Are Women Advisors the Future of Financial Advice?
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.