Wealth of demand for women

Client requests for female financial advisers are on the rise.

Ben and Maggie Kappelmann say they appreciate how their female financial adviser listens to their concerns and doesn’t dismiss any of their questions.

During the past two years, Jane Schwartzberg, head of strategic client segments at UBS Group’s US wealth-management unit, has seen a marked increase in requests from prospective clients who want to work with female financial advisers.

“It’s not that women make better advisers,” says Schwartzberg, who oversees the firm’s marketing efforts to women, business owners and wealth inheritors. “It’s that prospects are now more vocal that they want diversity from the people they get advice from.” In part, she says, societal conversations about gender issues are prompting these prospective clients to speak up about their preferences.

Financial advisory firms are responding to client demands. At UBS, one of the biggest US brokerages, the ranks of female financial advisers have increased to 20.9 per cent of its advisory force worldwide, or 2183 advisers, from 18.6 per cent in 2011, the firm says.

Other firms in the industry are also taking action. This year, one-third of the roughly 3500 employees in Merrill Lynch Wealth Management’s adviser training program in the US are women — the highest percentage in the unit’s history and one that is increasing yearly, the company says.

Morgan Stanley is “actively recruiting and preparing more female advisers for the needs of the marketplace”, says Kara Underwood, head of wealth management diversity and inclusion at the Wall Street firm.

Some financial advisory firms say they have had an increase in prospective clients who have become more outspoken in recent years about the need for diversity and are using their consumer and economic power to shape the products and services they want, including whom they pick as their financial adviser.

A rise in college-educated women and gains in their earning power are likely helping to fuel this trend. Not only has the share of women who are top earners increased in past decades, women are the slight majority of the college-educated labour force this year, according to the US Bureau of Labour Statistics.

As of the end of 2017, only about 14.3 per cent of financial advisers in the US were female, according to research and consulting firm Cerulli Associates.

Despite industry efforts to recruit more female advisers, the number of women in the profession has been roughly flat during the past three to five years, Cerulli says. A lack of awareness about the financial adviser role and an aversion to what traditionally has been a sales-driven culture have kept some women away, it says.

UBS’s Schwartzberg says prospects and clients expect to see the firm’s senior women speak at quarterly briefings on the economy, and they express their disappointment when it doesn’t occur.

Some independent financial advisory firms also are getting more requests from prospects who want to work with female advisers.

About a year ago, Ben Kappelman and his wife, Maggie Kappelman, both 32, looked for a woman to be their fee-only certified financial planner. Maggie Kappelman was disappointed with her male adviser. An online search led the couple to Amber Miller, an adviser at the Planning Center in Minneapolis. The Kappelmans say they appreciate how Miller listens closely to their concerns, enjoys educating them about investments and doesn’t dismiss any of their questions as too small or irrelevant.

Mark Struthers, a financial planner at Sona Financial LLC in Excelsior, Minnesota, has had prospects turn him down because he doesn’t have a female partner at his firm. Despite losing out on some business, he says it is a “good thing” that prospects openly express this preference and are seeking more equality from the advisory profession. He says he is looking to add a female partner.

During the past year, financial adviser Michael Landsberg has had more inquiries about his team’s gender composition than he has had in his 25 years of being an adviser. His firm has promoted and trained two of its top female client associates into advisory roles. Doing so not only has helped meet client demand but it also has increased female leadership in the company and has raised the quality of its advice by adding diverse voices, he says.

Having women in senior roles is only “one piece of the puzzle”, UBS’s Schwartzberg says. Firms need to make sure all of their advisers are trained so they can focus on the topics their clients may care about. For instance, she says female clients often prefer to discuss how they can help their children and favourite charities instead of the latest hot stock or how much their portfolio beat a benchmark.

When Kathleen Stevenson’s father died, the 49-year-old stay-at-home single mother decided to find a new adviser for her $US7 million inheritance. She was looking for an adviser who could help her invest in women-owned businesses, research sustainable investments and sometimes serve as a sounding board for financial decisions.

Before she landed on working with two advisers at Harbor Wealth Management, a women-owned firm in Colorado, she had meetings with several firms. Near the end of one presentation, a group of male advisers asked a woman from the firm to join the discussion.

Stevenson was sceptical, in part because the woman was significantly younger than the male advisers and her knowledge of investment strategies seemed minimal. She says she believes the employee was brought into the room just because she was a woman. Stevenson soon ended that meeting.

The Wall Street Journal