By Lindsay Faussone
It’s no secret that there’s a significant gender gap within the field of financial services. While nearly half of all financial services employees are women, women occupy just 15 percent of the industry’s executive suites and comprise a mere 17 percent of US financial advisors.
While the shortage of women in leadership and advisory positions is clear, often overlooked is the dearth of women clients.
Addressing the client gender gap
Having worked with financial advisors for nearly 20 years, I have observed that the client gender gap is particularly troubling—especially, given that women tend to outlive men and often control household finances.
Women are an underserved segment, and that’s really a missed opportunity. While men might get most of the attention, studies show that women will control an increasing amount of the nation’s wealth in the coming years—both as breadwinners and as beneficiaries of wealth transfers. As an advisor, why would you not want to capitalize on those trends?
Part of the problem is that women don’t always feel that advisors speak their language. While advisors may have clients’ best interests at heart, many advisors get hung up on performance metrics and beating benchmarks.
Advisors really have to personalize their messaging and build women’s trust. While women often think in terms of meeting financial goals and creating stability for their families, advisors can zero in on performance. And that’s not always the conversation women want to have.
I have also observed that women tend to be more risk-averse than their male counterparts, which can create additional disconnects. What may sound like a sensible risk/reward tradeoff to one person can come off as rolling the dice to another. In some cases, it may just be a matter of fine-tuning semantics. Men and women often hear things differently, even if they’re trying to convey the same message.
Tips for recruiting female advisors
In many cases, the same stumbling blocks that keep male advisors from connecting with prospective female clients can come into play when recruiting women as advisors. Women tend to seek purpose and meaning in their careers, which makes for an ideal pitch in a field that prioritizes building relationships and attaining financial goals.
Here are some tips for firms looking to recruit more women advisors:
- Prioritize purpose in recruiting. There are often common misconceptions about financial advice and how it is heavily focused on numbers and finance, however there’s so much more to it. Advising clients has tremendous purpose—it’s why many advisors get into the business, and highlighting this in recruiting efforts will help you reach candidates who may not have considered joining the field.
- Focus on the planning aspect of the business. If you make it all about picking stocks and beating benchmarks, you’re going to drive a lot of women away. While women can be talented stock pickers, working toward long-term financial goals often provides greater satisfaction.
- Education, training and coaching. The more the better. By providing your team with continued education in the form of industry conferences, seminars, and workshops, this will further growth while continuing commitment to the field. Mentorship programs can also help with attracting and retaining candidates.
- No flowers, please. I have noticed the use of floral themes and feminine colors at forums aimed at women. We just want to be treated like everyone else and doing this comes across as off-putting.
While there’s a long way to go in addressing the financial services gender gap, I believe the tides are bound to turn. Understanding women’s needs and their pain points isn’t about benevolence. The fact is, women will control a good share of the country’s wealth going forward and it’s high-time the financial services industry makes it a priority to implement women focused initiatives—to recruit more women advisors and target more female clients.
In other words, mind the gap.
Lindsay Faussone is Vice President Strategic Programs, E*TRADE Advisor Services