By some standards, the financial advisory business is still largely a male domain. For example, the CFP Board reports that as of July 31, 2015, 23 percent of certificate holders were women. The American College of Financial Services notes that over the past five years, women earned 27.5 percent of the professional designations and 22 percent of the graduate degrees awarded.
Mentoring can help women entering the financial advisory business increase their odds of success. Working with an experienced advisor can help the new advisor climb the learning curve more quickly from both a business and technical perspective, maintain a positive outlook, and reduce the risk of early-career blunders.
Mentoring benefits the mentor, as well. According to the Million Dollar Round Table (MDRT), which sponsors a mentoring program for its members, participating mentors in the United States experienced on average a 9 percent increase in their qualifying commissions for the 2013 to 2014 period.
Retirement Advisor asked three women who have succeeded as agents, wealth managers and mentors for their insights into forming mutually beneficial mentoring relationships.
Succeeding by joining
“It was really a boys’ club when I started 30 years ago.” That’s how Jo Ann Favia, CLU, ChFC, owner of the Favia Group in Villa Park, Illinois, describes her early years as a financial advisor working for a captive agency.
Today, Favia (photo, left) runs a successful independent retirement planning and wealth management firm, but she notes that there just weren’t many female advisors when she started. She didn’t encounter any prospective mentors until she had been in the business for about four years, at which time she qualified for and started attending Million Dollar Round Table (MDRT) meetings. Her MDRT membership and active participation in the organization introduced Favia to some successful women advisors who were willing to mentor her. “They were really the ones that were mentoring to me where we became friends and kind of contacted each other on an ongoing basis versus day-to-day,” she says. “We would share sales ideas, business practices. It was just call them up and talk to them for an hour and say, ‘Hey, how are you doing this?’ Nothing on a formal basis, but just knowing that we had other women to call and have access to and discuss issues of being a woman in the business.”
Favia started mentoring other MDRT members when she served as a member and chair of the organization’s mentoring program. That program works to connect new members with seasoned professionals in their local areas around the globe.
Mentoring benefits both parties, Favia emphasizes. She cites her purchase of another advisor’s business, which was owned by a 70-year-old fellow MDRT member. The experience of mentoring Favia about his business reenergized him.
“He was almost ready to retire and we had talked about me purchasing his business but through working together, he got excited again about contacting people,” she says. “You get set in your ways of how you’re doing things and then there’s a renewed energy and renewed life and different ways of looking at things. You get excited about it again because now you’re doing what you like to do — going out and seeing people.”
But mentoring relationships aren’t guaranteed to succeed, she cautions. While there needs to be a personal chemistry between the parties, she believes it’s a good practice to have a written agreement in place at the start.
“Have the end in mind — knowing how you’re going to unwrap an issue if things don’t work or even if things do work — you need to have the end in mind,” she advises. “Think it all through. Like in any type of buy-sell arrangement, you need to talk through worst-case scenarios.”
As Favia advises, it’s vital to discuss the following issues up front:
Whose clients are they?
Who buys the business?
What if things don’t work out, who’s responsible for the assets?
How is the transition put in place?
What is the commission split on new business?
“I think you have to open up communication,” says Favia. “It’s so important to the success of the transition.”
Working with a mentor from the start
Barbara Pietrangelo, a financial planner with Prudential in Grand Rapids, Michigan, has always been in a mentoring relationship. When she started her career in January 1994, she did joint work on every case with a more experienced woman advisor in her office.
The strategy worked. “She went on every appointment with me for basically my first two years in business,” Pietrangelo (photo, left) recalls. “And, I always jokingly say that the guys in our office always said, ‘Are you that dumb you can’t go it alone?’ But, I ended up the first two or three years always being ranked at Prudential like number two or three in the country after splitting all my business.”
The relationship worked because the mentor brought a different skillset to the relationship. For example, if the client responded that he or she didn’t need a particular solution, the more experienced agent knew which questions to ask to uncover client needs. Pietrangelo says that even as a new agent she was good at prospecting and had no trouble getting in front of people. But she lacked insurance experience, which the mentor had.
“Early on, I would find people to talk to, but I didn’t know what questions to ask or I didn’t know how to identify their needs properly,” she explains. “My mentor had a pretty good background in identifying needs and helping figure out what people needed and wanted and how to best serve them. We didn’t always do every appointment together but … we did an awful lot and she’d listen and she would ask the right questions and she’d help me develop my cases. It gave me a good background on how to really pay attention to clients and serve them well.”
Pietrangelo presents at both Prudential and MDRT sessions and those presentations helped lead her to become a mentor after audience members approached her. She currently works with several women and several men, and those mentoring relationships started as a result of her speaking to their agency or group. One woman she’s mentoring works in Ohio and two others are in Boston. They get together in person when Pietrangelo is in their areas but otherwise most of the contact is via email and phone.
She also cautions that some attempts at mentoring don’t work out. “I always encourage people, ‘if you’re trying to find a mentor, it may take more than one try to find a relationship you’re comfortable with,’” she says.
Finding common ground between the mentor and mentee is vital, says Pietrangelo.
You need a connection where you can talk freely with one another
You need a mutually-confident relationship so you can share successes and disappointments without fear of recourse
You need mutual respect in the relationship
To find a mentor or mentee you’re compatible with “sometimes takes more than one try,” says Pietrangelo. She encourages advisors to be bold and cut ties in a mentoring relationship that’s not working. That’s when it’s time to “say thank you for what you learned and then find a relationship that fits your needs better.”
Phyllis Shelton, (photo, below) president of LTC Consultants in Nashville, Tennessee, accredits much of her success as one of the best-known long-term care insurance advisors and trainers, to mentoring.
She started with John Hancock in 1988, previously having worked as a marketing manager for a local health insurer. Her manager and mentor at Hancock encouraged her to focus on long-term care insurance (LTCI), which the company had just started to sell: “He was a great coach and we really hit it off and he made me believe that this was something I could do.”
Shelton took on the mentoring role herself around 1996, five years after she had started LTC Consultants. She had received a contract from State Farm, but the company was entering the LTCI business for the first time and needed to train advisors across the country. Virtual training technology did not exist then so Shelton had to train the trainers, effectively becoming their mentor. What’s impressive is that several women Shelton worked with, including Catherine Dove, Betty Doll, Lauryl Chalfin and Shelly Kapfhammer, have gone on to considerable business success.
Shelton echoes Pietrangelo’s comments on the importance of mutual respect between mentor and mentee. “When you’re seeking a mentor, you have to make sure it’s somebody you truly and honestly respect and, then, they have to respect your opinions on how it all works,” she says.
“And, you’ve got to have drive. If you’re wanting to be mentored, you have to listen and do what that person tells you because otherwise if you don’t turn out well, then you’ve wasted that person’s time and that’s not fair either. But, if you can find a role model that you really respect and want to work with, then I think you can develop a lot faster than you would if you worked alone.”