New research from global research and consulting firm Cerulli Associates finds that women offer a solution to the industry’s impending succession crisis and talent shortage as advisor retirement accelerates. “Women represent only 15.7% of the 310,504 financial advisors in the industry,” states Marina Shtyrkov, analyst at Cerulli. “Women remain outnumbered in financial advisor communities despite efforts to recruit more female advisors; only 16 in every 100 advisors are women.”
“Close to 40% of advisors plan to retire within the next 10 years, leaving the industry scrambling to groom replacements,” Shtyrkov explains. “Women present an untapped talent pool that offers a solution to the industry’s recruiting problems. By expanding their focus and altering their recruiting strategies to appeal directly to female candidates, broker/dealers (B/Ds) and RIA custodians can help fill the gaps left by retiring advisors.”
The reasons driving women to become advisors can differ from those that inspire men to enter the industry. “Nearly all female rookie advisors consider the desire to help people reach their goals to be a major factor for becoming an advisor,” Shtyrkov says. “B/Ds and custodians will have better success recruiting prospective women advisors and safeguarding against a future headcount shortage if they accentuate the social impact that an advisor has when working with people to achieve their financial goals.”
“A B/D’s most powerful tool in recruiting female rookies is its existing group of established women advisors,” Shtyrkov adds. Cerulli believes that established women advisors can dispel negative perceptions about the industry that deter some women from considering advising a career option. By sharing their experiences, these women can address misconceptions about what it means to be an advisor as well as offer transparency into the profession.
These findings and more are from the first quarter 2017 issue of The Cerulli Edge – Advisor Edition, which discusses the role women advisors play in an evolving wealth management landscape, including how to attract more women to the industry, how to support established women advisors, and the concrete business advantages of gender diversity.