A critical ingredient for long-term growth and industry success
by Lexie BishopMs. Bishop is a Director at UBS Wealth Management Americas and serves as the Branch Manager for the Boston South Shore office. Visit here.
Currently the Wealth Management industry is heavily male dominated. The Bureau of Labor Statistics reports that women represent just 31% of U.S. Financial Advisors. People of color are also underrepresented; making up just over 7% of the Financial Advisor community according to Data USA.
Over the next decade 40% of Financial Advisors plan to retire which means our industry has a significant opportunity to work with and empower the next-generation of Financial Advisors. Not only is ethnicity and gender diversity a competitive advantage, it’s crucial to the sustainability of our industry.
Today’s Financial Advisors must build relationships based on listening to and understanding client needs. The path to connecting and building trust with clients is easier when there are shared experiences and similar worldviews. Having diversity on a team allows for broader experiences and worldviews to match those of our evolving client base.
Bridging The Gender Gap
Studies show* that bridging the gender gap in the financial services industry drives increased sales revenue, customer growth and higher profits. Greater diversity in the workplace broadens opportunities to utilize different skill sets and perspectives to better serve the needs of clients. Advisors and teams should be asking themselves “who will our clients be in 5, 10, 15 years? How will their needs and service expectations differ from today?” and “is our team equipped to meet these evolving needs and changing demographics?”
Women now control 32% of the world’s wealth and that share is likely to grow significantly in the years ahead. According to UBS’s recent Own Your Worth report, eight out of 10 women will end up solely responsible for their finances due to longer life expectancy and divorce. Women also have different investing preferences and behaviours than men. When developing an investment framework, it’s vital to understand how women view financial success. For most women, financial success is a means to live and improve their life. Women today want to work with a Financial Advisor that understands their hopes, dreams and can understand their life journey. We find that when teams have one or more members who represent the gender, ethnicity, generation or sexual orientation of the client, the team is better equipped to understand and anticipate the needs and service expectations of the client.
Filtering Unconscious Bias
While there is no quick solution to creating a more diverse industry, there are proven strategies that can be used. For example, it’s important for a firm’s senior leaders to be vocal and visible advocates for creating a more diverse and inclusive workplace. This includes decision making around hiring, talent development and promoting. Many firms across the industry have expanded their network of recruiters and require them to deliver multiple diverse, qualified candidates for all open roles they are helping to fill. When adding a new member to a team it’s also important to be aware of potential unconscious biases.
My path to becoming a Branch Manager was somewhat unconventional. I was very fortunate to work with a Regional Director and a Regional Sales Manager who encouraged me to share ideas during team meetings and take on responsibilities that weren’t necessarily part of my role as a Business Strategist. A pivotal moment for me was when they encouraged me to facilitate a coaching session with one of our largest teams in the region at the time. They made sure I was prepared and supported for the engagement but gave me complete ownership of the meeting. I likely would not have had the confidence to pursue the role of Branch Manager if it wasn’t for the mentoring and sponsorship involvement of these two senior leaders.
A Sense Of Belonging
Ensuring that diverse talent feels recognized, supported and appreciated is important. At UBS we have seven employee networks in the U.S. that help colleagues connect with one another, expand their professional networks, and foster a sense of belonging that inspires loyalty and strengthens a culture of inclusion. For our Financial Advisors and teams it’s important that everyone on the team has an opportunity to be heard and to share their perspective during team meetings.
The pace of change in our industry is only getting faster and if you want to build teams or organizations capable of innovating, you need diversity. Diverse teams bring different experiences and perspectives to handling the ever evolving needs of clients. Much has been said about the wealth transfer and how the rising generation (20 to 40 years old) will have more influence and buying power than the Baby Boomer generation. As younger generations make up greater portions of the financial services client base, having diverse representation on teams only makes these practices more attractive to them.
* Center for Financial Planning, CFP Board, “Why Diversity Matters, How Workforce Diversity and Inclusion Accelerate Business Success in Financial Services, Literature Review: November 2019.