According to Cerulli Associates, just 16 percent of today's advisors are women – less than 50,000 out of more than 300,000 nationwide.
At the same time, women control an increasing majority of U.S. personal wealth — $14 trillion, or 51 percent, as of 2015, and a projected $20 trillion by 2020, according to the Bank of Montreal's Wealth Institute.
All the while, the pool of advisors is shrinking. The consulting firm Moss Adams predicts that a shortfall of over 200,000 financial planners by 2022. What's more, Cerulli data shows the average advisor is age 59, 43 percent are over 55, and nearly one-third are age 55 to 64.
All in all, firms both large and small would do well to bring more women aboard — particularly those just entering the profession. As the national client pool grows younger and more diverse, so, too, should the body of advisors who serve them.
An evolving industry
"Historically, this has been a very male-dominated industry, and it hasn't always felt as welcoming," says Heather Hunt-Ruddy, head of client experience and growth at Wells Fargo Advisors. "I started in the late '80s, and my experiences then were very different from my experiences today. There are different opportunities now, and the industry is evolving."
Those opportunities include a host of new educational programs for both new grads and undergrads.
"I joined UBS right out of college and joined their graduate training program," says Elizabeth Sheehan, financial advisor with UBS Wealth Management. "At 22, I saw what a career in financial management would look like, and every three months I got to do something different."
Due to these and other opportunities, the industry is shifting – albeit slowly. For instance, women comprise 32 percent of the Financial Planning Association's NexGen, a community for members age 36 and younger, while they make up just 28 percent of the FPA as a whole. Twenty-eight percent of all new advisors are also female, according to Cerulli, a figure that certainly eclipses its older professional counterparts.
The advantages of diversity
There are a variety of benefits to bringing women into an otherwise male-dominated firm, not least of which is the ability to attract female clients.
"I began my practice in 1990, and I truly believe that having women on our staff has helped us track not only female clients, but men, as well," says Mischelle Copeland, Wells Fargo Advisors' first vice president of investments.
"I think there's always a certain percentage of women who want to do business with other women," agrees Hunt-Ruddy. "Women clients are attracted to people who listen well, communicate well and follow up well. That's not to say that men can't do those things, but I think some of those softer skills tend to be naturally inherent to women."
Gender isn't the only avenue for diversity, of course, and most firms can benefit just as much from a broader spectrum of ages, ethnicities and ways of thinking.
"I'm a firm believer that diversity and inclusion aren't just about doing the right thing," says Sheehan. "They're about hiring and promoting the best talent because it's in the best interest of our clients."
Younger advisors in particular can help firms appeal to multiple generations and secure the business of their current clients' heirs.
"My business partner has lots of clients in their 60s, 70s and 80s, and we have relationships with their grandkids," says Sheehan. "The 20-something doesn't want to talk to the older male, but I can explain things in way they can understand."
Overall, a gender- and age-diverse team will help your clients and business in the long term.
"Any time you've got lots of people in a room, you'll have a better outcome than when you have one type of person," says Hunt-Ruddy. "That goes for gender, as well as age, experience, ethnicity and more."
Advisor recruitment
When recruiting women to their ranks, firms should first look inward.
"There's a limited pool of qualified, experienced women to hire, and you have to be able to grow advisors," says Hunt-Ruddy.
