Recruiting existing female advisors in the male-dominated field of financial services is simply a game of musical chairs. Ann Hughes, consultant-with-a-mission, says this game must stop.
With a steely resolve, Hughes is taking brokerages to task for their heavy focus on swapping female FAs firm to firm. That’s not bulking up the skinny ranks of female advisors, contends the authority on women and financial services. Instead, she says, the industry must boost the total number of women by bringing new female FA trainees into the fold.
Hughes, 43, is traveling coast to coast speaking at firms including Cetera, LPL Financial and Morgan Stanley to deliver her message: Make financial services a place where women — both advisors and clients — can feel at home.
Forthright but with a gentle edge, Iowa-born Hughes has thrived in the industry for nearly 15 years, including a decade in leadership posts at ING and Sammons Retirement Solutions.
She launched her own company, The Female Affect, four years ago to help women advance in financial services and help firms better serve female clients. She is armed with a master’s degree from Iowa State University in organizational learning and human resource development.
Hughes’ consciousness-raising speeches and hands-on coaching haven’t come a moment too soon: The total number of FAs nationwide dropped 12% from 2008 through 2013, the most recent year for which figures are available, according to Cerulli Associates research.
Her own career is a prime example of female success in the rough-and-tumble world of financial services. As the only female national sales manager of a large annuity company, she led ING Annuities’ sales team to record results. After that, at Sammons Retirement Solutions, she oversaw investment options, acquisition of distribution relationships and marketing, among other key areas.
In a recent phone interview with ThinkAdvisor, the Dallas-based peripatetic coach — author of a new children’s book, “Long Distance Goodnight Kisses” (Prince-2015), written with business-traveling parents in mind — put the spotlight on what firms and female FAs can do to help both themselves and women clients. Here are excerpts from our conversation:
Why is there a shortage of female FAs?
Growing the overall pie is the issue. The number of female financial advisors continues to go backwards. It’s up to the industry to make it a place to which all people can gravitate and succeed. We need to make progress so that the industry is diverse and representative of the client base.
Why aren’t there more women helping people invest?
The primary reason is that in college or business school or when considering a career change, women don’t even consider the profession of financial advisor. It’s not something that crosses their radar screen. Women often think that the industry doesn’t “get me” as a female. A Boston Consulting Group study found that many times women would rather buy a used car than deal with the financial services industry.
Seems, then, that firms aren’t trying to cultivate female advisors in the most effective way.
Both wirehouses and independent broker-dealers need to get women into the industry as first-time advisors rather than participating in big recruiting efforts to move them from one firm to another. That’s just swirling the pie around. It’s certainly easier to recruit an existing female advisor from Firm A to Firm B than to pave the way and create a new advisor to enter the industry.
Where should firms look for female advisors-to-be?
They should focus on women with parallel careers in real estate or banking, or those who are CPAs, because they’ve already been exposed to [areas] of financial services. Until we reach out to women in those careers or those just entering the work force from an MBA program, we’re not increasing the pool of female advisors – we’re just trading them among firms.
But women who have had successful careers in other fields, aren’t keen to start at the bottom again in an entry-level job. They feel they’ve paid their dues.
Many female advisors that I’ve worked with attribute their success to starting as an advisor assistant. It gave them confidence and experience to develop a successful practice of their own. That training period can provide women with a steady income, industry knowledge and client contacts essential for their own productive practice.
What else can be helpful to women who are new to the industry?
We’re seeing that females entering the business start to have more success if they join a team. The wirehouses are a wonderful channel — if you’re successful there, you can be successful anywhere. But they’re hard for both men and women to make an entree. When women join a team and become part of the whole by sharing accounts and interfacing with clients – understanding the industry before they have a book totally of their own — they’re finding more success.
What concrete steps should be taken by women who want to train as FAs?
The first is to be very well aware of what you’re getting into — understand how difficult this industry is. If you don’t have a good sense of what the job is, you’re likely to fail. There’s an impression that if you have contacts and friends and family with money, they’re going to suddenly invest with you. That’s not accurate. Oftentimes they already have an advisor of their own. So you won’t be able to rely on friends and family to give you business to get you through the first year or two.
What should be done before accepting a job offer?
There are questions she needs to ask the firm: What is your minimum? Am I allowed to work with a diverse set of clients regardless of their asset level? How much training will you provide me with to get my licensees and understand the industry? How long do I have to do that? Will you allow me flexibility in my work hours? What are the expectations of the assets I’m going to be bringing in? She needs to know upfront how long she has before the firm says, “Okay, you haven’t raised enough assets. You need to move on.”