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.