The business world has changed in many ways in the past 50 years – but perhaps no more than in its treatment of women.
In 1965, women were routinely paid less than men for the same jobs; after all, men had families to support. Women were regularly overlooked for promotions; there was no point in promoting someone who would quit to stay home and have kids as soon as she found a husband. Women were seen as lacking the drive and toughness to succeed in business; the first time she lost a client, a woman would collapse in tears. And the “Mad Men” world of workplace sexual innuendo and harassment was a reality that women had to deal with on a daily basis.
Since then, strides have been made that would have been unthinkable 50 years ago. Today, women make up the majority of students in leading medical and law schools. Women represent 40% of students at the Harvard Business School, which 50 years ago saw its first eight women graduate, along with 678 male classmates. It is notable that Harvard Business School took almost 60 years after its founding in 1908 to admit women, and today has the goal of getting to 50% representation.
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But there is still progress to be made.
Women have yet to broadly crack the CEO-glass ceiling and are still dramatically underrepresented on corporate boards and in engineering, technology and the sciences. There has been considerable commentary about the fact that just 20% of Google’s engineers are women, and there is only one woman among Google’s top 12 leaders. Indeed, women represent only one in five professors in engineering and the sciences at American universities (about half the proportion of faculty overall), something that got former Harvard President Larry Summers in trouble when he suggested that this might be due to innate differences between the genders.
And despite progress, the financial industry still lags. The U.S. Department of Labor reports that women make up just over 30% of financial advisors, and women make up less than one-in-four CFPs. Yet the case can be made that women advisors represent the future of financial advice and that some of the same differences from men that held women back in the past will work to their advantage going forward.
How male and female advisors differ
Twenty years ago, relationship counsellor John Gray published Men are from Mars, Women are from Venus, in which he explored how the two genders communicate and interact. Sitting on the best-seller list for over 120 weeks, this book was among the first to explicitly address the differences in how, as a general rule, men and women differ when it comes to relationships.
A word of caution here: We buy into stereotypes at our peril, and the key words in the previous sentence were “as a general rule.” That said, there are broadly accepted patterns about how men and women typically differ in their approach in a business setting. In preparing this article, I talked to successful advisors – six men and six women – about the differences that they see between the genders at their firms. Of course, not every male advisor and not every female advisor fits these patterns, but in talking to advisors of both genders, I heard general consensus on the different ways that men and women tend to work.
Recognizing that there will always be exceptions, here’s what I heard about four general differences in how many successful male and female advisors operate.
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Male Advisors
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Female Advisors
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Competitive, focused on individual success
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Cooperative, focused on team success
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Excel at telling a persuasive story
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Excel at listening and picking up on nuances
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Impatient for results, limited tolerance for clients who ramble on
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More patient, willing to let clients talk at length
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Focus on communicating data, facts and figures
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Focus on empathizing and developing deep bonds
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The key to success going forward
Regardless of gender, it is unlikely that all of these general guidelines will apply to you. That’s to be expected; no stereotype is 100% accurate. But as a thought experiment, imagine that these differences did broadly apply to financial advisors. What are the implications of this going forward?
The answer is that the stereotyped “female” behavior is much better aligned with what it will take to be successful than the equivalent male traits. That doesn’t mean that being results-oriented isn’t important, or that there isn’t value in being persuasive or communicating facts and figures. But going forward, it’s the “female qualities” on the right hand side of the ledger that will lead to success as a financial advisor – listening, empathizing and developing deep bonds will be pivotal not only in attracting and retaining clients but also in getting clients to stick to their plans.
The other key to success will be the ability to attract, motivate and manage a team. Historically, the model of the successful financial advisor was an “alpha advisor” supported by one or two assistants. Indeed, as recently as 15 ago, one large wirehouse discouraged associates, taking the view that they represented expensive overhead that would be costly to downsize in the next market downturn.
Today, there is universal agreement that only advisors who are supported by a strong team will excel. This is especially true as the most successful advisors morph from “investment advisors” to “financial advisors” where a written financial plan is the foundation of the relationship and where advisors touch on every aspect of their clients’ financial lives. In this new world, taking a cooperative team-based approach is critical to success. Again, this has been an area of strength for many women.
Two final barriers to success
When you talk about why there aren’t more female financial advisors, two final issues arise. The first is the historic perception in the industry about the willingness on the part of women to put in the long hours to build a business. This perception persists even though the women who did enter the business typically worked every bit as hard as their male counterparts. The second barrier relates to the industry’s historical perception of the preference by some clients to deal with male advisors.
On the issue of being able to make the time commitment, there is no question that women who want to raise families face challenges that men don’t. Studies show that on average working women still take on more responsibility for child rearing than their male partners. That said, the world is changing in this respect as in so many others. More and more advisors are entering the business as part of a team rather than as solo practitioners, meaning that they have backup when it comes to managing clients. Technology allows advisors to work remotely in a way that wouldn’t have been possible even 10 years ago. Finally and perhaps most importantly, a new generation of younger male advisors are asking the same questions about an 80-hour work-week commitment as many women.
With regard to client resistance to dealing with women, not only are more and more clients open to dealing with advisors of either gender, but new research also suggests that being a woman may actually be an advantage. Every advisor is familiar with the data that in the future as much as two-thirds of assets will be controlled by women. At a recent U.S. conference, a speaker from Pershing pointed to new research that, given the choice, 60% of women prefer to deal with a female advisor and among women over 65, this number rises to almost 80%. Going forward, we may see a role reversal where male and female advisors compete on a relatively equal playing field for male clients, but women have a clear advantage among female clients.
Women advisors will not dominate the financial industry as men did 50 years ago. But gender will be much less important to success than the quality of interactions with clients and the ability to manage teams. As you think about the future, consider whether some of the traits historically associated with women may be critical to success of advisors, male and female alike. For advisors who emphasize some traditional female values of working cooperatively, listening, empathizing and relationship-building, both they and their clients will be better off as a result.
Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written commentaries, go to www.danrichards.com.
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