5 Myths That Stop Women From Becoming Advisors

Q&A September 18, 2023 at 05:06 PM

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Five stubbornly persistent myths have turned off women from becoming financial advisors, and Peggy Ruhlin, retired board chair and CEO, 2000-2019, of Budros, Ruhlin & Roe, is here to shoot down all of them.

In an interview with ThinkAdvisor, the first myth she shatters is, as she frames it: "To be really good at math is to excel in this field."

Rather, she argues, "If you can add, subtract, multiply and divide, you have all the math skills you need to be a financial advisor."

Ruhlin passionately wants to bring more women into the wealth management and financial planning field, and a book she has penned attests to that.

"Wealth is Women's Work: How Women Can Make a Long-term Impact with a Career in Wealth Management" (Advantage-2022) delivers an authentic picture of what being a financial advisor entails and the rewards therein.

Most of all, Ruhlin wants women and men alike to know that, as she says, "financial planning isn't a man's world anymore."

Ruhlin's first career was working as a successful CPA. She decided to switch to financial planning partly because "tax season was just soul-crushing," she says.

Even during the rest of the year, because of inflexible job demands, she had little free time and was unable to schedule family vacations.

She became a certified financial planner in 1986 and began offering financial planning as an add-on to her accounting services.

The following year she joined Columbus, Ohio-based Jim Budros in his planning practice that served high net worth clients.

Over the next 34 years, Ruhlin would rise to become CEO, then chair of the board of directors.

In the interview, she opines on what firms must do to attract more women to be advisors.

"To be their most successful, they have to have women on their team and women lending their voice to how the firm is run," she stresses.

Among other awards, Ruhlin has won the Foundation for Financial Planning's Alexandra Armstrong Award for Lifetime Achievement and was named to the Financial Times' FT 100 list of female financial advisors in 2014.

She retired from Budros, Ruhlin & Roe in 2019 (CI Financial acquired the firm, with $3.5 billion in assets under management, in 2021) and became a special advisor at DeVoe & Co., counseling RIA owners seeking to grow their firms.

ThinkAdvisor recently interviewed Ruhlin, who was speaking by phone from Columbus.

Shattering the widespread misconception, among women in particular, that financial planning is "boring," she maintains: "This job is all about working with people, not with abstract numerical constructs."

Here are highlights of our conversation.

THINKADVISOR: Why was it important for you to write this book?

PEGGY RUHLIN: When I got my CFP designation in 1986, I was told that only 25% of all CFPs in the nation were women. Today, that number is [23.6%, as of 2022].

So we've been going in the wrong direction for more than 30 years!

My goal is to bring more women into the wonderful profession of wealth management and financial planning.

In your book, you write of long-standing myths about financial planning careers that deter women from entering the industry. Let's start with this one: "To be really good at math is to excel in this field."

If you can add, subtract, multiply and divide, you have all the math skills you need to be a financial advisor.

Some people, particularly women, have it in their heads that this job is all about doing calculations, stock valuations and elaborate future value analyses — and all day you just sit in front of a computer and do math.

Yes, you have to have the basics. But for the most part, the computer does the math for you. You don't need to have had A's in calculus to succeed as a wealth manager or financial planner.

Another myth you bust about being an FA: "It's boring."

Once again, that's [the notion] that you sit at a computer all day or do math or research stocks. It's not that at all.

This job is all about working with people, not with abstract numerical constructs. This is about counseling people, helping them achieve goals — and you get a great payback from your clients when you help them.

Here's a big myth: "Financial planning is a man's field." Therefore, you want people to focus on the mantra, "Financial planning isn't a man's world anymore."

Yes. It was true before. It was very hard to break into the financial consulting, planning, wealth management world.

The only way a woman could go to work for a big brokerage house was as a sales assistant, typing letters and answering phones because they just wouldn't hire women [to be advisors].

Firms felt women didn't have the right personalities or the right skill sets. They weren't cutthroat enough, or whatever.

So then there's the myth of: "I don't have the right skills," which often "segues into 'I don't want to be a salesperson,'" you write.

There are certainly firms where your skills as a salesperson will be critical to your success, where you've got to sell life insurance policies, annuities, this or that product.

But the field is so much more open and wider now and emphasizes service versus sales.

It's not all about selling product anymore. There are certainly firms that sell product, and that's a large part of what they do.

But there's a whole other big segment of the profession that's there for counseling and helping people. And the whole fee-only part of our world doesn't sell product at all.

Of course, you still have to sell yourself to your prospective clients and sell them on the fact that your firm is best for them.

What about the myth, "CFPs only work with rich people"? You say that's "a destructive myth" because "it turns off a lot of younger potential employees."

[Numerous] younger people want to make the world a better place [such as] getting rid of the money divide that's divided the country into have's and have-not's.

Yes, many firms work with lots of wealthy clients. Some work with ultra-rich people. But there are also firms that work with Middle America and average Americans and middle-income people.

If you want to work with those that you classify as poor or lower income, there are all kinds of outlets for pro bono planning.

The Foundation for Financial Planning is now promoting that heavily — helping Americans who can't afford to go to a financial advisor — never can, never will.

Those people deserve help.

Why do female investors need women financial advisors?

People want to work with people who look like them and who are like them.

And I think a lot of women, maybe, have had bad experiences with male advisors. Maybe they were talked down to. With couples, maybe the advisors talked directly to the husband and ignored the wife.

I don't think things are that bad nowadays. Men are more aware of how they need to be respectful toward women clients.

What's another strong argument for needing more women advisors?

Older women, especially, are starting to inherit the family fortune, as their husbands die off.

Younger women want to be just as involved in finances as their husbands are, or involved for themselves, if unmarried.

When I see millennials and Gen Zs come in [to the office], 90% of the time, it's a 50%/50% deal: There isn't just one spouse who's calling the shots. They're in it together.

In order to serve those clients, you can't be a firm of all male advisors. You must have women on your team, and firm owners have come to realize that.

Wirehouses too?

Yes. I don't know to what extent, but definitely. They've made a very big effort, through campaigns, to attract more women to the field and to their firms.

What can the industry do specifically about the paucity of female FAs?

As a firm owner, you have to invest the money and the time. It's not something that's going to happen overnight. But you can nurture it.

For example, [at Budros, Ruhlin & Roe], when we couldn't get women to apply for summer intern positions, we started a scholarship that gave a monetary award for tuition but that also came with a paid summer internship at our firm.

So we started our home-grown crop of next-gen-women-advisors. The young woman who won the very first scholarship is now my financial advisor!

You write that "this industry is still dominated by men." Why does that need to change?

More than ever, women are in charge of the family finances, where that used to be a man's world.

Or else, they're in charge of their own finances and want to work with a woman or at least with a firm who has women managers and women financial planners on staff.

You say that now is "a great time" for a woman to become a financial advisor. Why now?

It's always a great time because people are desperate and looking for help. They need someone competent, honest and trustworthy who they can partner with to manage a lot of scary things in the financial world today.

Firms are "making it easier than ever for women to break into the industry," you write. How so?

I used to always see pictures on firms' website where the managers were white males and all the administrative assistants were young, pretty females.

When I'd ask the firms why they didn't have any women advisors, they said, "We would love to hire a woman, but we can't find any."

You just have to call "BS" on that. It means you're not looking in the right places and not trying very hard.

Also, you immediately set up a barrier for any women who are considering a job at your firm: They'll look at the website and say, "Forget this. There's no room for me unless I want to be an administrative assistant."

So firms have to stop doing stupid stuff and start doing smart stuff.

To what degree have they started the smart stuff?

I do think that firms and their owners are now recognizing that in order to be their most successful, they have to have women on the team and women lending their voices to how the firm is run.

How successful have firms been in trying to obtain more women advisors via their outreach programs?

There's no gigantic pool of women just waiting for somebody to call them up and offer them a job at a wealth management firm. That just doesn't exist.

But there is a bigger and bigger pool of young women who are still in college or who are just graduating that are ready for [these] jobs.

You might not be able to bring them into your firm to start being the lead advisor for 100 clients immediately. But you can bring them in a little lower down on the ladder and have them learn and earn their way.

What's another appropriate pool of female talent?

Women CPAs. Financial planning is a great transition career for many women who are in the accounting field.

They need some additional on-the-job training in the things they don't deal with every day in their CPA world, of course. But they're used to dealing with numbers and with clients. And the planning profession can offer them more money, more free time and a better work-life balance.