As conversations about gender equality have gained steam over the past year, much ink has been spilled on the topic of women in the financial services industry. Many of these think pieces have revealed what we, at Equita, have known for quite some time:
Women make excellent financial advisors.
In her recent New York Times op-ed, Ritholtz Wealth Management’s Blair duQuesnay cites research explaining that female investors are more likely to focus on their family’s financial goals rather than return performance — and moreover, women are less likely to engage in excessive trading and are skilled long-term investors.
All of these qualities should render women a natural fit for a career in providing personal financial advice. But, over the past decade, the number of women in the financial services industry has plateaued and remains below 20%.
Where’s the Disconnect?
It’s a simple question with multiple different answers, so let’s start with the first and most glaring fact: Women financial advisors make 59 cents to every $1 earned by male financial advisors. 59 cents. Unfortunately, meritocracy is a myth at financial services firms, as long-time women’s advocate Kathleen McQuiggan stated to Financial Planning Magazine when this data was first released.
The second answer is apparent in the makeup of the industry itself, as well as in the distinct lack of networking and mentorship opportunities available to female advisors — a topic we recently discussed on the blog. When you look at the media and popular culture, financial advisors are often depicted as older men sporting suits and briefcases, pointing at charts that are purposely complex to convey a sense of mystique — no women to be seen. And within the firms themselves, the barriers to entry still persist.
When combined, these forces not only deter women from the industry altogether; they also drive away existing, talented female advisors who are trying to climb the ladder. These advisors often go one of two directions: They either decide to pursue a different career path or break away to start their own financial planning venture.
Putting It All Together
Do either of these women sound familiar to you?
The first woman — let’s call her “Karen” — is a financial planner at a decent-sized firm. In a word, Karen is disenfranchised. Why? She doesn’t have a mentor she can rely on at her firm for advice about her own professional development and career growth — in fact, there are no female advisors she can relate to at all. Of the male advisors who work at her firm, Karen hasn’t found anyone who can advocate for her. Outside of work, she is stressed about balancing her job with her children and other family obligations. And to top it all off, Karen is underpaid relative to her male peers — and she knows it.
The second scenario is the female advisor who has broken away from her previous firms — but instead of leaving the industry altogether, she decides to start her own practice. Let’s call her “Dana.” Dana chose to run her own financial planning firm because she wanted to take more control over her financial future and long-term success — but running her own business has its challenges. Dana needs front- and back-office resources, which are expensive. She hasn’t been able to find a platform that addresses her needs at a manageable price point. Moreover, Dana is balancing business management with serving her clients, both extremely demanding feats. Essentially, Dana is a silo — she has no network to reach out to for support, for collaboration, or for simply sharing best practices.
If these stories sound realistic, it’s because they are.
These are the struggles both aspiring and established female advisors face. But we’re here to tell you that although these barriers exist, they should not block your path toward success in this industry.
At Equita, our top priority is break down those barriers and close the gap by providing all of the resources breakaway advisors need to run the fee-only financial planning firm they’ve always envisioned. Plus, the fee-only structure helps resolve the feelings of disenfranchisement we spoke of earlier. Many women are more interested in the relationship side of planning, which better aligns with the fee-only model and less with the sales and commission culture that often exists at large brokerage firms.
We’re committed to providing the collaborative network that we, as women, need to succeed in a male-dominated industry. From compliance and insurance, to portfolio management and planning software, our platform is turnkey, which makes it easier to run a firm that allows for work-life balance at an affordable price point.
If all female advisors — especially those like Karen and Dana, in our examples above — had the network and resources currently available to male advisors today, imagine what they could accomplish. Think about how our industry could change for the better if clients had the ability to receive financial advice that was rich with a wide range of experiences and perspectives.
Allowing female advisors to be paid what they are worth and earn what they are entitled to will help us retain more women in the financial services industry — and it’ll help us foster a well-rounded population of advisors that actually reflect the diverse clients they serve.
Want to learn more about the Equita platform? Contact us today.