It's a man's world, it is often said of Wall Street (OK, not just Wall Street). For sure, giant brokerage firms like Merrill Lynch and Morgan Stanley began as old boys networks, built as they were upon a male-oriented sales culture dominated by chest-thumping eat-what-you-kill bravado. But the business has changed dramatically, particularly in the past decade, as has the face of wealth in the U.S. and around the globe.
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“When I started in the business in 1983, that's when everyone wore the man-looking suits,” says Lisa Cregan, managing director and complex manager of MSSB's Post Oak complex in Houston, who founded the firm's first Women's Advisory Council this year. “We all tried to look as much like a man as we could so no one would notice we were women. Now there is a force where people appreciate us for the differences we bring to the table, and that's actually a benefit.”
Today, the big brokerage firms are all beating the drum to recruit more women they tell us, and building internal support systems to help them become successful financial advisors. It's not just a matter of promoting diversity in the work force. Turns out it may also make good business sense. Women are controlling a rapidly growing share of global wealth, and data show that at least some of those women prefer female financial advisors. Women are also traditionally thought to excel at the kinds of relationship building skills required in the new wealth management order.
In 2009, women controlled an estimated 27 percent, or about $20 trillion, of the world's wealth, and that figure is expected to rise an average 8 percent annually through 2014, according to a Boston Consulting Group study from July 2010. That same study suggests that 11 percent of female investors around the globe prefer that a woman manage their finances, though another 85 percent are indifferent about gender when it comes to financial advisors. Meanwhile, research conducted by Wells Fargo Advisors in 2011 suggests that after four years in the business, women trainees often produce more revenues than their male counterparts, and tend to sell a wider range of products and business lines to clients. Whether or not that advantage remains over time, it is at least clear that women can be highly productive in the business. Just look at the list of the top women FAs at the wirehouse firms. The No. 1 woman on that list manages just $8.5 billion. That's well below the $28 billion managed by the man who lead our annual Top 100 wirehouse advisors in America list in 2011, but $8.5 billion is still a nice pile of money. (One manager explains that men still top the charts because they've simply been in the business longer.) In any case, right now recruiting pressures are intense, which makes talented women especially appealing.
After all, it's a talent pool that is pretty much untapped. There just aren't a whole lot of ladies in the house. The numbers of women in the industry average around 14 percent across all channels, according to Cerulli Associates data from 2011, which is based on 1,250 survey responses. The wirehouses have a bit more to prove to women recruits than firms in some of the other channels: While close to 21 percent of FAs at dually registered firms and 24 percent of FAs at banks are women, just 15 percent of wirehouse FAs are, the Cerulli data show.
“It's such a great career for women. You'll never wonder if you're being paid equally, because you're all paid based on results. Also you can really on-ramp and off-ramp your work and still keep working,” says Morgan Stanley's Cregan. In January of 2011, she founded the firm's Women's Advisory Council, a firm-wide prototype that is aimed at attracting not only more women FAs, but also women clients. “Most people think we sit around and buy and sell stocks; they don't realize the role has changed so much.”
To get women advisors as well as investors in the door, the big wirehouse firms have begun building internal women's forums and councils like the one at Morgan Stanley and organizing events that bring professional and like-minded women together, both for their own financial advisors and for potential recruits.
Cregan's council received a budget from Morgan Stanley of $25,000 in 2011 to support local events and organizations that both help the women advisors on the council network and promote Morgan Stanley's brand. For example, two women recently began working with the Women's Resources Center in Houston, which offers financial education to underprivileged women. Morgan Stanley also launched a well-designed blog for women financial advisors in 2009 called the Women Financial Advisors Forum which showcases the career trajectories of some of the firm's more successful women.
Both Merrill and Morgan Stanley have partnered with a two-year old group called irelaunch, which helps women who have taken time off of work to raise kids or for medical reasons to get back into the work force. Merrill has been the lead sponsor at three of these conferences, each of which had 200 attendees. Merrill says it has also been very focused on attracting women to its training program and its practice management development program, and it has an internal Women's Exchange, with chapters throughout the country, which promotes networking and philanthropic projects.
Wells Fargo, meanwhile, kicked off its first annual Women's Summit in 2007 to bring together the firm's top women financial advisors for networking and to share best practices. That same year, it held its first annual Women's Due Diligence meeting, where it invites experienced advisors from other firms to learn more about what the firm does to support women already in the business, such as monthly productivity calls that are geared towards women advisors and trainees, roundtable discussions, and an annual women's manager summit.
“What I see from companies I consult with is that there are certainly a lot more women's initiatives where they're taking time to have a segregated experience for women to support each other as they move up the ladder,” says Kathleen Burns Kingsbury, author of the forthcoming Women and Wealth to be published by McGraw Hill in 2012 and principal at consulting and coaching firm KBK Wealth Connection. “There are also some great male leaders and advisors out there who know that a woman can really excel, especially at financial planning and relationship building.”
