New research uncovers
the 'female effect' in the advisory business
May 29, 2018 @
2:55 pm
Even though women make up a small but growing
percentage of financial professionals, their influence has the potential for a
disproportionate impact on the overall financial planning industry.
New InvestmentNews research
found that advisory firms with a higher percentage of women tend to grow faster
and embrace a more holistic approach to financial planning, which helps
advisers move the focus away from the commoditized piece of investment
management.
The report, Defining the 'Female Effect' on
Advice: How female advisers are managing their practices and clients — and
igniting a new wave of growth, recognized distinct contrasts in
how female advisers operate their firms, view their roles, and are growing
their businesses relative to their male counterparts.
"I think you're seeing more women willing
to embrace what has been a male-dominated field, and it is truly inspiring to
see the number of women leading firms and working in financial services,"
said Clare Wherley, chief executive and co-founder of Lassus Wherley, a $480 million advisory
firm where 19 of the 21 employees are women.
The research found that women hold 34% of all
financial advisory roles, and represent nearly 16% of the total universe of
298,000 brokers and advisers.
Women make up 23% of Certified Financial
Planner designation holders, which is roughly the level it was in 2003, but the
ranks of female CFPs grew by 78% during that period to more than 18,000.
In terms of experience, the report found that
women advisers have an average of 11 years of experience and an average age of
42, compared to men that have an average of 22 years of experience and 53 years
of age.
But the current status, and even the history
of women in financial services, is just a footnote compared to what is expected
going forward, according to Joy Soodik, managing director and chief compliance
officer at Clarfeld Financial Advisors.
"The female effect in financial services
is analogous to women's movement in general," she said. "We're seeing
more women pursuing what they feel they are qualified for and are good
at."
Along those lines, Ms. Soodik cited the report
finding that women tend to be more focused on holistic planning than
many of their male counterparts.
"Being better listeners leads to more
holistic planning," she said. "Going back to the caveman times, women
have been known to be much better listeners."
The research, which included interviews with
203 women and 288 men, found that revenue generated by women between 2014 and
2017 grew by an average of 60% to $535,000, which compares to 50% average
growth for men to $440,000 over the same period.
Among the drivers identified behind the higher
growth rates for women was their tendency to embrace various marketing efforts,
including social media.
In terms of marketing activities used to
generate referrals, 51% of women said they use social media,
compared to 33% of men.
Leveraging community involvement for referrals
was a strategy of 48% of women and 42% of men.
And the use of public relations for marketing
purposes was employed by 38% of women and 30% of men.
"I've always found women advisers to be
more open to creating a marketing plan, and more open to the concept of a
consistent marketing program," said Pat Sweeny, principal and co-founder
of Symmetry Partners, a third-party asset
management platform for financial advisers.
"For men, I've found that the marketing
and outreach was always tougher unless they were predisposed to it," he
added. "Women advisers are far more friendly and open to the concept of
building holistic planning practices and less likely to see themselves as
investment managers."
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