CFP Board Seeks to End Industry’s “Feminine Famine”
Getting more women into the financial-advice industry requires removing their own doubts about the industry and combating the gender bias prevalent at wealth-management firms, according to the CFP Board.
The organization released its findings about how to accomplish those goals at an April 22 event in New York convened as part of its Women’s Initiative, or WIN. Launched last May, the initiative seeks to identify why so few women join the profession, recommend ways to increase their ranks and conduct campaigns addressing what WIN is calling the “feminine famine.”
WIN’s advisory panel includes women from across the industry and is chaired by Nancy Kistner, U.S. Trust’s market director of wealth planning solutions. “Who runs many families? Women,” she told the audience of mostly female advisors, consultants and financial executives. “Who better to be focused on delivering financial advice to families than women?”
Although women account for 51% of the U.S. population and the majority of current college graduates, they are underrepresented in financial planning — even more so than in many other professions. In fact, women represent only 23% of total CFPs, a percentage that has held constant in recent years while the overall number of CFPs has grown.
WIN’s report on the persistent gender gap is based on online, telephone and in-person research. The researchers gathered information in late 2013 and early this year from financial executives, men and women in the advice industry, CFP students and others.
In general, they found that women outside the profession are unaware of how financial planning is performed and what CFP certification entails, are prone to believe the profession is more about math and investments than communication and relationship-building, and are less likely than men to advocate for themselves in the workplace.
Meanwhile, advisory firms create environments favoring men, according to the research, by hiring more men, assuming women will leave work when they have children, tolerating pervasive disrespect for women in the office, and perhaps even using unpredictable compensation models — like commissions or percentage of AUM — that some women may consider risky.
The CFP Board recommends firms and industry associations do a better job of marketing to women. Part of this entails explaining that people skills are at least as essential to the profession as investing skills, and producing marketing materials that show more women in the advisor role. But it also includes an educational component — for example, creating financial-planning programs in schools and universities, and getting organizations like the Girl Scouts to incorporate financial literacy in their programming.
WIN’s advisory panel includes Mindy Diamond, president and CEO of advisor-recruiting firm Diamond Consultants, based in Chester, N.J. She said independent advisory firms in particular should extol the virtues of that channel to young women who might make good candidates. “It’s a flexible career for independents,” Diamond said. “They can run their practice however they like.”