Wealth management veteran executive Kate Healy likes to tell the story about the time she was buying a car about 15 years ago. While she was waiting at the dealership, a man from the finance department walked in.
“My credit report was printing out. And he didn’t know [whose] it was. And he just said, ‘Hey, who has this client?'” Healy said.
When Healy said she was the person in question, the man was surprised.
“He walked over. He goes, ‘Wow, you have a really good credit score.’ And I’m not kidding, he patted me on the head.”
Healy, the former managing director of the CFP Board’s Center for Financial Planning (which she left recently to start her own consulting practice), said in an interview that while things have come a long way since that day, the industry still has far to go in catching up to serve women investors, as well as women advisors.
Read more: How advisors can help underserved wealthy professional women
Women currently make up just over half the U.S. population, at 50.4%, according to data from the U.S. Census Bureau. The same data source reported that as of 2021, nearly three in five members of the American workforce, aged 16 and older, was female — 58.7%. In addition, women’s financial power has surged in recent years — and as a population, they are expected to inherit much of the $30 trillion estimated to be passed down through 2030, according to McKinsey.
“In households, women make over 75% of the buying decisions, whether that’s a car, an appliance, where you’re going to buy the house,” Healy said. “There is so much power in the woman’s pocketbook, that financial planners don’t always see.”
Yet only 23.6% of all certified financial planners are women as of the end of 2022, according to the CFP Board. Women only make up 35.1% of all personal financial advisors, according to the Bureau of Labor Statistics, despite the fact that women in the industry who spoke to Financial Planning said it offers working conditions well-suited to women. The profession also pays handsomely, at a median annual salary of $95,390 and mean salary of $137,740, according to BLS data from May 2022 — which could help more women close the gender wage gap.
Read more: American women and a $30 trillion opportunity for the wealth management industry
Mindy Diamond, the founder and CEO of industry recruiting firm Diamond Consultants, said in an interview that wealth management firms had frequently expressed interest in hiring more diverse advisors and employees, which suggests the problem may be not lack of intention among HR directors but sometimes rather confusion over how to win those candidates.
“As a woman myself, I get probably more calls than most recruiters do, from firms looking for us to help them to increase their ranks of female advisors,” Diamond said.
Financial Planning spoke with experts in the industry on how wealth management firms can succeed in attracting and keeping more female advisors. Below are three tips they shared.