From the November 2005 issue of Investment Advisor • Subscribe!

Gender Gains

Women at work in the financial industry, especially the independent advisor community, are a force to be reckoned with

There is no question that women are working everywhere in the investment business, as advisors, planners, traders, analysts, economists, investment strategists, portfolio managers, company presidents, and in countless other professional capacities. Perhaps it is most evident in the independent advisory business. Women have embraced the advisory business, and vice versa, from its inception, and for good reasons. It is where knowledge, long-term thinking, and a consultative approach--strengths for many women--rule, and where independence can help weave flexibility, control, and balance--common threads for the women we spoke with--into the fabric of your business.

For the third part of our three-part series Gender Matters, IA talked with women who are in the investment business about what they've experienced, and got plenty of insight into differences in the ways in which women and men approach the investment business and their clients, differences between firms, and how things have changed over the years--or not.

One of the more surprising findings was that although most large firms have a diversity initiative in place, and many have an area that target-markets to women, there seems to still be a strong "old boy network" alive at the wirehouses, a conclusion supported by a report from the Securities Industry Association that shows very low percentages of women in key posts at brokerage firms. According to the 2003 Report on Strategy, Development & Demographics, a survey of small, medium, and large securities firms by the SIA, the overall percentage of women in the U.S. securities industry workforce declined from 43% in 1999 to 37% in 2003. That number, however, does not distinguish between senior and junior level jobs. At each job level, the statistics may be more revealing (see "Women at the Wirehouses" table below).

One wonders whether the number of women in key posts is so small because it will simply take more time for women to become senior enough to fill these jobs, or if some women have made a conscious choice not to work in an environment that may be less flexible or balanced than the alternatives, or if women are systematically being excluded. Are some talented women who had started on career paths toward key posts in the investment industry choosing to back off--temporarily or permanently--because of work-family conflicts? If so, why is this environment so inhospitable that that's the choice they've made? Are enough young women in the career-flow toward the key jobs in the investment industry? Are seasoned professionals welcomed back after taking time off for family, if that's what they choose?

Banks, insurance companies, and some smaller national and regional investment firms seem to have a better record of achievement in attracting, retaining, and advancing women. IA talked with many advisors who left the wirehouses for some of the smaller national or regional firms. They say they're much happier now. But why are many women happier at the non-wirehouse firms? Is it the work-life balance conundrum? Is it the more independent affiliation or regional nature of some of the firms? Why do some relatively small firms, and some very large banks and insurance companies, seem to "get it" while others do not? When Working Mother magazine published its list of the "Working Mother 100 Best Companies," 30 financial companies made the 2005 list, but only one, Prudential Financial, is on the magazine's "Top 10 Best of the Best" list.

Balance was the almost universal issue for the women I talked with for this article. Family was a theme for many; some had children that were grown or almost grown. Quite a few were brought into a brokerage or advisory business by their mothers or were in the process of bringing their own grown children into their advisory business. Some had younger children and were achieving a balance that seemed to work well for all involved, with enough autonomy and support from the firm they were affiliated with. Some of the women originally went to work in their husbands' practices, ended up fascinated with the business and went on to achieve top-performance status.

The evolution of the independent advisory business model would seem to favor the way many women think--and work--with more of a consultative approach rather than a transaction-oriented one. Women "are more collaborative in their process than men, are most concerned with 'the harmony of the whole,' that is, everyone feeling happy, satisfied, and connected. They don't compartmentalize like many men do, so they look to cultivate relationships, both at home and at work, where more of the clients' needs are met, not just the bottom line (making money)," says IA columnist Olivia Mellan, psychologist, business coach, and author of The Advisor's Guide to Money Psychology, with Sherry Christie (Investment Advisor Press, 2004). "Of course, there are men who function like that, too--just not as many of them."

About one-quarter of all CFPs are women. That's been the case for almost the last decade, according to Virginia Jo Dunlap, director of external relations at the Certified Financial Planner Board of Standards in Denver, who says a steady 24%-25% per year of CFP credentials have gone to women since 1995. "Women make up 30% of FPA membership," says Heather Almand, director of public relations at the Financial Planning Association, also in Denver. Eric Gordon, director of public relations at The American College in Bryn Mawr, Pennsylvania, reports that currently 28% of Chartered Life Underwriter (CLU) designees, and 25% of Chartered Financial Consultant (ChFC) designees are women.

The Firms That Really Get It

This is the 11th year that Raymond James has hosted a Women's Symposium for advisors, women all, who have achieved a certain level of production, assets, and competency. Women who have just finished a months-long training program are invited too. Each new advisor gets plugged into Raymond James's Women's Network and a woman who is a more senior advisor becomes her mentor.

Dennis Zank, president of Raymond James & Associates, opened the Women's Symposium in October by introducing women who had been recruited from other firms, including Morgan Stanley, Merrill Lynch, and UBS, and concluded by mentioning that "the average production of the recruited financial advisors is $413,000, with assets under management north of $57 million." Not too shabby. I talked with many of the women who chose to make the transition from the wirehouses. All said they were much happier now, citing the Women's Network, the Symposium, and other initiatives along with leadership that made them feel welcome and valued, something they said was lacking at their former firms.

One of the women that Raymond James recruited this year and introduced at the Women's Symposium is Colleen Schon, now a senior VP, investments, and retirement plan consultant at the firm's branch in Auburn Hills, Michigan. She was working for some local credit unions when her mother-in-law, who was a CPA, suggested Schon for a job at Merrill Lynch. Schon started as a sales assistant and an annuity rep in Merrill Lynch's Flint, Michigan, branch in 1986, took a year off when she had her second child, and went back in 1989 as an insurance and annuities specialist in the Bloomfield Hills office with about 200 brokers--for about five years.

Schon was already Series 6 licensed for the insurance and annuities business. "I got Series 7 licensed on my own time, which was really interesting, having two young children at home and trying to study after-hours, and did it in a five-week period. My mentor was looking for a partner, and I worked with her for about a year, and we moved over to Paine Webber. We doubled our business in about two years, with her teaching me the other side of the business, and we went on from there. We moved over to Raymond James about six months ago, from UBS; [it's] the best thing we could have done. My team manages about $150 million in assets. We do a lot of retirement and wealth planning work with CPAs and attorneys." She says she is happier at Raymond James because of the company's management style. "Merrill Lynch and UBS were just not the same--they still have the old boys' network. It's a big change from the old boys to a family-style business." Schon agrees that there are big differences between how men and women work--"some of the newer male FAs are definitely buying into the [consultative] route, but if you get [a man] that's been in the business 10-plus years, it's product; it's a transaction business and 'I'm going to call and give you the hot stock of the day' business," not advice or planning.

"I think becoming an advisor has been more a condition of the markets for me. The volatility of the stock market--I just don't want to sit there and watch this thing go up 100 points and down 100 points. I want to know that I can go home at night and sleep; that I've done a plan for my clients instead of one thing that I've lost $2.50 today in for them," says Sandra Holbert, senior VP and wealth management specialist at Raymond James in West Palm Beach, Florida. Holbert has been in the business for 25 years. She was an elementary school teacher and her husband was a broker with Merrill Lynch in Chicago. He was recruited by Raymond James to be the branch manager of the West Palm Beach office. Holbert taught elementary school in West Palm Beach until they had their second child and stayed home for a bit. She went to work part-time in her husband's office, and "the next thing I knew, I was getting licensed. In 1981 I got my license, and my husband and I worked together as a team for 14 years. My job at that time was to assist him as branch manager." She took over the business when he retired in 1995. "Now I have both of my sons with me, and we are the Holbert Wealth Management Group. I've seen a lot of changes. I can remember when [to qualify for] the recognition clubs such as Chairman's Council and President's Club, [you needed] $100,000 gross, and they had to drop it to $90,000 to get 10 members. That's when mutual funds and limited partnerships were 8% pays."

Compared with Schon and Holbert, Darlene Cress is a relatively new advisor. Now a wealth management specialist and financial advisor at Raymond James in Grand Rapids, Michigan, Cress had a totally different prior career: 19 years with a large Michigan company, the last eight of which were managing the president's office and her own staff of six. She got to a point in her life where she wanted to "get off that merry-go-round." She joined a firm that did 401(k) business and has "never looked back." Cress has been an advisor for three years, first with American Express and now with Raymond James. Her advice to newcomers is to get up and "embrace the day. This is a hard business, and it's not a steady paycheck. I took a big pay cut to get into this business to build it. Don't let others bring you down. My Dad always said 'Smile at adversity' and I think clients relate to that."

"I had been a stay-at-home-Mom for about 16 years, and six years ago I got divorced," said Mary Gonter, a financial advisor in the Venice, Florida, branch of Raymond James. Four years ago she wanted to get back into the workforce. "It wasn't financially motivated, but knew I was young and had a whole life ahead of me, so I went back and got my MBA in finance, and really liked the planning side. I wanted something where I could jump in quickly, work really hard, put in the hours early on, and hopefully it will pay off." Until recently Gonter had "never realized that I like the recognition, and four teenagers don't give you that. I really enjoy the feedback from clients."

Gonter says that being a single Mom makes it easier in some ways to concentrate on her career, "I work hard at work, I work hard at home. I have no social life." All the women in the group laugh and nod knowingly. "I almost feel that I've succeeded because I don't have the pressure of a boyfriend or husband at home."

On Balance

Everyone I talked with agreed that women work very hard to achieve work-family balance. In fact, it was one reason Cress left what she was doing before--"I was on call 24/7, I had a beeper, cell phone, and I had two kids in high school. Now I have two kids in college, one on a soccer scholarship and [in four years] I've not missed a game." Control is another reason Cress likes being an advisor. "The big thing for me--and for my husband, who has been tremendously supportive, and that's so necessary in order to do this--is I want to be in control."

Schon concurs. "You're working with your clients and you are a team. I always say they're my extended family--those clients really do become an extension of you. To anybody new in the business, balance in life is so, so important--you can love what you do but cannot be married to your business," she says. "My family is extremely important to me--they're truly the extension of who I am--I have to have that time with them. I want that evening time with my family. Though my kids are grown and leaving me," Schon adds, grimacing and chuckling, "it's just really, really important to have balance in life."

"It's been great for me," says Holbert. "My husband and I've been married almost 38 years, and since I joined with him, it's been great because we've been able to enjoy the boys--both my boys are baseball players, and in Florida they played baseball year-round. We flew to tournaments--our whole social life was baseball; all our friends were baseball Moms and Dads. When we come home we have these conversations--he knows my clients, I know his clients; we know the products together. He was involved--it's been wonderful." Holbert adds, "I'm at the point where Thursdays are blocked off because I'm playing golf, and everybody on my team knows I'm not there on Thursdays."

Other Routes to Success

Barbara Krumsiek got into the investment business after college, 31 years ago, "I had mathematics academic training. I really was just looking for a job in the '70s and was hired by The Equitable as an operations research analyst, which is like an in-house consultant." She worked with the chief investment officer, and "that is how I got into the investment business, and I just loved it. I was an analyst for seven years and had the good fortune to be on the scene when both the IRA legislation came into effect in 1981, and then the 401(k) was discovered, around '82." Krumsiek ran some funds for The Equitable. Alliance Capital bought that part of The Equitable in 1992, and Krumsiek stayed on at Alliance until 1997 when she joined Calvert Group. As CEO, president, and co-chairperson of Calvert, Krumsiek runs the largest group of socially responsible funds in the country. During her tenure as CEO, assets at Calvert have climbed from $5 billion to more than $10 billion under management.

Krumsiek believes there are two important things that are necessary for women to succeed in any work environment. "First, a flexible work environment. Is it possible to bring into balance all the different roles that you play in life--wife, mother, executive, engaged in my own community? Early on in my own career, you pretty much had a very set work schedule and a set work environment. Now I think all employers are focusing very heavily on how to create flexibility, whether it's providing tele-work opportunities, flexible schedules during the day, part-time opportunities--and this is not even just for women, but generally for people who may be juggling eldercare or whatever, [who] for a period of time would like a part-time situation.

"The second thing that's changed, maybe because we're in such a relatively high-employment situation with such demand for knowledge workers, is that there's much more of an emphasis on having the workplace be a place where people can feel passionate and satisfied; the feeling that you don't have to leave behind who you are as a person." She adds, "I think financial services have made strides along with the rest of the U. S. employer force, but probably we're not the leaders."

"There's still a knee-jerk reaction that women are less likely to want to be in jobs that have perhaps a lot of demands with travel, and demands for a lot of hours, and if we don't get those entry level opportunities and stick with it, for better or worse, the trend that has been noted is that women are more likely to leave mid-career--10 to 15 years into a career. Frankly I think some of it has to do with the environment they're working in. I don't think it's all one way or the other--people say 'Well they're choosing to spend more time with their families,' I don't know if that's the whole story," says Krumsiek, adding, "it starts at the top; the CEO and the board have to be conscious of the company creating a climate that will be supportive of careers for all, and I do think having greater diversity at the top helps."

The key, say the women I talked with--is that a career as an advisor allows you the flexibility to create that balance. "I can tell clients--'I'm going to be gone tomorrow, but let's get together the next day.' When you're working for someone else, you don't have that flexibility," says Cress. "After 19 years in my old job--and I loved it--it was time to get control again."

Schon agrees: "It's all the control factor--we can control what we do, from the business standpoint, to the family standpoint, to the personal standpoint, (even though that's always last) you have control over it, and it's wonderful," says Schon.

Staff Editor Kate McBride can be reached at kmcbride@investmentadvisor.com.

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