the last word
With Larry Barton
Talent Gap in Financial Services Hurts Us All Despite controlling a large portion of the nation’s wealth, women are vastly underrepresented in the financial services industry. By Larry Barton
hat’s on your radar screen now? We could talk about the bond bubble, Washington gridlock or retirement income planning in the face of low interest rates – but let’s face it, you’ve heard it all before. What we’re not hearing enough about is a major talent gap in financial services. When the U.S. Bureau of Labor Statistics examined median earnings and employment across multiple industry segments, which profession do you think showed the largest gap between earnings for women as compared with their male counterparts? Construction, maybe? Wrong. Women working in the construction industry make about 92 percent of what men do. The industry at the bottom was financial activities, where women make only 71 percent as much as men. FINS.com, an online career resource site, worked with the Bureau of Labor Statistics to obtain more details on financial services careers. It turns out that female financial advisors had an earnings parity ratio of just 58.4 percent in 2010, trending down over the past decade. With women representing 52 percent of the overall workforce and almost 60 percent of those earning bachelor’s and master’s degrees, why do women represent only a little more than 30 percent of all financial advisors? Consider, in contrast, the vital role women play as clients and controllers of wealth in this country. Women control $8 trillion in assets in the United States, and the number of women who are wealthy is growing twice as fast as the number of wealthy men. Some estimate that in the next 20 years, women could be the decision makers for more than two-thirds of the nation’s personal wealth. 64
Our profession is missing out on one of the most significant talent pools in the country. We can speculate as to the reasons why we’re clearly not successful in tapping this resource. Managers tend to recruit people most like themselves – usually to the detriment of creating the most effective team – and field managers remain predominantly male. There are fewer female role models and mentors at the leadership level, further complicating the move of talented women in to top spots in financial services. Work/ life balance has never been a hallmark of the financial services industry either, and we could pay more attention to exploring alternative work arrangements. What are we doing about it? The frustration of this talent gap is that some of the brightest, most creative leaders I encounter in this business are women. There are just too few of them in our profession. Financial services companies talk a great game when it comes to more diverse recruiting and leadership, and I honestly believe their intentions are good. Some companies execute better than others in this important area, however. Lest you think I’m negative on our industry’s prospects, look at some of the creative things State Farm is doing. They are leaders in effective mentoring of women in their field system, offering events and resources that help women succeed in their careers. They partnered with The American College to launch the State Farm Center for Women & Financial Services in 2011 and to create groundbreaking curriculum in this important subject area. The center sponsors educational events such as the Women’s Leadership Academy and coursework that is embedded into The College’s various programs. In addition, the center has become a leader in producing research on female financial advisors, female business owners, women and the risk of disability, and the financial needs and attitudes of women of color.
InsuranceNewsNet Magazine » March 2013
Let’s do a quick knowledge check. Which of the following statements are true? Once financial advisors reach 16 years of experience, average incomes become roughly equivalent for male and female advisors. Female advisors are more likely to pursue advanced professional education than their male counterparts. The No. 1 priority for female consumers is creating an emergency reserve fund, followed by saving for their children’s education. Women are 20 percent more likely to suffer from the leading cause of disability, which is accidental injury. In fact, none of the above is true. Income disparity actually is more pronounced for advisors with significant years of experience, and women historically have been less likely to pursue advanced professional designations. The leading priority for female consumers is paying down debt, followed by saving for retirement. Ninety-seven percent of Americans can’t identify the leading cause of disability, so don’t feel bad if you missed this one. Most think of accidents as the leading cause of disability, but the right answer is arthritis. Women are twice as likely as men to suffer from disabling arthritis. We have more work to do, and you can help. We’re conducting a national talent search for a new director for our State Farm Center for Women and Financial Services. It’s a unique opportunity to make a difference for female advisors and consumers across the country, and for our profession overall. If you know the right person to help us close the talent gap for financial services – an articulate advocate who is ready to join The American College and create real impact – email resumes and contact information to Jeff.Snyder@TheAmericanCollege.edu. Do it now while you’re thinking about it. We don’t have a minute to lose. Larry Barton, Ph.D., CAP, is president, CEO and holder of the O. Alfred Granum Chair in Management at The American College, based in Bryn Mawr, PA. Contact Larry Barton at Larry.Barton@innfeedback.com.
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