Tips for Women Interested in Entering the Financial Advice Space
Less than 20 years from now, some say, two-thirds of the nation’s wealth will be in the hands of women, yet not many females have been trying to take advantage by entering the financial advice space.
This is despite the fact that for both junior and senior financial planning positions, the normal gender pay gap is actually four times smaller than the national average, according to the Financial Planning Association.
“According to the U.S. Bureau of Labor Statistics, women who work full-time make 80 cents for every dollar earned by a male,” says the FPA. In contrast, says the association, women employed as a junior financial planner make 95 percent and those employed as a senior financial planner make 95.8 percent of what their male counterparts make.
Senior planner males made an average salary, bonus and annual incentive of $102,000 in 2010, as apposed to a total $97,760 for females, for instance, says the FPA's research department, citing factors such as the relative newness of the planning business and its emphasis on finding people with the right combination of client interaction skills and numerical skills. The figures are based on the responses of association members, Richardson says, and are based on a large enough sample to represent the independent financial planning community at large.
Meanwhile, American women have earned more bachelor's and master's degrees than men every year for three decades, leading to increased earning power. “Add to that the generational and spousal wealth transfer these women have coming down the pipeline (estimates range from $14 trillion to $25 trillion) and it's clear why many predict that by 2030, two-thirds of the nation's wealth will be in women's hands,” reports Financial Planning Magazine.
Women who are interested in entering the financial advice space should know that it’s not all about the sale, say female wealth management pros.
In fact, many planning professionals are also fiduciaries who are held to a higher standard than other advisors in that they have to act in their client’s best interest, as opposed to choosing investments that are simply “suitable” for their clients (and might also be suitable for the advisor who gains a higher commission for selling those products). Registered Investment Advisors (RIAs) are among those held to the higher standard.
Here are some general tips for women interested in the advice field from other female advice pros:
1. Do consider the RIA and private wealth channels, says Certified Financial Planner and Chartered Financial Analyst Susan Hirshman, author of the book Does This Make My Assets Look Fat?: A Woman’s Guide to Finding Financial Empowerment and Success.
“At the wirehouses, if they hire 100 new trainees, no more than 15 percent [or thereabouts] will be successful. That may be off-putting for certain women,” says Hirshman.
“Private banking, on the other hand, has a larger percentage of women since it’s traditionally been more of a relationship-based business and they always give people a significant base salary [instead of straight commissions]. So while the upside may not be as great, there’s some added stability,” she says. Even a bank-owned division like J.P. Morgan Private Bank with top high net worth clients might be a bit more relationship-focused female friendly than other parts of the wirehouse channel.
2. Reach out. “Find women in your community who do this and talk to them and really understand what the job is, what the pros and cons are, the culture and really evaluate whether this is how you’d like to spend your day,” says Hirshman.
3. Do your research. One way to find those professionals is by going to the CFP Board site. Once you have the name of a firm or individual practitioner, you can also go to the SEC and see if they’ve registered as RIAs.
You might be surprised at the interest some professionals will have in showing you the ropes and giving you the benefit of their own experience so long as you are truly motivated.