Only about 30% of U.S. financial advisors are women, and their share is dropping, according to a new survey from Pershing LLC. And, it says that firms should be working to reverse that trend.
The firm reports that female advisors remain woefully underrepresented in the financial industry, and points to several factors that it says are driving the decrease in women advisors. For one thing, there is a significant pay gap between men and women, with women advisors earning just 58¢ on the dollar compared to their male peers. It suggests there are cultural barriers at the executive level, and more than a third of advisors are less than a decade from retirement.
According to the study, female investors are significantly more likely to engage advisors than men (46% vs. 34%). Additionally, nearly two-thirds of female millionaire investors and 82% of female ultra-high-net-worth investors prefer working with an advisor, it says.
“While attrition is eating away at the number of current advisors for a number of reasons, the need for investment advice continues to grow,” said Kim Dellarocca, head of practice management and segment marketing at Pershing. “In fact, we expect that financial services firms will need to recruit hundreds of thousands of new advisors over the next decade to meet growing demand. Financial services businesses would be well-served to better recruit and retain women advisors to help fill this need.”
The firm notes that some financial firms have begun new programs to enhance the role of women advisors, such as launching an internal affinity group to help promote mentoring; undertaking efforts to help developing advisors improve their businesses; and, starting a talent development program.
“Women advisors are critical to the future of wealth management,” Dellarocca added. “The good news is that firms can unlock a variety of new market opportunities, and create loyal and satisfied clients in the future, by investing in – and cultivating – talent today.”