If the financial services industry is serious about engaging more women as advisors, there’s a lot more work to be done. Not only are there serious misconceptions and barriers still in place, a new study by the CFP Board reports less than a third of women feel that firms’ culture make them feel welcome and respected.
No one disputes the financial services is a male-dominated field, with the Bureau of Labor Statistics reporting 30 percent of financial advisors are women. While that statistic may be high, it still puts women into the minority. A fact that, in recent years, the industry and individual firms have been attempting to re-balance.
Yet the perception remains that women are not welcome in this industry, according to a new study by the CFP Board. For many women, the career is not “top of mind,” says the CFP Board. And for those who are aware of it, many women feel that financial planning is about investment and mathematical expertise, rather than about strong communication skills and relationship building.
The CFP Board also found that 43 percent of advisors feel men are favored over women when it comes to hiring a financial planner, even when firms acknowledge that women have the requisite skills. Additionally, 41 percent of advisors said men were more likely to have the characteristics of a successful financial advisor, compared to the 7 percent who said women were more likely.
Once women are hired, there's a pay gap to contend with as well. Women are paid $32,000 less than equivalent male advisors and they are less likely to own their practice. Women are also more likely to be salaried (32 percent of women v. 13 percent of men).
“We need the talents and skills of young women to advance the financial planning profession and to ensure the longevity of our industry,” Tom Nally, president of TD Ameritrade Institutional, said in a statement Tuesday.
To help attract more women, the CFP Board developed several recommendations, including that firms adopt standardized transparent compensation structures and standardized job descriptions. Based on the research findings, the Board believes these steps will help eliminate unintentional gender bias and pay discrepancies.