Women breakaways share a common thread: They feel the fear and
do it anyway. But why?
Jun 4, 2019 @ 12:22 pm By Mindy Diamond
The wealth management industry seems to have
all the markings of being a "natural fit" for women. Women tend to be
more nurturing and relationship-driven than their male colleagues. They thrive
on their innate abilities to connect and be empathetic — key traits that power
their delivery of an exceptional experience to clients.
Yet the age-old question remains: Why aren't
there more women in wealth management?
Equally curious is why — with the tremendous
momentum of the adviser movement toward independence — there aren't more
women-led independent firms.
According to InvestmentNews, so
far in 2019 only 13% of breakaways were women; in the last three years, only 7%
of breakaway deals that my firm facilitated included females at the helm.
As a recruiter, I spend my days speaking with
both men and women in the financial services space. Based upon many
conversations with women advisers in particular, here are my observations:
• Women tend to be more fiercely loyal to
their firm than their male counterparts.
• They typically think less about building
their business and more about being laser-focused on serving their clients'
needs.
• While everyone struggles to deal with
work-life balance, women tend to stress more about their competing priorities
than men.
• Ultimately, women are more risk-averse and
typically need to "feel more pain" than their male counterparts
before deciding to make a major change — and that change needs to come with a
greater sense of certainty before they jump in.
None of these traits are negatives; they do,
however, paint the first strokes of a much bigger picture that answers the
question "why?" Many of the very qualities that make women great
financial advisers are also the very same ones that keep them from making a change.
One top female wirehouse adviser illustrated
many of these points when she told me, "I don't jump into something until
I know I can be perfect at it — that I can get an A-plus — while the men I know
are completely comfortable jumping in and figuring it out as they go along. I
don't think women are wired to think that way."
Then there are women who have made the leap.
What's different about them?
Being an independent financial adviser is
defined by the ability to deliver customized service to clients, unencumbered
by a big firm agenda. This freedom to prioritize client needs would seem to be
naturally appealing to women — yet many remain stuck because a move to
independence is the ultimate test of the very things that keep women from
moving in the first place.
In speaking with women who've made the leap, I
found that they share a common thread. Essentially, they still had all of the
same concerns about being disloyal, upsetting their work-life balance and fear
of the unknown, but they were driven to action by something more powerful.
For example, Michelle Smith broke away from
Wachovia in 2004 when she "hit the world of 'no'." The founder and
CEO of New York City-based Source Financial Advisers, an RIA managing more than
$400 million in client assets and focused on divorced women, felt she had
"no other choice" but to start her own firm.
The realization the traditional brokerage
world could not offer the flexibility she needed to serve her sophisticated and
unique client base was a powerful driver — far stronger than the risk she knew
she'd be taking.
After seven years at Wachovia, she had a
choice to make: Continue to offer what she described as a "sub-optimal
experience" for her clients or do something radically different. "I
believe the best time to take a risk is when your gut instinct first tells you
to take it," Ms. Smith said. "I just knew I had to build my own
firm."
Another top woman breakaway said, "Based
upon my experience, women and men seem to be equally terrified of the prospect
of breaking away and potentially compromising their financial well-being."
This adviser, Margaret Dechant, CEO and
founding partner of Wichita, Kansas-based 6 Meridian, a $2.5 billion RIA, saw
past the fear when she and her partners broke away from Morgan Stanley in 2016.
Her motivation was similar to Ms. Smith's: The
limitations at Morgan Stanley stood in the way of her deep commitment to serve
as a true fiduciary to her clients.
Having a clear vision and the ability to see
it through is what made the move worthwhile, Ms. Dechant said. "Once we
got to the other side, we found a true level playing field — one that we had
only ever dreamed of and where we can be as successful as we want to be."
Emily Sanders, a managing director for United
Capital Partners in Atlanta, Georgia, came to independence from the corporate
world.
"I had a tremendous personal drive to
prove I could do it." she said.
Ms. Sander's drive was indeed tremendous. She
started an RIA from scratch in a home office (her spare bedroom), was
independent for 18 years and then sold her business to United Capital Partners
just over six years ago.
Managing more than $400 million in client
assets, she was driven to build a business that would allow her to always put
her clients' interests first. Like others, she struggled with the fear of
failure and the unknown, yet found a way to see past that.
Ms. Sander's advice to other women advisers:
"Have the courage to make the leap to independence if serving as a
fiduciary is important. For me, it helps me to sleep better at night knowing I
am."
Finding the common thread
Fear is often at the core of what prevents
many of us from making major life changes. Yet some, pulled by a vision that
they believe is worth taking the risk for, fear often takes a back seat to the
greater potential of what could lie ahead.
In speaking with these women and others who've
made the leap, their pull to independence was guided by a common thread:
• Self-confidence
• Courage
• Conviction
• Passion
Each of these advisers believed they couldn't
serve their clients in the best way possible from within the confines of a
brokerage firm. Their passion and conviction to do what they saw as
"right" far outweighed all of what makes many of their colleagues
stay put.
One adviser told me that her leap to
independence was much like her first experience sky diving: "It's
incredibly frightening when the door first opens. But once you look down and
see the world through an entirely new lens, you feel the fear and make the
choice to do it anyway."
No doubt the move can be scary. But those
who've gone before you agree: It's the best jump they've ever made.
Mindy Diamond is founder and CEO of Diamond
Consultants, a financial recruiting firm.
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