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Needed now: female financial planners

GettyImages-748335013Mind-blowing. That is the word that pops in my head whenever I see the statistics on women needing financial planning and the corresponding number of women planners available to provide those services. The numbers tell a story that needs a new ending:    

  • Women age 65 and older are three times more likely than men to be widowed, and 46% of women over 75 live alone.
  • 55% of women between 25 and 34 prefer working with female financial advisors.
  • Women represent only 15.7% of the financial planning industry
  • Only one third of women surveyed by Prudential in 2015 said they were either on track or ahead in their retirement plan.

The current story is we have millions of women in the U.S. who need a financial planner to help them prepare for their post-retirement years and live comfortably (and perhaps independently).  But the reality is these women have limited or no options to work with a woman planner. The plot thickens when you consider almost 40% of approximately 310,500 financial advisors plan to retire within the next 10 years, according to a 2017 report by Cerulli Associates. That means even fewer female planners will be available unless serious recruitment gets underway.

Before I go on, I want to be clear that my concern over the lack of female financial planners is not a reflection in any way on male planners or an inference that women planners are better. It’s simply a different dynamic. Women planners can add another perspective. Women are wired differently (literally and figuratively), as this Forbes article points out, which enhances their ability to communicate and see the big picture, vital skills for financial planning.  

Financial planning is similar to certain other professions in that a client trusts someone with their personal information and relies on their expertise to make decisions that may substantially affect their life. Some people prefer one gender over another when they seek a planner, just as they would a doctor or a lawyer. Women may be more comfortable discussing their financial habits or learning about investment strategies with another woman, particularly if they want to admit that they don’t understand something.

So why is there such a shortage of women in the industry? The Cerulli study indicated the majority of women advisors see work-life balance as an obstacle. I find this statistic puzzling, as I see flexibility as one of the major benefits of being a financial planner. Think about it: You’re not tied to an audit or tax return deadline, and to some or even a great extent, you can meet with clients at times that work well with your schedule. Need to pick up your daughter from soccer practice at 4 p.m. on Mondays and Wednesdays? No problem, you simply avoid scheduling appointments during that time.

My theory is that this statistic represents a larger issue – misconceptions about the industry. I think financial planning gets lumped in with other services such as asset management and investment advising, which can discourage a woman who is more interested in helping people with life choices than acting as a broker. I suspect a lot of people have no idea that part of being a planner is knowing about things like disability insurance. Bottom line: If you have good people skills (especially listening), good math skills, and a desire to learn and help others, you could be on the way to becoming a stellar financial planner.

It’s clear what the challenge is. But the question is, how do we address it? This problem didn’t evolve overnight, so it won’t go away that fast either. But firms can take steps now so that in a few years, we will be talking about this subject differently.

Mentoring

 Mentoring is perhaps the most critical action to start encouraging women to consider financial planning as a career option. I have found mentoring extremely rewarding. I won’t sugarcoat the effort involved – it’s definitely an investment of your time and energy – but I have never regretted it. If you’re thinking of mentoring or setting up a program at your practice, I would suggest keeping an open mind about eligible mentees. We may be prone to associating mentoring with interns or junior staff, but anyone can benefit from it. Is there a senior manager who is great with clients and dropping hints she is ready for a change?

 Examine and Debunk Misperceptions  

As I mentioned before, flexibility is a benefit of being a financial planner, and the more we can educate women about that, the better. However, firms should be upfront about how much flexibility is truly allowed – touting a work-life balance will lead to problems if the firm culture doesn’t encourage it in practice. Similarly, examine the revenue model, where other misperceptions may lie –  if someone starting out does not need to take a pay cut or build a significant client base to retain their current salary, make sure everyone knows that. Finally, as a profession, we need to continue to inform women of the skills that help make a good financial planner (e.g., problem solving, listening) to encourage them to join the ranks.   

Expanding college curriculums

We also need to encourage more colleges and universities to offer financial planning courses, which would be instrumental in prompting students to consider planning as a potential career choice. Up until 10 years ago, very few schools offered it. Given the pending shortage of financial planners, I hope we see this option on more curriculums.  

I consider myself lucky to have worked for someone who understood the value of offering holistic advice to clients (a partner at Deloitte, Haskins & Sells) and brought me into this field years ago. I love what I do and I love being the first person my clients come to for advice, and I am excited about the prospect of more women pursuing financial planning and enjoying those same rewards.

Next month, I will be part of a panel at the AICPA ENGAGE conference talking about the incredible potential of female planners that has yet to be tapped, and ways that firms can recruit, reward and retain them. I hope you can join us. 


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Hear more from Susan and dozens of other experts at AICPA ENGAGE in Las Vegas, June 9-14. Join your peers for four days of thought-provoking questions, candid insights and even some radical ideas. It’s your time to absorb, reflect, challenge and apply the best of what the CPA profession has to offer on issues ranging from technology and tax to marketing and practice management. If you can’t make it to Vegas this time, you can attend sessions online. 

Susan Bruno, CPA, PFS, Managing Director, Capital Wealth Advisors. Susan creates customized solutions for high-net-worth individuals and families. Recognized among her peers for her leadership, advocacy and philanthropy, Susan is the co-founder of DivaCFO and CollegeCFO.com. DivaCFO is a women’s empowerment platform to help women take charge of their personal finances and CollegeCFO is a student-driven initiative to help prepare young adults ages 18-24 for a successful future.

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