A lack of diversity in any industry hinders the advancement of the marginalized communities they serve, and in few areas is underrepresentation more apparent than financial services.
Women are expected to be the primary beneficiaries in the upcoming $30 trillion wealth transfer, according to a recent report from management consulting firm McKinsey, but with women making up less than a third of financial advisers, they may not get the kind of support they need to set themselves up for success.
“Women are starting to have a bigger role in the financial decisions that are being made,” says Gina Riepel, vice president and head of strategic partnerships at financial services firm TruStage. “The needs of women have changed, and therefore they’re recognizing the need for financial planning for themselves more than ever before.”
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Women are more likely than men to be the primary caregiver for family members in need, McKinsey found, which has historically kept them out of the workforce for extended periods of time and hurt them financially — especially when paired with the existing gender wage gap, with women earning an average of 16% less than men.
“Women are already starting behind the eight ball anyway,” Riepel says. “They have so much more to worry about and if we can’t connect those women with the right support, we’re going to miss the boat entirely when it comes to ensuring their financial security.”
In addition, women are also expected to live longer yet have less support along the way to building their retirement savings, according to McKinsey. Fifty-nine percent of 65-year-old women who work with a financial adviser say that their financial professional doesn’t discuss annuities options with them, despite nearly half being extremely interested in owning the product. That discrepancy is largely due to the fact that there aren’t enough female advisers looking out for women’s best interests, according to Riepel.
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“There’s a special skill set that women have, and it’s the ability to be empathetic — to listen and then make decisions,” Riepel says. “Women want to connect with other women beyond just managing their money, they want to establish trust. So if we don’t put more women in that situation where they can provide financial advice built on connection and experience, this money that’s coming through to women could end up in the wrong places and the wrong hands.”
The burden of addressing the inequity falls on leaders in the financial services sector. In order to better support female clientele, firms must first address the lack of diversity within their ranks by building more equitable recruiting strategies and fostering opportunities for women in their organizations to advance. While the industry has changed a lot since Riepel started her career in financial services, she recognizes that until pathways are created to get more women in advisery positions, women will continue to suffer at large.
“Some days it feels like we’ve taken five steps forward and six steps back,” she says. “But until this industry recognizes the true value that women bring to the table both as clients and advisers, it’s going to continue to be an uphill battle.”
