These days, our industry can’t get enough of women. “Women’s initiatives” have become the industry’s hot dot, with many financial services firms identifying females as a growing “niche market,” hosting “women’s symposiums,” creating ad campaigns aimed at women, and especially trying to boost recruiting.
Despite all the hype, the needle hasn’t moved in terms of the number of women in the industry. According to recent data from Cerulli Associates, females account for only 7.9 percent of all advisors in 2012, compared to 92.1 percent male. Women make up a slightly larger portion of the RIA channel, at 11.6 percent, versus 88.4 percent male in the channel.
In assembling our Top 25 Women RIAs list, we were shocked to see such a low number of women-owned firms. To land on the list, women advisors were required to directly own at least 25 percent of the firm. After trolling through ADVs of 400 of the top RIAs, we barely found 25 firms that fit the bill. The ownership ranks of the other 375 were dominated by Johns, Peters, and Gregs. Where are all the women?
This year’s list looks different from 2011 because we changed the criteria. Women were required to have at least some individual clients for whom they do financial planning, and could have no more than 50 percent institutional clients. Also, none of the RIAs on our list operates a broker/dealer, a bank, or is affiliated with an investment company.
Historically, the stereotypical model of an advisor—the “eat what you kill” mentality—has not attracted women.
“It’s not perceived as an attractive career path, for all the same reasons that women aren’t getting good advice; they’re just intimidated by it somehow,” says Eileen O’Connor, vice president of wealth management at McLean Asset Management, a wealth management firm.
O’Connor had a female intern over the summer, a finance major who decided instead to go into marketing. “She said, ‘I really like my financial classes, but it just seems so a boy’s club, dog-eat-dog world, very competitive and cut-throat.’ I was so shocked to see that perception persist.”
In a recent op-ed, Sallie Krawcheck, former head of wealth management at Bank of America Merrill Lynch, made the case for more women on Wall Street. When it comes to women executives in financial services, the ranks are actually diminishing, Krawcheck says.
“The representation of women at the top levels of financial services has declined; today, one can count on one hand the number of women running operating businesses who report directly to the chief executives of the largest U.S. banks,” Krawcheck wrote.
But we are making some progress—albeit slowly. And things could change over time, as firms put greater emphasis on financial planning and relationship management, over the “eat what you kill” mentality. These are things that women (and RIAs) are naturally oriented towards.
“The smaller firm—more planning focused, more fiduciary focused, more relationship management focused—I think those are all stereotypically things that may appeal to a female audience, other than production and hunt-to-kill,” says Scott Smith, associate director with Cerulli.
“Given all the interest in this as a topic and the trends that are there, I think more and more and more firms are looking to hire women advisors. Whether that’s actually going to make an impact remains to be seen,” O’Connor says.
It takes time to turn an oil tanker.
- Diana Britton
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