Our industry is at an inflection point. Diversity can no longer be treated as an obstacle or an afterthought — it must be embraced as a transformational, strategic advantage that reflects the true marketplace. If wealth management firms truly want to attract more female clients — a powerful and growing demographic — they first must recognize and respect how women’s attitude toward investing differs from that of men:
- A one-size-fits-all approach doesn’t work. Firms who want to work with women today need to look beyond their bank accounts, portfolios and time horizons. That starts with listening and understanding every aspect of their lives, including family, culture, faith, and personal and professional goals. Women are moving through more life and career stages than ever, and at their own pace. As their lives change, so must our financial strategies evolve.
- It’s all about the experience. A new era of smart, career-minded women — savvy, educated and successful — seek a new era of wealth management, one that is transparent, interactive and with frequent touchpoints. Women seek advisors who not only understand their financial goals but are true partners who can educate and empower them to make their own decisions.
- Personal goals drive performance. As a result of their changing life stages, women tend to focus on their personal goals just as much as their financial ones. They take a long-term view of the market, seeking returns over transactions.
Understanding and accommodating women’s holistic approach to wealth management is an important first step toward positive growth and change. Longer term, firms must actively recruit a new generation of female advisors. Some — though certainly not all — women prefer working with a female advisor, and more and more clients are pressing firms on how diverse their teams are. As with gaining more female clients, attracting more women to the field of financial services requires a thoughtful and tailored approach:
- Admit that the industry is changing — and that’s a good thing. Financial planning is no longer your father’s industry — it’s a dynamic and fast-moving business that relies heavily on collaboration, communication and trust. Still, wealth management has a reputation as being an “old boys’ club” that requires a strong command of the numbers alone. In reality, women (especially those gifted both qualitatively and quantitatively) are uniquely suited to be successful advisors. Firms need to correct this misconception and bring awareness to the fact that the financial advisors of tomorrow will need both the technical knowledge and the humanistic approach.
- Welcome women to the industry and tell them they belong. Firms can go a long way toward bridging the gender gap by drawing young women into the industry earlier, such as through college scholarships and internships. Mentoring the next generation of leadership also needs to be a priority: A major barrier to women moving up in all industries, and finance in particular, is the lack of mentors who can support and vouch for them during all stages of their careers. By taking this approach, firms can proactively build a stronger talent pipeline of women for both today and the future.
- Recognize the value of EQ, not just IQ. Women require a different approach to investing and, hence, advising. An advantage many female advisors have is they tend to be adept at emotional intelligence (EQ) and well as cognitive intelligence (IQ). It’s imperative that firms recruit women who encompass both qualities, stress how important both EQ and IQ are, and work with their entire team of advisors to cultivate them.
There’s never been greater opportunity for women to both invest and become financial advisors. Today’s women are leaders in business, heads of their households and in control of their wealth and futures.
Yet, this is no time to be resting on our laurels. We need to not only attract more female investors, but also ensure we are making strides to recruit more female advisors who look like, relate to and understand an increasingly diverse client base. Both challenges are synergistic. The more women we can bring on as advisors, the more women we can bring on as investors.
With the right approach and some courage, we can turn the investing (and advising) gender gap into a wonderful opportunity, building an ecosystem that will sustain.
Katharine Pritsos is a senior vice president at Vios Advisors, a multigenerational private wealth management firm that is part of Rockefeller Capital Management. With over 15 years of experience in the financial services industry, Katharine focuses on executing client investment programs, analyzing investment opportunities and overseeing all operations for the practice.