Gender Diversity Is Great for Your Business
For many financial advisors, building a practice with greater gender diversity isn’t only about fairness. They see it as a potential competitive advantage.
“Women are well suited to this business because they’re nurturing, good at relationship building and maybe a bit less focused on trying to impress than on listening,” says Sharon Oberlander, head of the Oberlander Group in Chicago, a Merrill Lynch team that manages around $800 million.
Most advisors seem to agree with her. An FA-IQ poll conducted last week found that 56% of readers who weighed in believe “women see the world differently from men, so their perspective makes the team sharper,” and 21% think “women’s natural empathy” helps them forge enduring relationships with their clients.
Oberlander, too, thinks gender diversity on advice teams leads to superior service and better client retention. That’s one reason she often asks a male colleague to join her in important client meetings. “When we compare notes afterward, I find we’ve picked up on different things, and I think together we don’t miss much,” she says.
She feels her profession should do more to encourage women to join, and her view is colored as much by business sense as by solidarity. “I don’t think the industry fully understands the importance of reflecting a client base” that, with so many baby boomers heading into retirement and seeking to transfer assets to their successors, is in greater need of sound financial advice than ever, she says. In her view, there should be a female advisor for every male in the business.
Long Way to Go
As of last year, only 25.7% of “personal financial advisors” were female, according to Catalyst, a New York-based organization that advocates for “more inclusive workplaces.” But this doesn’t mirror the wealth market. Women already control most of the personal wealth in the U.S., female-owned businesses pump $3 trillion a year into the economy, and women are due to inherit roughly 70% of $41 trillion in intergenerational wealth transfers expected to occur in the next forty years, says a 2012 report in the Harvard Business Review.
Perhaps with these statistics in view, the CFP Board, which governs the Certified Financial Planner designation, is out to end a “feminine famine” it sees reflected in the fact that only 23% of CFPs are women. Again, though, the idea of getting more women aboard is framed in terms of strategic advantage, not redressing inequality.
Although the recent FA-IQ poll suggests that most advisors consider gender diversity a positive in business terms, 23% say that “a good advisor is a good advisor, regardless of gender.” But this attitude is by no means exclusionary. For instance, Elaine Bedel of Bedel Financial Consulting in Indianapolis says “financial planning is a great profession for women because of their listening skills, patience, empathy and attention to detail.” But she sees an advisor’s core competency — putting the client’s interests first — as gender-neutral.
As a result, when hiring a client-facing professional, she and her senior colleagues seek the best fit for the role instead of trying to fill quotas or strike balances. Just now, her planning team is slightly skewed toward women, while her investment team is all male.
For Bedel, whose firm manages about $850 million, being male or female “makes no difference” in matters having to do “purely with running the business” — hiring, firing, strategic direction, etc. She thinks gender diversity supports effective client service and the ability to strike a balance between clarity and thoroughness in product launches and other business initiatives. “I think we make better decisions for having men and women” in high places at her firm, she concludes.