What You Need to Know
- Women, especially minority women, continue to be underrepresented in the financial services industry.
- Even women with advanced degrees tend to be less financially confident than their male counterparts.
- Advisors need to listen more to their female clients (and the wives of their male clients).
Despite the strides that women and minorities have made, they continue to be underrepresented in the financial services sector and all too many women are still not involved in making important financial decisions, female advisors from several U.S. firms said Thursday.
They were speaking during the JConnelly Virtual Media Roundtable “Spotlight on Women in Financial Services — Accelerating the Industry Forward & Empowering the Female Investor.”
“The COVID environment has shed a light on the challenges all investors face,” according to Natalia Tchetchoulina, partner and client advisor at Cerity Partners, who was the event moderator.
“But it’s been particularly tough for women, who are more likely than men to leave their jobs during this period and are only earning 82 cents on the dollar earned by men,” she said, citing U.S. Census Bureau data. Black women, meanwhile, are only earning 62 cents, she noted.
“Even more glaring than the gender pay gap is the gender wealth gap,” she said, pointing to data showing women only have 32 cents for every dollar of wealth owned by men. And the wealth owned by Black and Latina women is “just a single penny,” she said, citing a separate 2015 study, and adding: “Let’s hope that the numbers have somewhat improved since then.”
Meanwhile, “the wealth industry is not immune to the gender underrepresentation,” she pointed out. Although more than 50% of the U.S. population is female and women control one-third of household assets (more than $10 trillion), “only 18.1% of financial advisors are women” she said, citing Cerulli data.
She pointed out that female clients have indicated they prefer working with female advisors.
The numbers for African American, Latino and Asian advisors are in the 2%-4% range, she noted, adding: “There’s a major gap there, which needs to be solved … in addition to gender representation.”
Women also retire with $70,000 less in assets than men do, she said, citing the findings of a 2019 Bank of America study.
The Confidence Problem
Surveys have also shown that women tend to be less confident when it comes to investing than men are, including many women with advanced degrees, Tchetchoulina added.
Agreeing, Jennifer Belmont Jennings, wealth advisor at Hightower Wealth Advisors | St. Louis, said: “What’s interesting to me is that accomplished, intelligent women are afraid to handle their finances” too. In addition, “for some reason, I think women, in particular, are getting this message that we feel like we need to know everything …. For some reason, women don’t have that confidence.”