I am failing and I need your help.
Last spring I attended the Tiburon CEO Summit, which brings together high level executives from the biggest financial advisory firms in the country. The highlight is always Chip Roame’s State of the Industry presentation, where he barrels through a hundred slides of key statistics about what’s going on within the industry.
In his opening remarks, Chip addressed the elephant in the room. Almost the entire audience was made up of older white guys, in various states of balding, with only a handful of women scattered throughout the crowd. He said “If it bothers you that this is the case, then don’t get upset – do something about it. I got news for you, this room is a reflection of what your industry looks like.”
The statistics bear this out. According to Cerulli Associates:
Women represent 50.8% of the population according to the U.S. Census Bureau, but only 15.7% of the financial advisor headcount. Of the 310,504 total advisors across all channels, a mere 48,631 are women, according to Cerulli.
“Women remain outnumbered in financial advisor communities despite efforts to recruit more female advisors; only 16 in every 100 advisors are women,” Marina Shtyrkov, analyst at Cerulli, said in a statement.
16 out of 100 is absurd. Part of this is just a legacy issue. The average age of a financial advisor in America is 59 years old. And Cerulli did mention one bright spot – among newer advisors, the percentage of women is growing. 23% of rookie advisors are female. That’s still one in four, which is also not good enough. It will get better, as 40% of current advisors plan to retire in the next ten years and a more diverse cohort takes their place. But it’s too slow. It’s an embarrassment for the profession.
Speaking of embarrassment, I’ve gotten a bunch of emails from clients over the years asking about why we don’t have more women as advisors at the firm. Here are the excuses I’ve made:
- All of the advisors who work here have come to us, as readers of the blogs and fans of our work. We can’t control who is reading us and reaching out.
- Yes, eventually we may train more young advisors and we will prioritize bringing in women then.
- Any day now…
- Because there are so few female advisors in the industry, they are in higher demand among employers and so harder to hire.
I don’t want to respond to another email from a client with these excuses. It’s totally embarrassing. We haven’t lifted a finger to fix this. We’ve talked about it a whole lot, but that’s not cutting it.
We have one female financial advisor at my firm and she’s amazing. If I had ten more advisors like Dina Isola, I could take over the world. (If I had ten operations chiefs like Erika I could take over the galaxy, but that’s a whole other story).
Dina writes a kickass blog on personal finance called Real Smartica and her clients love her. She’s dedicated her career to helping the kind of clients who don’t always get a lot of attention from traditional Wall Streeters and has rescued dozens of teachers from corrupt insurance salesmen and horrific portfolios. She’s knowledgable, empathetic and has a great deal of life experience to bring to financial planning discussions. The households she works with think of her like family. She also jumps in and helps us when we need a proofreader or another set of eyes for letters and documents.
Dina is just one of the twelve client-facing advisors at my firm. So we’re at 8%, which is below the industry average. What makes this even more glaring is the fact that there is well documented evidence that women are better investors than their male counterparts. Academic studies have shown that they are less prone to letting ego get in the way of good decision making and that they tend to be more thoughtful about their research process.
We’ll be turning five years old this September. It’s not cute to be at 8% any longer. I am failing as a leader of this organization and I can’t wait for circumstances to change on their own. That’s gone on for too long.
This is where you come in…
I am asking all of my readers, colleagues, friends and fans to make introductions to women in this industry who I wouldn’t otherwise have a chance to meet. We’ve found some amazing people to come join our firm through the web / social media and I want to replicate this success once again, with your help.
If you know a female advisor who might want to talk to us about her career, I want to hear to about it. You can send an email to info at ritholtzwealth dot com. I am personally overseeing this initiative and I will not give up until I fix this issue. Please spread the word, your assistance is much appreciated.