Financial Advisory Paradox: Where Are All the Women?

You may know the ancient Wall Street anecdote about the wide-eyed visitor to a brokerage firm, who was looking down admiringly at all of the brokers' and bankers' yachts that were docked on the Hudson River. His naive question, "Where are all the customer's yachts?"...was an inadvertent illumination of one of Wall Street's inherent contradictions.

With the dismissal of Sallie Krawcheck this week, we might paraphrase this old saw with... Where are all the women (in financial services)?

Consider the following:

• According to a study by Catalyst, within the financial services industry women account for just 19.1% of executive officers, 17.4% of board directors, and 2.7% of CEO's. (With Krawcheck gone, the 2.7% number is even smaller now!)
  
• Looking at the 2010 data from the Bureau of Labor Statistics, the percentage of women who are financial advisors is 30.8%.

Contrast the above, with this:

• Women control about 60% of the wealth in the U.S., according to a study by Allianz Life.
• This percentage is likely to increase as there is a growing education gap too, as defined by gender. In 2009, 57% of bachelor's degrees were earned by women...as were 60% of the master's candidates...and 52% of PhD recipients. (Source: U.S. Dept. of Education)
• Due to significant differences in life expectancies, women are likely to be in charge of much of the $41 trillion that is expected to pass between generations over the next 50 years.
• In a 2010 study of female investors by the Boston Consulting Group, 55% of those surveyed said that wealth managers could do a much better job of meeting the advisory needs of women.
  

We don't presume to have any answers to this obvious disconnect in the marketplace. Yet the question remains:

Women control 60% of the wealth in this country, yet only 30% of financial advisors are women?

What's wrong with this picture?

by Chris Holman