There's a gendergap between demographic trends and the financial advisorybusiness. Women have an increasing share of income and wealth inthe United States and globally, but they are underrepresented amongfinancial advisors in the U.S.

BMO Financial Group's 2015 report,“Financial Concerns of Women,” reports that women currently control51% of personal wealth in the U.S. In addition, they are theprimary breadwinners in more than 40% of American households, whichis an almost fourfold increase since 1960.

In contrast, women compriseonly 15 to 20% of financial advisors in the U.S. (Some sources citea higher percentage but those results can includesecurities-licensed sales assistants.) Just 23% of CertifiedFinancial Planner licensees are women, a figure that hasn't changedin years, and women comprise only 12.9% of the Million DollarRound Table's early-2016 roster.

These comparatively lower numbers raiseseveral questions: Why do fewer women work as financial advisers?And for advisory firms that wish to recruit, hire and retain women,what steps can they take to find the right candidates and improvetheir hires' chances for success?

The BusinessCase

An adviser's gender is not top of mind for most clients. A 2012study from the Family Wealth Advisors Council, “Women of Wealth:Why Does the Financial Services Industry Still Not Hear Them?”reports that among married and single women respondents,more than 90% did “not have a preference about the gender oftheir adviser.” That finding changed among divorced and widowedrespondents, however, with about 25% of those groups citing astrong adviser-gender preference, most frequently for women.

But other sources believe there is a legitimate business riskfrom ignoring gender disparity. Most Americans have become moresensitive to situations that lack representative diversity. Whileclients might be unconcerned about a male-dominated advisory staff,will prospects feel the same way? Staff diversity can helpprospects identify with a firm more readily. Several yearsago, an adviser told me how he works successfully with clients ofdifferent races and his observation applies to gender. Peopleare most comfortable with their own tribe, he says, and having adiverse staff can help foster relationships with a wider range ofclients.

The StumblingBlocks

So what's behind the low participation rate? In April 2014, theCFP Board in Washington, released a study, “Making More Room forWomen in the Financial Planning Profession,” as part of its Women'sInitiative. Among the findings from the women surveyed:

• Women lack awareness of financial planning as a careerpath.
• Women harbor misperceptions about financial planning.
• Women's reluctance to take professional risks may be keepingthem from entering the financial planning profession.
• Gender discrimination and bias exist within the financialplanning profession, likely resulting in women feeling unwelcomeand unsupported.

Other organizations are also studying and promoting the role ofwomen in financial services. At the Bryn Mawr, Pa.-based AmericanCollege State Farm Center for Women and Financial Services, themission is to advance women in financial services and we do itthrough research, education and other awareness-building effortssaid Director Jocelyn Wright, CFP. Among its research projects, thecenter is currently completing a study of female advisors'experience in the financial services industry.

Katherine Mauzy, a principal in branch development with EdwardJones in St. Louis notes that about 20% of the firm's financialadvisers are women, with recent hires in the 20 to 25% range. Inher experience, women do not gravitate to financial advisorycareers.

She cites comments from her daughter, a college student: “Shesaid that a lot of the kids who are getting majors in finance,etc., are thinking more along lines of investment banking, assetmanagement. They're not thinking of wealth management. And, so, Ithink we, as an industry, just have a great opportunity to get morewomen to understand the role.”

Michelle Lynch, vice president of the Network for Women Advisorswith Raymond James in St. Petersburg, Florida, voices a similaropinion.

“I think there's a huge awareness issue particularly as itrelates to women about financial services and particularly theadvisory role being a viable career option for women,” she said.“If you look across the industry, there's not a whole lot of strongfemale role models for women to identify with. It's just really notsomething that a lot of women are exposed to unless they havesomebody or know somebody in the business or happen to stumbleacross it.”

RecruitingStrategies

The industry's shift from transactions to advisory relationshipsand goals-based planning might make women more comfortable withwealth management, says Lynch, and it also reduces the variabilityassociated with commission compensation. But she cautions thatbuilding a sufficient income from asset-based fees is still adaunting challenge for industry newcomers.

Kirstin Turner, senior managing director-complex director withRBC Wealth Management in West Palm Beach, Fla., notes that 15 or 20years ago a new advisor could succeed by picking up the phone 200times each day and asking the person to buy a municipal bond.Nowadays the barrier to making client relationships is a lothigher, she believes. Consequently, she recruits women who bringexperience or relationships with potential clients.

“For example, bankers make great financial advisers (and)there's a lot of women bankers,” she said. “They actually excel inthe banking world which is so ironic that we're such a smallpercentage of the investment world. CPAs are another great source —that trusted adviser who already knows people that have money andthat invest. Sometimes military folks do very well — they've got agreat work ethic and they know people — or a retiree from a largecorporation that might know a lot of other people.”

College students enrolled in financial planning degree programsare another potential source of female candidates, says Lynch. Herfirm recently met with representatives from 13 colleges anduniversities that offer financial planning programs under the CFPBoard curriculum. One goal was to discuss adding a sales focus tothe schools' curricula so graduates would be better prepared forbusiness development tasks.

“It's great to be able to put a plan together and to be able tolook at the investments and identify that, but when the time comesto sit in front of a client, how do you close the business?” sheasks. “How do you get that client feeling comfortable withyou?”

Internships can help female college students determine iffinancial services is the right career choice. Clarissa Hernandez,CFP and MDRT member with North Star Financial in Denver has beenworking with interns since 2011. The internships provide marketingexperience outside the interns' natural market; it's not analyticalwork and it's not glamorous, she notes.

“You can teach someone how to market, but you just don't know ifthey're going to do it well or if it's going to be a discouragingthing for them until they actually get a taste of it,” she said.“Can you do the parts of this job that are not that glamorousfor the first three to five years? If they stick around through theinternship, usually the answer is yes.”

Business Structure and Networking

Sources maintain that business structure plays an important rolein helping women succeed, although they have different views on thebest structure. Joining an established team makes it easier for newwomen hires to get started in the business, says Turner. Clientswant a team approach to financial advice and women's growing rolein managing family finances makes women advisers' inclusion on ateam a natural fit. Some women prefer to operate solo, however,says Mauzy, because they can create the desired atmosphere in theirown office. That's the Edward Jones approach: Recently hired womenstart in an experienced adviser's office to learn the ropes buteventually go solo with a full-time sales assistant.

To reduce the risk of isolation among new women advisers in solooffices, each of Edward Jones' 200-plus regions has an adviserserving as a women inclusion specialist.

“The role is to help women get up and running, knowing thatwomen may have a different perspective on things,” Mauzy explains.“Maybe they have a different view on client acquisition, maybe theyhave more family life balance challenges of children and otherresponsibilities outside of the practice and how to manage that asyou're building a practice.”

Internal networks for women advisers also help new hires succeedand remain in the business. The Raymond James network has beenoperating for 23 years and provides practice management coachingand networking conferences to more than 940 women at the firm.RBC's Women's Association of Financial Advisors has been around for27 years and is open to the firm's women advisers with at least twoyears of production experience.

The group sponsors an annual meeting each fall and the first 150qualifying advisors who RSVP can attend, regardless of theirindividual production. WAFA also has a formal mentoringprogram.

“They will reach out to you and they will offer to partner youup with another female advisor in the firm to make sure that you'vegot a conduit,” Turner said. “I think we're the only one that hasthat formal mentoring program.”