The theme of this year’s International Women’s Day on March 8 is equality. Its more specific business focus asserts that “gender equality is essential for economies and communities to thrive.”
For the financial advice community — where 14% of advisers are female — it’s a lengthy road to gender equality. But as the financial planning business looks beyond its first 50 years, it should consider setting a goal to double that percentage over the next decade.
By 2020, 32% of all wealth is expected to be controlled by women — about $72 trillion – so a goal of having about 30% of financial advisers be women seems sound. In fact, the competitive landscape will likely demand it.
Getting there is the challenge.
Conclusions from a recent study, though, suggest that a focused effort on helping women move beyond entry-level positions in their financial services careers could make a meaningful dent in the dearth of female leaders in the profession.
The reality today is that women represent fewer than one in five positions in the financial services C-suite. New research from LeanIn.Org and McKinsey & Co. shows that even though women and men enter the financial services workforce in roughly equal numbers, men outnumber women by nearly two to one when it comes to that first step up into manager jobs, which are the bridge to more senior leadership roles.
That early drop in the number of women earning promotions appears to blow open a gender gap that widens with every step up the career ladder. Therefore, new strategies that increase a woman’s desire and ability to reach that first level of management could make a significant impact in thenumbers of women in the candidate pool for leadership.
Some firms’ diversity efforts are, in fact, already pivoting to focus on helping women move up.
Lisa Burns, Fidelity Institutional’s head of platform technology, said her firm is focused on recruiting more women. Speaking at the T3 Advisor conference recently, she said the firm is specifically trying to boost the diversity of its leadership development programs.
Other firms are focusing more broadly on the retention of diverse talent. Their leaders recognize that holding onto diverse advisers may require adviser business models to move beyond “eat what you kill.” In addition, compensation structures may need to reward relationship-building and client service, not just sales.
FIVE THINGS A FIRM CAN DO
Joe Keefe, president and CEO of Pax World Funds, has identified five things firms can do to create a workplace that offers equal opportunities for men and women, recommending tangible steps like conducting a pay equity audit. These suggestions may be useful if your firm is looking for a way to answer the International Women’s Day call to action, namely, how will you and your firm support #EachforEqual?
At InvestmentNews, for the past five years, our Women to Watch programs have highlighted women who have been successful in the financial advice industry so that young women have role models. Four days after the official International Women’s Day this year, InvestmentNews will be gathering with the more than 100 women recognized over the years at an event in New York City to debate different strategies to help women rise to the top.
We’ll report back soon with recommendations from these female leaders in financial advice on how to create a thriving financial adviser pool that better reflects the diversity of investors by 2020.