Industry diversity, especially for women, calls for mentorship and sponsorship as a pathway to growth
by Sandy McCarthyMs. McCarthy is president of retirement services and head of enterprise operations at OneAmerica. She brings more than 30 years of industry experience to her current role, and is also the creator and chair of the OneAmerica Female Retirement Professionals Program—an initiative aimed to engage and empower women advisers and to elevate the way they show up in the industry. Visit www.oneamerica.com/.
More women are now in charge of their own and their household’s finances than 20 to 30 years ago, signaling a shift in the current landscape of financial services. Women now make up a larger portion of the U.S. population1, women are working in record numbers2 and women have a significantly higher life expectancy than men.
How does this translate to the financial world? More and more women are making purchasing decisions for themselves and their families. The National Center for Women and Retirement Research predicts that women will control as much as 67% of private wealth by 2030, with around 90% of women managing their own finances at some stage in life.3 The financial services industry must be prepared for this shift and it’s clear, as of right now, we’re not.
The Industry Is Simply Not Tailored Towards Women
The current landscape of financial services is not structured to meet these new demands. The industry as a whole is not tailored towards women and the increasing percentage of our business they currently account for. That percentage will surely rise over the next 10 to 15 years and we need to start expanding our industry to meet this changing clientele.
A part of the solution to this changing landscape is to attract and retain more female financial advisors. While women don’t always prefer talking to female advisors, some do. Research has indicated that as many as 70% of women seeking financial advisors prefer working with other women. And regardless of their preference, all of them look for certain characteristics or approaches in their financial advisors, which tend to differ from the things male clients seek out. While there are many reasons for adding more female advisors to the industry, that goal becomes increasingly important when you consider what we’ve already discussed – that our financial clientele is changing.
But saying we just need to hire more women and walking away doesn’t solve the problem. It’s also not a viable solution, as hiring enough women to serve the incoming female customers simply isn’t possible. Achieving lasting progress in this effort to meet the needs of a changing marketplace will require us to consider the bigger picture, and to make room for new perspectives along the way. We can look back and move forward simultaneously. We can build off what’s always been significant about the financial advisor profession and incorporate approaches that have proven successful, while evolving the profession to feature greater diversity of thought and experiences.
The benefits of this approach — focused on adding to rather than taking away — are multi-faceted and compounding. We will attract more women advisors and help all advisors grow their businesses and skill to better serve Americans of all backgrounds. By attracting new female professionals and also adding skills for all current advisors, we can rise and meet the challenge.
What Matters To Female Advisors?
Earlier this year, OneAmerica released a survey and subsequent whitepaper that focused on female advisors and what mattered to them. The survey drew from women who were new to the industry, as well as advisors who have at least 15 years of experience.
What we found in our data was a recurring theme of what female advisors need and want from their jobs and employers. The results are what we are calling the 4 Cs: Confidence, Community, Connection and Culture. These four areas emerged from our survey data as factors that fuel success. If those of us in leadership positions can get the 4 Cs right, it can generate momentum. And to be clear, the 4 Cs can happen at the industry level, the firm level and the individual level. Here’s how the 4 Cs are defined from our data and how they are relevant to our drive for more female advisors and a better overall female customer representation.
- Confidence: A noteworthy 70% of seasoned advisors say it took four to 10 years to feel confident in their skills and ability to help clients. This is especially significant in an industry notorious for high attrition. If we as leaders in this industry can give our young advisors the skills and training they need to feel comfortable in their abilities early in their careers, we will see a significant retention improvement.
- Community: Building knowledge and gaining confidence are essential in the industry, and women find establishing community is impactful in developing those skills. Respondents gave high marks to networking and mentorship. It’s hard to gain knowledge and skills if you don’t know who to ask or don’t have more experienced advisors you can talk to.
- Connection: Women indicate that the most successful sales strategies are client referrals, networking and building out a center of influence — approaches rooted in relationship-building and cultivating personal connections.
- Culture: The unique culture of each adviser firm can fuel success. When it comes to enabling success, women ranked continuous learning and development as the top element of firm culture. Female advisors won’t stay if they don’t think they are working in a place that values them and wants to see them succeed. Making sure we are constantly investing in our employees can go a long way.
While our survey and whitepaper were focused on female advisors, embracing these core components will help men and women across the board. This will help us achieve our overall goal of meeting whatever the future financial landscape may bring.
One thing I want to highlight that really ties all the 4 Cs together is this idea of mentorship. I’m a huge proponent of mentorships, whether it’s a formal one or an informal one. I owe a great deal of my professional success to mentors and leaders along the way who showed me the ropes, answered my questions and let me watch how and why they were successful. Mentorship provides more experienced advisors to talk to in order to grow a new person’s confidence and lead to a sense of community within the workplace. Having a culture that embraces mentorships and asking questions and learning boosts morale and improves retention, leading to a well-connected workplace.
A New Perspective On Mentorship
Prior to jumping into a mentor – mentee situation, it’s important for younger professionals to know where they want to go and what they want to learn, not necessarily who mentors them. Sometimes it’s easy to get caught up in personalities and not focus on what a person can teach you. Asking questions about roles that you might potentially be interested in and learning more from someone in that role can be considered an informal mentorship.
There is a difference between formal and informal mentorships and both are important. The difference is intention and what you’re hoping to get out of the relationship. Simply learning more about a role or getting coffee with someone would be considered more informal, while formal mentorships usually have clearly defined goals, with a program and regular meetings. Both are crucially important to the success of young employees. And having a company culture that encourages those relationships can really help them thrive. It’s so important for new employees to have someone to confide in or turn to for help when they don’t know something. Without this safety net, young advisors may feel isolated and leave the industry.
I also want to mention the need for more women and men to step up and provide sponsorship for younger employees. Sponsorship is slightly more formal than mentorship and focuses more on helping your sponsoree climb the ladder and to be a voice for them during C-suite discussions. Mentorship and sponsorship are both important but slightly different. Mentorship is about making sure junior employees have what they need to be successful, while sponsorship is about making sure others recognize their success. Both can provide numerous benefits to all employees. In my experience, I’ve found mentorship is a two-way street benefitting both parties.
A Desire To Help People…
There is one last important point from our survey and data as we look at how to equip our industry for the future. For the younger advisors, one of their top reasons for getting into the industry was the desire to help people — this was also a top reason given by more experienced female advisors about why they’ve stayed.
This is an extraordinary fact. Think about it: Compensation or success aren’t the biggest factors for women in our industry, it’s helping people. We need to do a better job of framing what we do in financial services this way. We’re here to help people. Help them understand their finances. Help them feel secure about their future. If we can shift our perspective and focus on that concept in our day-to-day operations, we could start attracting and retaining more female advisors.
When you look at demographics and how they will change the financial landscape over the next few years, it becomes clear to me that we must go beyond the way we have traditionally done things. There’s no one-size-fits-all solution to what we’re facing. Still, the important thing is not where we start but that we do. We can bring more female advisors into our industry and retain them. We can focus more on mentorship to ensure that younger advisors feel empowered and confident as they meet with clients of all demographics. We can embrace the lessons of the 4 Cs to ensure our places of work are places where people love their jobs. We can move forward together — united by our purpose and ready to expand, enrich and enhance the industry that means so much to us, and the customers we serve.