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September 29, 2017 at 01:28 AM
Women are more likely than men to run financial planning practices, according to the September 2017 issue of The Cerulli Edge – U.S. Monthly Product Trends Edition.
Female advisors in the early stages of their career report entering the profession because they have an interest in helping people reach their financial goals. This is a major factor for 94% of women and 84% of men in the industry.
While both genders consider this factor important, women are more likely to be highly driven by this motivation.
Comparatively, an interest in investment topics is less likely to inspire women to become financial advisors than it is men (59% for women versus 91% for men).
“For advisors who enjoy working with clients toward goals, the goals-based planning process allows them to navigate a client through the emotional tradeoffs of investing and setting meaningful milestones,” the report states. “A comprehensive wealth management process is also more likely to emphasize the softer aspects of a client’s financial well-being, such as family dynamics.”
On average, Cerulli finds that female advisors tend to be more interested in engaging with clients holistically than measuring a product’s performance or constructing a portfolio in isolation.
Women’s preferences for financial planning and lesser interest in investment topics are also reflected in the types of practices they operate.
The report finds that these early-career sentiments continue to play out in the business models advisors settle into further in their careers.
Cerulli examined the principal owners and senior financial advisors of different advisor practice types, segmented by gender, and found that women are more likely than men to run financial planning practices and less likely to focus exclusively on asset management as money managers.
One-third (31.3%) of women who run firms are financial planners, compared with 21.6% of men. Only 6.4% are money managers, less than half the percentage for men. And only 2.9% of women are wealth managers compared with 6.2% of men. Nearly equal percentages of men (59.1%) and women (59.4%) are investment planners, the report finds.
“An advisor’s chosen business model reflects their service menu and potentially their client core market,” the report states.
Perhaps another indicator that women tend toward financial planning is that the number of women that are certified financial planners is higher than the percentage of women overall in the industry.
“I think the biggest telling statistic is 23% of CFP professionals are women, and that’s a higher percentage of women than in the overall traditional advisor channels,” Joe Maugeri, CFP Board’s managing director for Corporate Relations, told ThinkAdvisor. “I think that says, there’s another proof point that women gravitate toward getting deeper, more holistic arrangements with their clients, and they see that as their strength.”
