The clock is ticking for the wealth management industry.

The average age of a financial advisor has been steadily increasing and now stands above 50, with nearly one-quarter planning to retire in the next 10 years. The challenges created by this pending retirement wave quickly come into focus when this attrition is contrasted against data showing that just 5% of financial advisors are younger than 30.

Against this backdrop, it is no surprise that a significant amount of industry resources are dedicated to strategies designed to attract and retain younger talent. While the results of these efforts won’t be known for years, it’s a safe bet they will fail to adequately leverage the opportunity ahead (as $40 trillion moves from baby boomers to their heirs in the great wealth transfer) without a more concerted focus on another underrepresented demographic in the industry – women.

Using the Certified Financial Planner professional designation as a proxy, just 23 percent of CFPs are women – a number that has remained virtually unchanged for the last decade. Given the length of this plateau and the rate at which women are underrepresented, the challenge of attracting women to the financial advisory profession can’t be solved without addressing the root causes.

For firms willing to accept that diversity and inclusion are more than just buzzwords, the path toward better gender parity in wealth management starts with 1. dispelling misperceptions that the profession is mainly about selling data-driven stock stories and 2. disrupting the existing apprenticeship model.

More Than Math

As an industry, we could all do a better job of explaining what we actually do.

A lack of familiarity with the breadth and depth of services provided by advisors has helped fuel misconceptions that that the industry is primarily made up of number crunchers. This confusion, coupled with studies showing that girls begin steering away from math and science as early as middle school, could shed light on why there aren’t more women in wealth management. And while biology is not destiny, the reality is that financial advisors are not mathematicians in disguise.

An advisor’s role in helping clients live better lives by strengthening their financial futures with holistic planning that brings long-term goals within reach extends far beyond addition, price-to-earnings ratios and compounded interest. Similarly, the skills and tools needed to gain investors’ trust and loyalty (empathy, strong interpersonal skills and candor) have little to do with numbers.

To ensure that the profession attracts as many talented candidates as possible, we must do a better job highlighting financial planning as a holistic discipline where good relationship and communication skills are just as important as math and technical competence.

Moving Beyond Mentorship

While the benefits of informal and formal mentoring programs within the wealth management industry have helped countless women and their firms in recent decades, more can be done by both women and men in leadership positions to help promote the visibility of successful female advisors and drive their strategic endeavors.  

Mentoring is a term that has come to encompass showing someone the ropes, helping them get acclimated, providing a sounding board and offering advice and guidance; but somewhere along the way, the connection between mentoring and getting developmental assignments has been diluted. 

Sponsorship on the other hand, entails fighting to get somebody a promotion, mentioning her name in business development and leadership meetings and making sure she gets the opportunity to tackle visible, developmental assignments. Given the higher level of commitment, strong sponsorships must be built on solid foundations of mutual trust and admiration to succeed.

It is also important to note that a mentor can be found anywhere in a firm’s hierarchy while a sponsor must be well-positioned to reach down and pull a person up through the ranks. However, in both cases, men and women share an equal role and responsibility in getting involved to level the playing field.

Path Toward Parity Paved With Opportunity

To say that the financial advisory industry is headed toward an untimely talent shortage is an understatement. If the next generation of financial advisors isn’t more diverse than the current generation, the opportunity created by the great wealth transfer can’t be fully realized. However, for those willing to move beyond talk and make a real commitment to increasing the percentage of female financial advisors at their firm, the path toward gender equality could lead to one of the greatest opportunities of our time.