Women have long made up just a sliver of the financial advisor population, but as the industry evolves, their numbers are slowly but surely growing. And as their ranks increase, female advisors are changing the business for the better.
“We’re excited about this shift; it’s long overdue,” says Jennifer Povlitz, co-head of U.S. wealth management at UBS.
The...
Women have long made up just a sliver of the financial advisor population, but as the industry evolves, their numbers are slowly but surely growing. And as their ranks increase, female advisors are changing the business for the better.
“We’re excited about this shift; it’s long overdue,” says Jennifer Povlitz, co-head of U.S. wealth management at UBS.
The change is important for investors, some of whom might want to seek out a female advisor, as well as for women considering the profession or looking for opportunities to advance in it. There are still significant hurdles, but women are making progress.
Barron’s 2023 Top Women Financial Advisors ranking makes that clear. Average team assets under management rose to $6.6 billion from $5.8 billion in 2022. An important gauge of the overall health of an advisory practice, AUM growth is driven by new-client acquisition and the performance of assets the practice manages.
Meanwhile, the average age of the 100 women in this year’s ranking is 55.9, compared with 56.9 last year. By contrast, Barron’s Top 1200 Financial Advisors have been trending older, with an average age of 55.5 this year, up from 55.4 in 2022 and 51.6 in 2012. As many of the nation’s most accomplished advisors near retirement, many are passing control of their teams to younger advisors, some of whom are women.
This year’s list of top women advisors includes 18 newcomers, including two from Merrill Lynch, which had a total of 21 advisors on this list, the most of any firm. Several advisors made big moves this year, including Charla McIntyre Fields of Ameriprise, who jumped 56 ranking spots to No. 29. Michelle Young, also of Ameriprise, rose 34 spots to No. 47. UBS advisors Leslie Lauer and Hillary Cullen each jumped 20-plus spots to settle at No. 28 and 76, respectively. Rounding out the top five movers, Merrill’s Michelle Mayer rose 23 spots to No. 27.
We’ve also seen the percentage of women attendees at the Barron’s Advisor Teams Summit, an invitation-only event for top teams, average 37% in the past two years, indicating that many women advisors are part of top-tier practices and are leaning in and networking hard.
The early days. In the mid-20th century, women advisors were rare, but by 2015, they accounted for 15.7% of the advisor population, according to research firm Cerulli. By 2021, that figure had grown to 18.1%. Women made up 29% of new Certified Financial Planner designees in 2022—greater than their 24% share overall. The CFP designation is widely respected within the industry but isn’t required to work as a financial advisor.
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It’s easy to argue that progress toward parity has been too slow. But it depends on how you look at it, says Penny Pennington, who leads Edward Jones, a St. Louis–based firm with 19,000 advisors. At Edward Jones, 23% of financial advisors are women, up from 21% two years ago. “You can say, ‘My gosh, that’s only two percentage points difference in a couple of years,’” says Pennington, “but actually, it’s a 10% lift in a couple of years.”
Achieving numerical gains among advisors is proving to be a slower process. Pennington is optimistic, however. “I’m always inspired by someone telling me that years ago, realtors were mostly men,” she says. “Today, they’re mostly women.”
Few people believe that the movement toward parity is happening fast enough. But industry leaders say the momentum bodes well. “There’s a significant opportunity here in the next 10 to 15 years, because about 40% of financial advisors are expected to retire industrywide,” says Povlitz. “That creates room for talented young women to step into the room with a fresh perspective,” she says. Going forward, she sees a “domino effect opening doors for future generations.”
The role of the modern financial advisor involves not just investment analysis but also the ability to plan, communicate, and empathize with clients.
Amy Webber, the CEO of Fairfield, Iowa–based Cambridge, sees more of her firm’s male advisors bringing female colleagues into their client relationships to provide a piece of the solution they can’t. “Female advisors can definitely relate and drill into a goal like taking care of my family at a higher emotional level,” says Webber. “That emotional intelligence comes through, and it makes their practice stronger.”
Women make up 17% of Cambridge’s 3,824 advisors, compared with 14% 12 years ago. Amid this “incremental success,” as Webber calls it, more women are prospering. Twelve years ago, just 1% of the firm’s women advisors generated more than $200,000 a year in revenue; today, 6% are generating over $1 million annually. “So, while the growth has been slow, I think we can use these success statistics to let women know that this is an industry where they can thrive,” says Webber.
Joining the field. So, why are more women becoming advisors? Part of the answer is that the industry’s public image is catching up to reality. Years ago, the brokerage industry’s sales-driven, “eat what you kill” culture proved to be a turnoff for many. Today, the industry is far more focused on financial planning, of which investments are just one element.
“I think the nature of our business has changed pretty dramatically,” says Victoria Bailey, a private wealth advisor with Morgan Stanley in San Francisco. Rather than just being stockbrokers, “we’ve evolved into full holistic advisors, covering topics like tax planning and estate planning, and all of that planning work opens the door to people of different backgrounds becoming advisors.”
The industry has also become more amenable to work/life balance. That includes more-flexible hours and the ability to work at least partially from home, a change that was accelerated by the Covid-19 pandemic. “In the late ’80s and early ’90s, as I was having my children, I didn’t admit I was pregnant for a long time for fear of something bad happening,” says Webber. “The world has really changed.”
Another factor is the steady rise of advisory teams over the past two decades. Joining a team can allow for different personality types, versus building a client base as a solo advisor, which was once the norm. Today’s young advisors “don’t need to take that leap and bear the burden of success or failure,” says Webber. “It’s not 100% on their shoulders.”
Now, in fact, countless teams are on the hunt for strong female talent. The so-called great wealth transfer is expected to move $84 trillion between older Americans and their heirs through 2045, and the industry is anticipating that women will wind up controlling a great deal of that wealth. Pair that with the fact that many women investors prefer to work with a female advisor, and it’s easy to see why women advisors are a hot commodity.
“For the first time, clients are demanding diversity on their teams,” says Bailey. “When I started, it was pretty rare for somebody to say, ‘I really want a woman advisor.’ Now it happens fairly regularly.”
Women clients switch to a new financial advisor as much as 70% of the time upon the death of a spouse, according to Vanguard. Some may feel more comfortable working with a female advisor.
Female advisors are leaving their mark on the industry by “improving communication, creating a family-like environment for both employees and clients, and maintaining the sophistication of our business but making it accessible,” says Shannon Eusey, CEO of Beacon Pointe Advisors in Newport Beach, Calif.
They have also created more-holistic conversations around wealth planning, retirement planning, estate planning, and peace of mind for both spouses, says Eusey. “We have experienced that male clients seem to feel a sense of relief that if something were to happen to them, their wives and children would be in good hands with their financial advisor if there are also female advisors within the organization.”
In the C-suite. Women are also moving up within the executive ranks of the wealth management industry. Fifty percent of Beacon Pointe’s leadership team are women, for instance, and 38% of Cambridge executives at or above the vice-president level are women.
As firms and teams grow larger, many are creating a chief operating officer role—and it’s frequently filled by women. “Women tend to be incredible multitaskers and project-oriented individuals,” says Eusey. “They hold themselves to high standards with expectations—and often ask that of their teams, but lead by example.”
As the ranks of women advisors have grown and it has become clear that they’re wanted and valued in the industry, they’ve established networks of support and a sense of common purpose. “I think there’s a lot more camaraderie among the women than there might have been in the past,” says Bailey. “That is something that’s been really, really fun to watch and witness and be a part of.”
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