This is part two of a two-part series on gender inclusion in the financial services industry; read part one.
In part one of this series, we explored two problems from a recent InvestmentNews study, Women in Advice: Inspiring the Next Generation of Financial Advisors. Researchers found that stalled professional progress and work-life balance were among the five common problems faced by women financial advisors when it came to their careers.
The final three concerns involve pipeline and career progression.
3. Too Few Women Advisors
According to the Certified Financial Planner Board of Standards, the percentage of women who hold a CFP certificate has stayed steady throughout the past 15 years at around 23 percent, despite an increase of overall certificate holders by 80 percent. Interest in a financial advisory career is clearly growing, so why isn’t the number of female advisors growing with it?
Also, not many women know that financial advisory is a possible career path in the first place. The lacking public awareness of financial advisor careers, coupled with the fact that most people misunderstand what financial advisors do, might be contributing to this discrepancy.
Action Item: Active recruitment of the next generation of women
Most firms might already be tackling their gender diversity and inclusion problems by trying to reach out to more female job candidates, but the follow-through and results tend to vary.
The InvestmentNews survey showed that the top reasons why women go into this field are because they have a desire to help people and because they enjoy connecting with clients. One way to recruit more female advisors is to leverage your advisor tech stack, particularly if you have tools that can scale engagement and one-on-one interactions with clients.
Talking about the ways your firm prioritizes these aspects of an advisory career can turn more recruiting leads into actual prospects. For example, digital tools that help streamline and personalize communication with clients and prospects via social media or text messaging might be of particular interest to female prospects.
Recruiting should keep these motivational factors in mind when reaching out to the next generation of women in order to increase hiring success rates.
4. Lack of Role Models
The “role model theory” states that in order to easily imagine yourself in a higher position, you must see someone that you identify with as having gotten that position. This is consistent with InvestmentNews’ findings that 42 percent of female respondents cited the lack of women in leadership as contributing to gender inequality in the industry, as opposed to only 21 percent of male respondents.
Action Item: Commit to promoting women to leadership positions
As women see more female role models in leadership, it’ll become easier for them to imagine themselves in those roles, too. To improve the success of women in your organization, make it a priority to mentor the women at your firm and provide them with structured learning opportunities as well as consistent exposure to leadership. By investing in and empowering the women you already have, you’re investing in and empowering the female advisors of the future.
5. Lack of Opportunities
“Limited advancement opportunities” was chosen at a much higher rate by women than men as a barrier to advancement opportunities, according to the InvestmentNews survey. Some potential reasons for this might be because of a lack of defined career paths, gender stereotypes and stereotype threat, or something else entirely.
Action Item: Improve training and define career paths
The uncertainty of what the next steps should be in a woman’s career is another barrier holding women back from advancing. In order to mitigate this, firms must improve their training and define the available career paths for the women in their workforce.
Laying out clear-cut and organized career paths also helps foster an open and transparent workplace where the question of how one can be promoted – and to what positions – is apparent from day one.
Action Item: Tackle implicit sales bias
Throughout the industry, there is a growing demand for holistic financial advice, which means the success of the sales-focused advisor will soon be a thing of the past. The financial advisory industry has historically valued asset gathering and revenue generation above other firm activities, such as support and financial planning, which tend to be deprioritized.
Women who hold positions in other parts of the firm should be provided with mentorship and career growth opportunities to build their business development and sales skills in order to give them the tools necessary to succeed in leadership positions.
More Tactical Steps for Defeating Gender Inequality
Solving an issue as big as gender diversity might seem like a lofty goal, but the InvestmentNews study offered the following actionable tasks.
- Make gender diversity a firm-wide commitment. Put it in your mission statement and all job descriptions. Set a company vision and follow through with the way you hire and promote individuals in your organization.
- Establish new policies and programs. Take another look at your current recruiting practices, career paths and mentorship programs and see where you can improve.
- Encourage and promote women into leadership positions. Send women to participate in leadership or executive programs. Provide opportunities for junior- and mid-career individuals to work directly with leadership on strategic projects.
- Increase workplace flexibility. Allow employees to work from home or consider reworking your vacation and sick leave policies. If you don’t have a parental leave policy, look into creating one or revisit the one that you currently have to make it more updated with industry standards.
- Be aware of any tacit sales biases. Client needs are changing and your advisors have to change with them. Holistic financial planning is in demand, so be cognizant of any implicit sales biases you might have.
- Set goals and monitor progress. Follow through to the end and treat gender diversity as seriously as you would treat any other company initiative. This means that you need to not only implement new programs but also keep track of whether or not your programs are working. Set deadlines, document numerical goals, identify who is accountable for each aspect of the program’s success, and regularly monitor how the programs are performing.
As with any important business problem, the gender imbalance won’t be solved easily. It will take time, dedication and creative problem-solving to fix an issue that exists structurally as well as on a societal level. But, like any other important business problem, tackling it now will pay off for your employees, for your firm, and, ultimately, for your long-term bottom line.
Are you a current Hearsay customer? If so, join our “Recruiting the Hearsay Way” webinar on January 23, 8am PST/11am EST. Learn from our very own Customer Education team about how you can use social media to improve your recruiting efforts and build out a winning advisory team.