice, a financial life planning firm for women executives and their families. I should start by saying that I never intended on starting my own firm when I entered the financial planning industry.

But I was tired of the many years I spent working countless hours for a traditional RIA every week. I was tired of getting paid a fraction of what male planners were being paid at the firm and hearing from other firms that I was “too old” to consider a lateral move. I was tired of being told I was too ambitious by my boss, or that my efforts to bring women together were a waste of time. All of these feelings converged and, with unbelievable anxiety and stress, I launched my own financial planning firm in 2016, guided by a vision and passion and my clients’ trust.

This is where Equita comes in.

In order to provide the highest level of guidance to my clients, my firm, WealthChoice, needs the best business resources. As a small, woman-led business, I found it easier to outsource these resources rather than curate them myself, mostly for fear of missing key pieces or making mistakes. I also wanted to have more time to focus on client service, which was possible by outsourcing many business resources.

As financial planners, our role is to help women, who are working so very hard, live life on their terms. Financial planning is an absolute passion of mine, but so is having my own firm. We are intentional in who we serve, and how we serve our clients. My firm is an extension of myself, and it is a personal passion. It brings me tremendous fulfillment. But as my firm grew, it also caused me to step back to see how we could structure our business better so that we could do more of what we do best: serve our clients.

The Power of Collaboration

In the course of business, I met and collaborated with another financial planner on some client cases to great success: Katie Burke, President of Method Financial Planning. Together, we realized the great power that came with collaborating in our respective businesses. Clients benefit, we benefit. Katie and I started to share best practices in business and planning on a more frequent basis. We saw terrific results and knew that other women could benefit from the same type of relationship.

So, we started to brainstorm: What would allow us to become even better planners? How could we make that available for other independent, women-led planning firms?

We wanted solutions that would allow us to spend more time on what is most important to our firms — and that is great financial planning solutions for our clients. We both realized that by having outstanding business resources behind us, we would be capable of doing better work and running our businesses more efficiently. We could have more time and resources to grow our businesses intentionally. We could streamline the operational tasks that come with running our businesses, but often bog us down on the road to growth. And most importantly, we envisioned a platform for collaboration, for sharing curated resources, for succession planning, and for helping other women led firms be successful. To do this, we needed to create a suite of the best industry resources, which we spent the next seven months assembling.

Equita’s first two member firms were WealthChoice and Method Financial Planning — and since then, we have welcomed other women-led firms into our community, and look forward to bringing even more into the fold over the coming months.

We’re on a mission to make a difference to clients and women business owners on a scale we have not yet seen in our industry.

There is power in connecting smart, driven, like-minded women in business. Together, we will change the future for our clients, and for the female financial planners who make real, positive change in their lives every day.

Study Shows Women Financial Advisors Are Much Happier at Solo Practices Rather than Large Firms — Why Is This?

We all know that the percentage of women entering finance is dismal: The CFP Board reported that, for the years 2017, 2015, and 2013, the number of women with Certified Financial Planner™ (CFP®) certification was stagnant at about 23 percent.

But the recent paper “Success and satisfaction of women in financial planning,” published in the academic research journal Financial Planning Review, sought to find out how women currently in the industry feel.

“Is financial planning an attractive profession for the women who are already in it? Do female financial planners feel successful and satisfied in their profession?” the authors Jim Pasztor, CFP®, Aman Sunder, and Rebecca Henderson asked.

After surveying 224 experienced, professional financial planners on their feelings of satisfaction and success, the authors came to a conclusion that we also have found true from personal experience:

“The women in our sample were equivalent or better than men with regard to education, experience, personality (the Big Five personality traits), and CFP® certification. However, we found that professional career satisfaction was surprisingly higher for women if they worked for a solo practice rather than for a large firm where they felt significantly more successful.”

Why Are Women So Much Happier at Solo Practices?

Why is this? What is offered at a solo firm that isn’t available at a big firm? The authors concluded, “The findings of this study support our hypothesis that women might be countering the lack of objective success at the large firms with subjective components of success at smaller firms.”

In other words, because women are not getting a higher salary or promotions (extrinsic components of career success) at bigger firms, they are finding personal happiness and growth (intrinsic components of success) at small firms.

One of the reasons women launch solo firms is to get paid what they are worth. Equita co-founder Bridget Grimes launched her firm, WealthChoice, partially because of the pay issue. She knew she wasn’t getting paid what male financial planners were, even though she had advocated for herself. In the end, she knew the only way to fix that was to launch her own firm and pay herself what she was worth.

While the study may have indicated that the only reasons women prefer to be solo is to find personal happiness and growth, it’s important to note that a very large — and important — reason why women take this path is the pay disparity issue in our industry, which is a non-issue when you pay yourself.

Why Do Women Enter the Financial Planning Profession in the First Place?

The authors of the Financial Planning Review study said, “Women in our sample became financial planners primarily because they want to help people, enjoy being in the profession, want to grow professionally, and want the opportunity to work independently. Our qualitative analysis also shows that more women than men are drawn to financial planning because they wanted to be independent, and they were dissatisfied with the corporate environment.”

This study further confirmed what Bridget and I (Katie Burke) discovered by breaking away from large firms and starting our own firms (I founded Method Financial Planning in Pennsylvania and Bridget founded WealthChoice in California): that starting your own firm is worth it, both professionally and personally. And that’s why we also founded Equita Financial Network — so we could help other women do the same.

Why Do Women Benefit When They Start Their Own Practices?

Instead of having to rely on a firm (that makes you miserable and pays you less than your male co-workers) to create a career path for you, you can forge your own path. Women represent one in four female planners — and together, we can create a culture that lifts each other up.

Bridget and I are passionate about helping women forge their own paths. By working with a community like Equita, you can get the support and tangible business resources you need to succeed, without relying on larger firms where you may be dealing with unfair biases, pay inequality, and other issues. Our focus is on empowering women to build the firms they want, with tools designed to help women succeed in business, and with a network of other like-minded women planners who are also business owners. While other networks also offer similar resources, many are still male-dominated, meaning they don’t have tools specific to helping women business owners succeed and don’t have a network of like-minded women to rely on for support.

As the study concluded, the industry needs to prioritize career development, professional recognition, and equal compensation for women financial planners if they want to fix the gender imbalance. Equita has been addressing this glaring problem by creating a platform for collaboration, sharing curated resources, and helping other women-led firms be successful. We encourage other industry associations and initiatives to also offer services that provide more guidance and clearly defined career paths for women.

Take the Fear Out of Starting Your Own Path

Bridget and I have been hearing from women how afraid they are of launching their own firm. This fear factor means they tend to make lateral moves, or just leave the industry altogether. But, because Bridget and I have both been through this ourselves, we created a process that helps take the fear out, and helps firms grow and be successful.

If you’d like to be part of a community of women financial professionals who are passionate about supporting each other in this industry, contact us today. It’s time to take the fear out of starting our own paths and controlling our own narrative.

How to Reduce the Mental Load That Women Carry

In the 2017 viral comic, “The Mental Load: A Feminist Comic,” French illustrator Emma wrote, “When a man expects his partner to ask him to do things, he’s viewing her as the manager of household chores. The problem is that planning and organizing things is already a full-time job. When we ask women to take on this task of organization and at the same time to execute a large portion, in the end it represents 75% of the work.”

Inspired by this relatable comic, Boston Consulting Group (BCG) recently looked into this problem within their own company by surveying 6,500 employees in 14 countries across industries. They found that women often handle time sensitive, daily tasks — like leaving work on time to make dinner for the family and also cleaning up afterward. “This is the daily grind, and women tend to shoulder the primary responsibility for it,” they wrote.

Men, on the other hand, take on the less frequent tasks, which are not as time sensitive and are more easily outsourced, such as finances and yard work. “These men get more time to focus on their careers — to stay late at the office, meet colleagues for drinks or dinner after work, take on stretch assignments, or travel for business — and more time to decompress from the workday.”

BCG gave recommendations on how individuals and companies can fix this problem. “If companies are serious about getting more women into the ranks of leadership,” they said, “they need to address the burden of domestic responsibility and its contribution to the mental load that women carry.”

So, what can companies do?

1. Introduce More Flexible Work Arrangements

This can include allowing remote work or a shift in working hours. Companies can also be more flexible about needs that will inevitably come up, like employees having to leave work early for their child’s concert or their doctor’s appointment.

Thanks to the advent of technology, companies can also use tools like videoconferencing, virtual collaboration devices, telehealth services for parents with sick children, and online networks for employees to share advice about the challenges they face.

2. Place Emphasis on Dual-Career Couples and Promote Role Models

To get rid of the stigma associated with greater participation in domestic and childcare duties, men need to actively take advantage of flexible work programs and share real-life examples and stories about how they balance the mental load at home. Paternity leave is a great example, the BCG authors note.

3. Give More Support to All Working Parents

Companies can boost support by creating a parents’ network for both moms and dads, or offering onsite day care, backup childcare with locations near work, babysitting referral services, eldercare support, financial planners, and wellness providers.

In addition, companies can also go the extra mile to ease the mental load by providing online resources that vet and list popular outsourcing options — housecleaning, laundry, grocery delivery, and personal assistants — and provide discounted corporate rates for those services.

4. Reframe the Public Conversation

Companies can tailor their advertising and consumer messaging to remove problematic, outdated stereotypes. For example, the United Nations launched the Unstereotype Alliance to eradicate all harmful gender-based stereotypes from advertising, such as commercials that show women doing all the housework.

Not only is this helpful for breaking stereotypes, but it’s also good for business. In India, Procter & Gamble launched an ad campaign for its laundry detergent brand Ariel Matic, encouraging dads to help with laundry. The ads were a runaway success, generating a 42% boost in brand awareness and $12.3 million in “earned media coverage” and social media engagement.

Another example: Italian appliance manufacturer Indesit launched a 2017 campaign targeted at encouraging men to help with household chores. In its first three weeks, the campaign brought in more than 30 million views.

Katie Burke and I (Bridget Grimes) both founded our own financial advisory companies, and also co-founded Equita Financial Network together, because we firsthand experienced — and still experience — this mental load. Whether it’s having to go home early from work because your babysitter canceled or having to take an emergency personal call at work, women in finance should not be reprimanded for having to prioritize family.

As the BCG authors note, “If you ask working women with families why they step off the leadership track, it’s often not just because of what happens at the office. Rather, it’s because of the combined effect of their daytime job together with their second job of managing the incessant responsibilities of household and family care: what needs to be done, who needs to be where, how to make it all happen at once.” It’s time for this to change.

To learn more about our network of female financial advisors and our career-building opportunities and events, contact us today.

The Truth About the Pay Gap Between Male and Female Financial Advisors

Do men and women advisors get paid equally for doing the same work?

The working paper, “Examining the Gender Pay Gap Among Financial Professionals: A Blinder-Oaxaca Decomposition,” mentioned in a recent FA magazine article, argues that yes, women get equal pay for equal work.

But we’d like to say that, no, that’s not the case — and based on our personal experiences as women in the industry, we assert that the findings in the study are absolutely incorrect.

“Explainable” reasons

Derek T. Tharp, one of the study’s authors, says that “unequal pay for equal work” is not a major contributor to the gender pay gap among financial planners.

Instead, the study points to “explainable” reasons for the gender pay gap, saying 91 percent is explainable and only 1.8 percent is not.

“Explainable” reasons include job role, experience, team structure, hours worked, revenue produced, professional designation status, marital status, and psychological factors such as degree of motivation by income potential, performance pay, work-life balance, and stable pay.

While this study provides an interesting look at the gender pay gap, reducing the issue to “explainable” reasons is missing the point.

“Statistically significant factors related to income”

The study says that the “statistically significant factors related to income” were experience, role, team structure, work hours, revenue, and psychological motivators.

“Having 20 to 30 years of experience was positive. Being an associate advisor or an executive (both compared with a lead advisor) was a negative. Working in an ensemble firm, when compared to working as a solo advisor with support, was positively associated with income. Higher work hours and higher revenue also led to more income. Being less motivated by work-life balance also led to more income.”

How can you have “20 to 30 years of experience” when there isn’t a solid career re-entry program in place for mothers? How can you be “less motivated by work-life balance” when you’re the one expected to take care of the kids? How can you expect to work more hours and have higher income when you have to manage children, aging parents, and career with an inflexible work culture?

And for the many of us who did work the extra hours at the expense of giving up quality family time, we still face gender discrimination: we’re drastically underpaid compared to our male peers.

The study absolutely misses the point. If women financial planners want to be compensated fairly, they need roles that allow them the flexibility to manage life and career, they need to be paid what they are worth (it’s not happening), and they need to have the female leaders/mentors to help them succeed, which is NOT happening at the traditional male-led firms.

Career path “choice”

The study says men often choose more “variable-compensation-based paths,” while women choose “stable-income/salary-based paths.”

And because women don’t take “variable-compensation-based paths,” that’s why they have unequal pay later down the line. As the study puts it: “The difference in compensation of men and women in the later years may be more a function of that choice about compensation path than unequal pay for genders that choose the same type/path.”

But is this “compensation path” that women end up on — the path to less income — really a choice?

Women advisors are expected to take the stable, salary-based path. The title of this Newsweek article, “Women aren’t risk-averse — society teaches them to be that way, study says,” sums it up perfectly. In our society, women are often told to be risk-averse, while men are told to be daring.

The Newsweek article concludes, “Exploring risk aversion could provide clues as to why men and women sometimes opt for different careers, and why women suffer from a gender pay gap, the authors wrote.”

Yet in the study referenced in FA magazine, one of the authors says, “It’s not clear why men appear somewhat more likely to choose one path and women another, and why men tend to have more years of experience building their client base.”

It’s pretty clear why.

Aspiring women financial advisors

The authors say that this news — that women and men are paid equally for equal work — should be a relief to women wanting to become financial advisors.

“Speaking only for myself, I do hope that these findings may be encouraging to women who may have been discouraged from pursuing a career in financial planning due to the large gender pay gap among financial advisors commonly referenced in the media,” Tharp said. “I can certainly understand why anyone would feel discouraged from entering a profession if they felt that they would not receive equal pay for equal work.”

Another author of the study, Katherine S. Mielitz, also echoed these sentiments. “I was very excited when I first read through our preliminary results. The idea that a gender pay gap does not appear to be a result of unequal pay for equal work is very encouraging. Women are very important to the growth and sustainment of our field. That equal pay for equal work seems to be available should be one of many things that encourages women to seek out this profession.”

But this study’s clinical view of the gender pay gap isn’t something to celebrate, and it isn’t a way to encourage more women to enter the industry. There are still deeper issues our industry needs to address — from the nonexistent recruitment efforts throughout the school years, limited mentorship and sponsorship opportunities, women being excluded from networking opportunities, to the lack of women in leadership roles in finance.

Equita Financial Network

Financial advisors are not robots. Yes, we have careers — but we also have lives, family, emotions, unexpected changes, and everything else.

Both Bridget Grimes and I (Katie Burke) know that the gender pay gap issue can’t be dismissed because of “explainable” reasons,” “statistically significant factors related to income,” and “compensation paths.” It is why we have dedicated our professional lives to empowering female financial planners to create the careers they have always envisioned for themselves — careers in which they feel valued and are appropriately compensated for their vast contributions.

If you want to become an Equita member firm and join a supportive and experienced network of women financial advisors, reach out to us today.