The deep dive: Women in Wealth Management

By Puja Sharma

The deep dive’ is our bi-weekly exploration of a relevant topic, hot trend, or new product. For Prime subscribers only.

How does it work?

Carson Group revealed the results of its first-ever State of Women in Wealth Management Report during Excell REPRESENT. The research study looked at the experiences and perceptions of both women and men on the opportunities and challenges faced by female advisors in the financial services industry.

Currently, women make up more than half of the U.S. population, but less than a quarter of financial advisors are women, which has remained largely flat for the last 10 years, according to the CFP Board. The 2022 State of Women in Wealth Management Report found there are several areas firms can focus on to improve representation.

Who is under the radar?

Female advisors face many of the same challenges as their male counterparts – growing a book of business, operational efficiency, and dealing with clients’ emotional responses to the market. However, the majority (88%) of survey respondents indicated that women have additional barriers that men are less likely to deal with.

• Around 73Balanceng professional roles with caregiving obligations
• About 70% Difficulties finding a firm that is a culture fit
• Out of which 57% have difficulty finding a mentor
• Over 34% Challenges in prospecting for new client

Perhaps more concerning is that nearly half (47%) of “other” write-in responses indicated that gender-based discrimination in the workplace is still a significant barrier to success in wealth management.

“If we want to see meaningful change in representation in the industry, we need to start solving for these barriers,” said Julie Ragatz, Ph.D. Vice PresidentNextGenen and Advisor Development Programs at Carson Group and co-author of the 2022 State of Women in Wealth Management Report. “We focus much of our energy on the recruitment of women, which is important too. But none of these barriers keep women out of the industry. They keep them from staying.”

Why does it matter now?

Only 13% of female advisors believe that clients rarely take gender into account when selecting a financial advisor compared to 26% of male advisors. This has a direct impact on a woman’s ability to grow her book of business.

In addition, 54% of female respondents strongly disagreed or disagreed with the statement, that financial advisors rarely take gender into account when seeking partners for joint work. Noting that in their experience, gender does play a negative role in receiving offers for joint work from other advisors, hindering long-term advancement.

“While there has been some movement in representation, which is good news, there’s more to be done,” said Mary Kate Gulick, Chief Marketing Officer, Carson Group. “We hope that the insights from the study will inspire problem-solving conversations and solutions we can start putting into action fast. There’s been a lot of talk on this in the last 20 years, but little intentional action.

There’s no denying that there has been some movement in representation over the last three decades; 60% of respondents agreed that the number of women in the industry has increased during their tenure.

But with near universal agreement among respondents (91%) that the underrepresentation of women in wealth management is a problem that should be taken seriously, 65% agreeing that it’s one of the most urgent issues facing the industry, and 60% believing that current industry efforts are ineffective, the conclusion is that there’s still much to be done. Much of the work will fall on individual firms thoughtfully crafting policies addressing flexibility, education support, mentorship, intentional advancement of women, and, of course, sexism in the workplace.