Over the next decade, the baby boomer generation will retire and eventually pass away with approximately $30 trillion in financial assets that will end up in the hands of women. On average, women outlive men by 5-6 years1 and 70% of widows will switch advisors within the year of their partner’s passing. This is the first generation of women who have accumulated significant wealth through their careers and are seeking advice as they retire, which presents an attractive opportunity for wealth management firms committed to assisting female clients.
In this moment, it is fundamental to include a diverse team that includes solid female advisors; however, only 15% financial advisors across all channels are female.2 Despite concerted efforts to recruit more women, CEOs and recruiters at financial firms have not had much success, as the pipeline lacks a large number of women with sufficient experience or interest.
This is a sign that firms need to re-evaluate their recruiting process and assist with developing the foundation of the talent pool by appealing to young women in high school and college when they are considering majors and career options.
Young women in the U.S. are less likely to pursue careers in finance because:
- They start to lose interest in math at age nine3
- Only 12% feel confident in making personal financial decisions4
- 40% of finance degree candidates are female5
- Women are a minority in finance professions6
- The industry is viewed as a “boy’s club”, which they cannot see themselves fitting the mold
- There is a misconception that wealth management is quantitative, aggressively sales-oriented, and sometimes dishonest
- They are deterred by the reports of low job satisfaction and poor work/life balance among financial professionals
Fortunately, there are organizations that are looking for partners from the industry to facilitate these efforts. A few examples include:
- Invest in Girls: Teaches financial literacy and offers mentor programs for high school girls, partnering with professional women to help in the classroom, serve as mentors, sponsor “career day” site visits, and provide internship opportunities. I am a volunteer with this organization, having participated in online Role Model Exchange Days and Invest in Girls Workshops. I have found the programs to be well organized with strong leadership and energizing and engaging for all participants. I look forward to serving as a mentor in the upcoming school year.
- Rock the Street, Wall Street: Provides financial and investment literacy programs for high school girls designed to spark their interest in finance careers with academic year-long, project-based learning programs taught by local female financial professionals, college and career path guidance, and an alumni network to help source job opportunities.
- Girls Who Invest: Administers its ten-week summer intensive program to rising college juniors which includes four weeks of academic instruction, followed by a six-week paid internship at sponsor firms and they recruit from any major.
It is possible to add to the ranks of senior women in wealth management to empower firms to benefit from this upcoming wealth transfer. Wealth management firms need to prepare by encouraging their employees to become active in the process.
Volunteering for organizations such as those noted above is a win-win proposition as it provides opportunities for professional women to cultivate communities, be positive role models for young women, and improve the public perception of finance professions. Building the pipeline of talented women in financial services is good for women, and good for business.
Sources: 1U. S. Census 2Mckinsey & Company 3Rock of the Street, Wall Street 4Invest in Girls 5Glass Door 6Rock the Street, Wall Street
This communication contains the personal opinions, as of the date set forth herein, about the securities, investments and/or economic subjects discussed by Ms. Morrill. No part of MS. Morrill’s compensation was, is or will be related to any specific views contained in these materials. This communication is intended for information purposes only and does not recommend or solicit the purchase or sale of specific securities or investment services. Readers should not infer or assume that any securities, sectors, or markets described were or will be profitable or are appropriate to meet the objectives, situation or needs of a particular individual or family, as the implementation of any financial strategy should only be made after consultation with your attorney, tax advisor and investment advisor. All material presented is compiled from sources believed to be reliable, but accuracy or completeness cannot be guaranteed. © Silvercrest Asset Management Group LLC