Why So Few Women Opt for Independence — and How More Could
Many of the qualities that make women excellent financial advisors are also keeping them from making the move toward independence, Mindy Diamond writes in InvestmentNews. At the same time, many female advisors who have taken the plunge share certain characteristics, she writes.
Just 13% of the breakaways so far this year were women, according to Diamond, founder and CEO of financial recruiting firm Diamond Consultants, who cites InvestmentNews data. And among the companies Diamond’s firm assisted over the past three years, only 7% of the breakaway deals included female leadership, she writes.
What’s keeping women from making the move is precisely what often separates them from men: their loyalty, their focus on their clients’ needs over building their business, their stress on competing work-life priorities and their risk-averseness, according to Diamond.
"I don’t jump into something until I know I can be perfect at it — that I can get an A-plus — while the men I know are completely comfortable jumping in and figuring it out as they go along,” one top female wirehouse advisor once told Diamond, she writes. “I don’t think women are wired to think that way."
The women who have made the jump to independence, meanwhile, often did so because they had no other choice, according to Diamond. In the case of Michelle Smith, who left Wachovia in 2004 to start the RIA Source Financial Advisers — which now manages more than $400 million — it was the realization that she couldn’t keep offering a "sub-optimal experience" for her clients, Smith tells Diamond. Margaret Dechant, CEO and founding partner of Wichita, Kan.-based RIA 6 Meridian — which oversees $2.5 billion — tells Diamond that she and her team left Morgan Stanley in 2016 because being at the wirehouse prevented them from serving as true fiduciaries.
"Have the courage to make the leap to independence if serving as a fiduciary is important,” Emily Sanders, a managing director for United Capital Partners in Atlanta, tells Diamond. “For me, it helps me to sleep better at night knowing I am."
Ultimately, what the women who made the jump have in common, according to Diamond, are self-confidence, courage, conviction and passion.
“No doubt the move can be scary,” Diamond writes. “But those who’ve gone before you agree: It’s the best jump they’ve ever made.”