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Advancing Women in the Financial Services Industry

Mary Bell Carlson March 10, 2022

Woman financial advisor meeting with female client

Today, women control a third of total U.S. household financial assets, and by 2030 they are expected to control much of the $30 trillion in financial assets owned by Baby Boomers, according to a study by McKinsey & Company.1

Women will also control a large amount of asset transfers in the next three to six years. Significant factors for this shift in assets include that women live an average of five years longer than men and that 70 percent of them will change advisors within a year of their partner dying.1

This is a momentous opportunity for wealth managers and requires firms to attract and retain female clients as well as female financial advisors who will be key in gaining these incoming assets and business from other women.

What Women Bring to the Industry

Women often choose careers that are considered helping professions that give them a sense of fulfillment. Serving as a “help-provider” appeals to many women who want to feel success in their profession and also want a career that aligns with their values and needs. This is why the field of financial planning is an excellent fit for those looking to serve others and gain personal fulfillment by helping people meet their financial needs.

The ability to understand money is vitally important—especially to women as this significant asset shift occurs. Research has shown that both men and women need sufficient financial literacy to take care of their financial responsibilities2. However, women have lower financial literacy rates overall and less access to appropriate financial products than men, necessitating specific access to financial education and advice for women in everything from budgeting day-to-day expenses to investing for future retirement.

The route to my career started with my own education in financial planning. Upon my master’s graduation, I moved to Washington, DC, to work for the Financial Planning Association. I was able to combine my education and desire to teach others basic financial principles as I worked as an advocate for financial education within DC power circles, including the U.S. Treasury’s Financial Education and Literacy Council. It was in the early years of my career that I saw the impact a single teacher and help provider can have on many individuals and families and how it can change the trajectory of families for generations to come.

As help givers, women often feel more fulfilled as they see the direct impact of their own teaching and advice-giving to others. The power in teaching is that you have the ability to give something that in turn changes the lives of those you reach. Women also have a unique ability to take something very complex, like finance, and break it down and teach it in a relatable way. Our industry is better served as we encourage women to join this field.

Becoming More Diverse as an Industry

To attract women and other diverse candidates to the financial planning profession, we need to do a better job of defining the profession and expanding the work within it. One of the first things that comes to mind when someone thinks about financial planning is the technical aspect of the job. Understanding investments, taxes, and estates is an important part of wealth management, but an even more vital part of the industry is understanding human behavior. Our technical knowledge doesn’t matter if we aren’t able to communicate this information in a way that meets the client’s needs and helps them make better financial decisions now and in the future.

As a college professor, I often get students coming to me for career advice. I’ve heard many—especially women—say they don’t “fit” within the financial planning profession, often relating that they feel the need to leave the profession to do what fulfills them and aligns with their interests. I disagree. I think that as we expand this field, we all gain unique and varying insights as well as the ability to touch countless lives that may not have been served by a narrower definition in this space.

There are so many people and families who would greatly benefit from inclusive services such as financial counseling, coaching, and therapy. My advice to anyone struggling to find their footing in this field is to follow your passion, do what drives you, and create an impact in the niche that resonates with you. Don’t let someone else’s narrow definition of this field stop you from achieving what only you can uniquely do. We need you and all you can bring to this profession!

There is a blue ocean of opportunity for women in this field, including expanding our definition of financial planning roles to include financial counseling, coaching, and even therapy. My colleagues, Derek Lawson and Ed Coambs, and I recently discussed a variety of careers paths available as part of the webinar: Exploring the Financial Field: A Panel Discussion. As we expand the field, let’s also expand our definition of helping professions within financial planning.

Empowering Women to Attract More Female Advisors

Research indicates that women are feeling left out of financial planning discussions, as well as feeling less financially confident and secure overall.3 When women feel less confident, and perhaps even intimidated by money discussions, they are more likely to want to do business with someone they can relate to. People feel more comfortable talking to someone who “looks like them.” This sentiment goes beyond gender and supports all types of diversification. There are many factors involved in attracting female candidates to work in financial services companies, and they can be as different as each individual you interview. It’s vitally important to listen to the needs of female advisors to help increase capacity and relevance with clients.

Research also shows that women are more likely than men to take breaks in their careers to offer caregiving to family and loved ones.4 When I decided to go into the field of financial planning, I remember reading about a mother who started her own firm so she could balance her work and family life. It was inspiring to me, and I knew that pursuing a career in this field would allow me the flexibility I wanted when I was ready to start a family.

Over the last two decades, I have carved my own flexible path as my family has taken shape and grown. It is still not standard in our industry to allow for caregiving gaps. Firms who want to expand their talent pool of female advisors should not only listen to what they are seeking in a fulfilling career but also recognize the unique contributions they bring that will enhance the business and bottom line.

Each employees’ needs may be different, but firms can look for ways to add flexibility to support women in their role in society, our industry, and their home. If we look at the desire for flexibility and allow for it within our profession, there will be opportunities for growth and expansion. If companies want to retain, not just women, but all types of workers, it’s time to rethink and be open to the variety of ways work can be accomplished. This is the way to expand and enhance your talent pool.

Now Is the Time to Accelerate Women in the Financial Planning Profession

The pandemic has accelerated a shift in workers’ views as they prioritize their values and determine what really matters to them. Women especially are looking for a career that provides flexibility and brings balance to their home and work lives.

In many cases, work was pulling them away from their families and what they value. As we’ve seen over the last year of the great resignation, workers are no longer accepting the status quo. Now is the time for employers to really rethink and expand their capacity for hiring and retaining talented female workers which will, in turn, attract female clients who will be managing an increasingly large amount of assets in the years to come.

When women feel fulfilled in their careers as financial professionals, they can do a job they love for an industry that needs their participation.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

The views and opinions expressed by this blog post guest are solely those of the guest and do not necessarily reflect the opinions of eMoney Advisor, LLC. eMoney Advisor is not responsible for the content, views or opinions presented by our guest, nor may eMoney Advisor be held liable for any actions taken by you based on the content, views, or opinions of the guest.

Sources:

Baghai, Pooneh, Olivia Howard, Lakshmi Prakash, and Jill Zucker. “Women as the Next Wave of Growth in US Wealth Management.” McKinsey & Company, 2020. July 29. https://www.mckinsey.com/industries/financial-services/our-insights/women-as-the-next-wave-of-growth-in-us-wealth-management

2 “Addressing Women’s Needs for Financial Education.” OECD, n.d. https://www.oecd.org/daf/fin/financial-education/OECD_INFE_women_FinEd2013.pdf.

3 “Women, Money, and Power® Study.” Allianz Life Insurance Company of North America, June 2019. https://www.allianzlife.com/-/media/files/allianz/pdfs/newsroom/2019-women-money-and-power-summary-sheet.pdf.

4 “Gender Care Gap Is Costing Women at Work.” AIG, May 2019. https://www.aiglife.co.uk/media-centre/gender-care-gap-is-costing-women-at-work/.

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About the Author

Mary Bell Carlson, Ph.D., CFP®, AFC® is a financial behavior expert who has helped hundreds of people improve their personal finances and inspired other professionals to improve their communication skills. After getting married and having children, she started Chief Financial Mom.com, a personal finance education platform to help busy moms. She teaches in the financial planning programs at University of Georgia and Texas Tech and serves on the board of George Mason University’s Financial Planning and Wealth Management program. Mary is also the co-host of Real Money, Real Experts, a podcast covering real stories about how financial counselors and coaches impact their clients and can grow their businesses. She earned her Ph.D. from Kansas State University in financial planning with an emphasis in financial therapy. She also has a master’s degree in financial planning from Texas Tech University and a degree in political science from Brigham Young University.

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