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Women Advisors Critical to Future of Wealth Management, Yet Remain Woefully Underrepresented
Across the Industry, According to New Pershing Study
Study Offers Critical Advice for Addressing a Traditionally Underserved Market
Through the Recruiting and Retention of Women in These Roles
JERSEY CITY, N.J.-March 8, 2013-Pershing LLC, a BNY Mellon company, today released a new study entitled, "The 30% Solution: Growing Your Business by Winning and Keeping Women Advisors," which offers the industry practical insights and ideas on how to better recruit and retain women. The study comes at a time when women make up half the U.S. population and nearly two-thirds of the American workforce, yet female advisors remain woefully underrepresented in the financial industry. In fact, only about 30% of advisors are women-and the numbers are dropping.
There are several factors playing into the decrease in women advisors. To begin with, more than a third of advisors today are less than a decade from retirement. Additionally, according to the U.S. Department of Labor, there is a significant pay gap between men and women-with women advisors earning just 58 cents on the dollar compared to their male peers, costing women an average of $1.25 million over the course of a 35-year career.1
There are also cultural barriers that continue to exist at the executive level. According to a University of North Carolina Business School study of Fortune 500 companies, more than half of respondents said that developing women executives was not on the agenda2.
"While attrition is eating away at the number of current advisors for a number of reasons, the need for investment advice continues to grow," said Kim Dellarocca, head of practice management and segment marketing at Pershing. "In fact, we expect that financial services firms will need to recruit hundreds of thousands of new advisors over the next decade to meet growing demand. Financial services businesses would be well-served to better recruit and retain women advisors to help fill this need."
Not Just One New Opportunity, But Many
According to the study, advisors as a whole are in demand-particularly when it comes to women clients. Women investors are significantly more likely to engage advisors than men (46% vs. 34%). Additionally, nearly two-thirds
of female millionaire investors and 82% of female ultra-high-net-worth investors prefer working with an advisor.
Yet, women investors are not a one-size-fits-all category-and female advisors seem to be ahead of the curve in understanding and seizing these differences.
Today, for instance, women-owned businesses represent trillions in economic activity. To realize the full potential of this market, Pershing says that advisors should look to build broad client relationships that address business and personal needs at the same time. For example, many newly-divorced women seek new financial counsel because of the unequal level of attention and service they received, compared to their husband, from their advisor when they were married. As a result, divorce planning is now a burgeoning specialty for advisors, with growing numbers becoming certified as divorce financial analysts (CDFAs).
Some savvy financial services firms have begun to edge ahead of their peers with new programs to enhance the role of women advisors, offering practical steps, like the following, that virtually any business can take:
1 Forbes.com, June 24, 2011.
2 UNC Kenan-Flagler Business School, UNC Leadership Survey 2012: Women in Business, 2012.
Conduct an honest self-assessment - If you would like to achieve greater success in working with women advisors, start by benchmarking your current situation (i.e. What are your specific hiring goals and motivations for doing so?)
Launch an internal affinity group - These firm-wide professional networks help promote mentoring, the exchange of ideas, mutual support and lasting personal relationships among peers
Promote sponsorship - Led by senior advisors, these sessions can help developing advisors segment their clients, stay engaged, strengthen their relationships and improve the efficiencies of their businesses
Start a development talent program - Developing talent programs are designed to offer promising women advisors high-profile exposure to senior leaders, combined with exclusive training and networking opportunities in a central location