Wanted: female financial advisers
Women need financial advice, and the financial planning industry needs more women, writes AMP Horizons Academy's Tim Steele.
A profession should broadly reflect the demographics of society.
Women are significantly under-represented in the financial planning profession, with only one quarter of financial planners being female. So what are we doing to correct this imbalance?
Women and financial advice
According to a 2009 Harvard Business Review article “The Female Economy”, women control about $20 trillion in annual consumer spending globally, but it’s “still tough for women to … get financial advice without being patronised”.
We also know that women’s proportion of global spending is increasing, so what does this mean for financial advice and how can we make sure we are providing the right kind of advice?
Recent research from CoreData shows that while women are gaining more control over their finances, many still feel financially insecure.
The research shows that one third of women – 35.1 per cent – feel financially insecure, compared to just 21.5 per cent of men.
And, 37.5 per cent of women said they often have difficulty making decisions about investing money, compared to only 26 per cent of men.
The gap increases around the issue of retirement, with two in five women (41.7 per cent) saying they are unlikely to have the level of wealth required to finance their retirement, compared to 29.1 per cent of men, according to CoreData.
More broadly, just one in five people (21 per cent) have used a financial planner in the past 12 months, so to bridge this advice gap, more people – both men and women – need to join the profession, and we need to think a lot harder about what appeals to those Australians who may hesitate about seeking financial advice.
The need for more female financial planners
The data is irrefutable: women need to be more empowered when it comes to financial matters.
We can begin to address this issue by attracting more women to the financial planning profession and by having a better understanding of what makes financial advice attractive to customers.
The greatest opportunities to reach women are during trigger points such as marriage, childbirth, and job changes, because women are more likely than men to be making the financial decisions around these events.
We know that while many women do not necessarily have a preference between a male or female financial planner, a significant proportion do.
In a world where there is no shortage of people that need financial advice, encouraging more women to become financial planners can help achieve the greater goal of providing more advice to more Australians.
More importantly, in a world where there is no shortage of people that need financial advice, encouraging more women to become financial planners can help achieve the greater goal of providing more advice to more Australians.
Building long-term, professional relationships and being a trusted adviser is crucial to having a successful career in the financial planning industry.
It is no surprise that a recent Harvard Business Review study of 7,000 leaders found that women particularly excel at building relationships.
The study found that women are great at displaying integrity, developing others, inspiring people, collaborating, and working in teams.
Of course, these are attributes we see in the workplace amongst both men and women, but it seems that women – according to the research at least – have the edge.
Just as with other well-respected professionals, interpersonal skills complement the technical skills for financial planners, ensuring a relationship of trust is built.
This trust ensures the advice provided is communicated so as to be understood, respected and valued by the person seeking the advice.
We wanted to learn more about Australian women’s perceptions of financial planning as a possible career. In September 2011, we commissioned independent employment researchers to conduct a series of focus groups in Sydney and Melbourne.
The findings showed that women saw the profession as inflexible and incompatible with their lives.
The findings showed that women saw the profession as inflexible and incompatible with their lives.
They also considered the industry to have a predominant macho culture and this was, of course, a deterrent.
Some of the comments made by the focus group participants included:
- “I don’t want to be a woman in a man’s world.”
- “There’s no emotion – the role is about numbers.”
- “It’s a male-dominated, old-boys’ club.”
These perceptions are concerning, and our efforts are focussed on negating any deterrent to people choosing a career in financial planning.
This is not an altruistic ambition – it is driven by the knowledge that women can be very successful financial planners. Indeed, our internal data for planners in Horizons highlights that on most of our productivity metrics, women outperform men.
Women wanted as financial planners
Attracting and retaining top female talent is key to the continued success of the financial planning industry and to creating a competitive advantage for financial planning firms.
More broadly, there is tremendous opportunity for the right people to be successful and to attain the workplace flexibility they desire.
If they choose, for example, to start their own financial planning practice, they can select the hours they prefer to work.
The challenge has been to create an induction program that makes financial planning an attractive career choice for more women.
Until now, these programs have been full-time, and inhibitive to those who have pressures placed upon their time. A lack of flexibility has meant the industry has missed out on some very talented candidates.
Flexibility, significant earning potential, intellectually stimulating work and the opportunity to positively impact lives are job attributes that should be appealing to anyone and are, indeed, the attributes of a career as a financial planner.
Many women don’t consider this a career option, so we are working to spread the word and introduce them to this wonderful profession.
My aspiration is to someday report that the percentage of female financial planners in Australia reflects the proportion of women in society.
Tim Steele is director of AMP Horizons Academy.
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