Life at the brokerages has gotten easier for female financial advisors, but there's still room for improvement.
Women hold a greater share of wealth in the U.S. than ever before: Of those in the wealthiest tier of the country — defined by the I.R.S. as individuals with assets of at least $1.5 million — 43 percent are women, according to an August, 2009 article in The New York Times, called “The Power of the Purse,” by Lisa Belkin. Meanwhile, affluent women are increasingly taking control of wealth management in their families, with 88 percent playing a high-to-moderate role in the management of family assets, according to a March 2009 study by Wilmington Trust.
But there seems to be a gap between who controls the country's wealth and who manages it. According to statistics from a 2006 Opinion Research Corp. survey, only 20 percent of all financial advisors nationwide are women. Meanwhile, the survey shows that among female consumers who do not currently have a financial advisor, but want one and have a gender preference, 75 percent would prefer a woman. For firms, the potential benefit of hiring more women as financial advisors is clear.
Today, most Wall Street wirehouse firms have programs to attract and keep female financial advisors, including networking groups, forums and websites. This is partly the result of various lawsuits filed for gender discrimination in recent years. But the firms say they are also aware that it makes fiscal sense to offer female advisors greater incentives to work for them. For example, in August, Morgan Stanley Smith Barney launched its “Women's Financial Advisors Forum,” which contains an interactive blog that highlights the careers and issues of current female advisors. The site also offers advice on areas such as “Networking,” “Work-Life Balance” and “Career Development,” to name a few.
For Martha and Suzanne, a long-tenured mother/daughter wirehouse team, the Morgan Stanley Smith Barney offerings were a big deal. The pair were looking for a new wirehouse to land at and became enamored with the firm's efforts to hire women and minorities as well as what they perceive as a firm-wide culture of supporting women.
But while the obstacles to getting ahead in the business for women have definitely diminished, there is still room for improvement. I recently met with “Gloria”, a long tenured female advisor who has worked for a large, multi-national private bank for the past five years. Because she does not work for a wirehouse, she gets a salary plus bonus rather than production-based pay, and she feels her payscale is not equal to that of her male colleagues. “I'm tired of working double time and getting paid half of what the men get paid,” she tells me. “I work harder than many of the men in my firm.” Gloria may be overstating her experience, but it would not be unusual if she were paid less for the same work. Even in the 10 highest paying occupations for women, they still under-earned men, on average, by about 20 percent in 2008, according to U.S. Bureau of Labor statistics.
“It is a lot easier today than it once was for women but I still face many more hurdles than guys in my firm,” says Sally, a New York City financial advisor who has been one of the top producers at her firm for the last several years. “The difference today is that management is much more open and transparent concerning these types of issues and I have somewhere to go if there is an issue.” She adds, “For the most part it is merit based, non-political and totally flexible.”
There is still much firms can do to promote female advisors to join and stay with their firms. Having women advisors actively involved in the recruitment process is one way to showcase a firm's commitment to gender equality in hiring. Providing incentives for female sales assistants to become licensed advisors is another. But the programs already in place are a step in the right direction.
Mindy Diamond founded Chester, N.J.-based Diamond Consultants, which specializes in retail brokerage and banking recruiting. www.diamondrecruiter.com