Seen and Heard: Get the Word Out to Get Women in the Industry

"Of course there aren't enough women," Janet Stanzak, 2014 FPA president, said. "Twenty-five percent of our members are women, and it's the same thing for the industry—grossly underrepresented. Diversity in general is grossly underrepresented. It's the 50ish-year-old male who is the typical planner."

Liz Davidson, founder and CEO of financial wellness firm Financial Finesse, agreed. "I think the last stat that came from the CFP Board was 23% of CFPs are women," she said, even though women are getting college degrees at a faster rate than men. (Provisional data released by the Institute of Education Sciences National Center for Education Statistics found 58% of degrees conferred at four-year institutions in 2013 went for women, and there were more women enrolled in both undergraduate and graduate programs.) "We know it's not an education issue," Davidson said. "I think it's probably a legacy issue. This is how it's been for so long so women may not look at it as a career option."

Angie Herbers agreed that there were not enough women in the industry and added that where planning programs are placed in universities might be a problem.

"To attract women depends on where the financial planning program is placed in the university," the founder and senior consultant of Angie Herbers Inc. said. "If it's in the college of business, it tends to attract men; my program [at Kansas State University, or KSU,] was in the school of human services."

She continued, "The courses of study that tend to attract more women—nutrition, fashion, psychology, nursing—all of them are in the college of human services. A student might start [studying] marriage and family therapy, but would find financial planning. What I saw at KSU is that everybody gets confused between corporate finance and personal finance. Corporate finance is in the business school. I know a lot of women who get general business degrees who are attracted to human resources or marketing; in the college of human services, they're attracted to financial planning as a second [course of study]."

Kristen Luke, president and CEO of Wealth Management Marketing, which is merging with Angie Herbers Inc., added that the tendency to view financial planning as a technical career without emphasizing the opportunity to work with people is also keeping women from signing up.

"Women go through a financial program in college and have specific ideas [on what being an advisor will be like], and then they're cold calling; they're not using the skills they learned in college," she said.

Kim Dellarocca agreed that the industry needs more women, but "maybe not for the reasons some people would think." The managing director for Pershing told IA, "Organizations that are more diverse are more innovative and successful—you get the best minds. If you're managing money, for example, it's good that not everybody agrees with you. So beyond quotas or other reasons, diverse companies are better companies."

Dellarocca added that familiarity doesn't make the old way of doing business right. "The way out isn't to hunker down, but to try different things, to innovate. Women make compelling and thoughtful leaders, but in a different way. They want to know what people want, and they tend to manage more from the bottom up," she said.

Jocelyn Wright, an advisor who now holds the endowed State Farm Chair for Women, part of The State Farm Center for Women & Financial Services at the American College, said the industry "has to be creative in getting women into the business." The founder and managing partner of The Ascension Group advisory firm in Philadelphia noted that "younger, newer advisors create teams" and "you can be successful in leveraging" those partnerships, where "one plus one equals three or more."

"We have to look at creative ways" to get more women into the industry. "I work with an independent broker-dealer [H. Beck] that helps older advisors partner with younger advisors. This is an opportunity, but a challenging one, because it makes good business sense to do so. The numbers indicate the need, but we need to do more in the way of education."

Wright added, "As women become more comfortable with their finances," they can be asked "'Have you ever thought of this as a career opportunity?' We need a bottom-up approach."

She noted, "I've been in the business for over 12 years. I was interested from a very young age, finished graduate school then worked for a larger company, getting experience on someone else's dime. For younger people, for women, it's a great opportunity.

"Retention is a big issue. We get them in, but because of a lack of mentoring, they'll fall off, especially in a commission business. Fortunately I was in a position where it was just myself—if I had a husband or children it would have been different—but it took time to build a book. Twelve years in, I still struggle—it's a constant building and tweaking. If we can take some of the angst out of that 'How do I make money?' we'd attract more women."

Since 2013, Cambridge Investment Research has tracked how many female advisors with the firm were earning over $200,000, according to Amy Webber, president of the broker-dealer. There's "no magic to the number," she said, but measuring women's success in the industry requires a look not just at how many female advisors there are, but "whether or not they are growing and being successful and satisfied in their careers."

In 2013, just 1% of female advisors were making more than $200,000—it's now at 3.5%, Webber said—but she argues that such a relatively low number wasn't necessarily because they couldn't achieve more. Rather, it was because they chose to "because they were only working part time or they had flexible hours or they only wanted to serve 50 clients while they were raising their children. This career certainly offers the ability, if your personal situation allows for it, to be highly flexible and move in and out of the phases so you can prioritize raising a family should that be your option."

Not only does the industry not have enough women, it doesn't have enough people to sustain it, according to Carrie Coghill, president and CEO of Coghill Investment Strategies. The industry in general is struggling to attract talent, she said, and to attract women in particular, it needs a culture shift.

"The biggest challenge that we have, No. 1 in attracting women but also in attracting that next generation, is that this is a business that is used to that 9-to-5 type of environment," Coghill said.

There's a perception of the industry that planners are stuck behind a desk all day making cold calls, she said. Part of the problem is that "the wealth management industry wasn't an industry that stood on its own; it morphed itself out of the brokerage industry."

She continued, "That's something that I don't think has been appealing to women. Women haven't considered this industry as a career because the perception is that it's very demanding—which it is—but it's more the lack of flexibility, which has changed. We just need to get that word out."

Get the Word Out

Many of our interviewees agreed that increasing awareness of what the financial planning profession really is and what it offers women is a big part of improving the level of diversity in financial planning firms.

"We are working very hard to ensure that we have a presence with students going through our programs and give them insight into the profession and why the industry really lends itself to women in this career," Stanzak of FPA said. "With only 25% to 26% of women in the profession, there aren't as many role models and mentors."

Cambridge has been working on recruiting female advisors for about four years, according to the firm's president, Webber. "We've had a lot of success, but like anything it's a slow process. You're changing perceptions and behaviors, and I think that's one of the No. 1 limitations in the industry," she said.

Webber agreed that making women more aware of the opportunities the industry could provide them is an important step, and one on which the industry is making slow progress. "I started when I was 18 years old, and that was 26 years ago, and it was far harder to be a woman in our industry then than it is now. […] I suspect that the momentum is going to keep going, we just need more firms like ours to embrace the future of the female advisors."

There are four overarching problems keeping women out of the profession, according to Marilyn Mohrman-Gillis, managing director of public policy for the CFP Board of Standards. First is the lack of awareness of financial planning as a "viable/good profession for women; women harbor misperceptions about the profession itself; third, there is a reluctance for women to take a risk versus men; and fourth, there is a very strong finding of gender discrimination and bias within the financial planning profession and financial services at large."

To counter those misperceptions, successful women need to be more visible to women and girls who might be interested in pursuing financial planning as a career. Mohrman-Gillis suggested reaching out to "confidence-building clubs like the Girl Scouts" or "guidance counselors and placement officers at high schools and colleges."

Regarding the last problem—gender discrimination and bias within the industry at large—Mohrman-Gillis referred to a recent survey conducted by the CFP Board and its Women's Initiative (WIN), which found 41% of respondents said men were more likely to have the characteristics of a successful financial planner. However, when asked about the specific qualifications, respondents rated women higher than men. "For instance, women were deemed to be more ethical than men and were said to know more about financial planning. Yet the firm hiring deems men to be more successful." The findings, she said, "summarize and really shine a spotlight on that overall bias within firms."

Interestingly, the CFP Board's survey also found male and female respondents agreeing that office cultures were typically more welcoming to men, but both overstated how welcoming the culture was to the other gender. Sixty percent of women said the office culture was welcoming to men, compared to 54% of men, Mohrman-Gillis said. Nearly half of men—48%—said the culture was welcoming to women, but just 29% of women agreed.

Davidson of Financial Finesse pointed to the old stereotype that girls are bad at math as another obstacle. "Whether it's a myth or it's the way math is taught, there's this stereotype that women aren't as good as men at numbers, and I think that leads women toward other professions," she said. However, she pointed out, the most important thing about financial planning is the end client. "There are all sorts of software to back into what is the right plan for that person. While numbers are necessary, they're only a tool." The skills required to reach that client are "listening skills, relationship skills, things that I think women are naturally very good at."

Just focusing on financial literacy at a younger age could go a long way toward attracting women to the profession, she added. Early financial education won't teach students the nuances of being a financial planner, but "there could be more light bulbs that go off [so people say,] 'This is a really cool thing. It's empowering and important for people to know, and I want to be part of this field.'"

"We could be doing a much better job of promoting all of the reasons why this industry is great for women," Coghill of Coghill Investments said. "My daughter is now 25, and I got divorced when she was 3. I'm so thankful for this industry because I've been able to create my own schedule. Yes, I work a lot, but in this industry, if you're in the right environment—and I've always been associated with an independent model, so I've not really had a firm telling me what to do—I've had the flexibility that when she was a teenager I could get home and be with her after school and then get back to work once she went to bed."