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Women Get an Earlier Start Than Men in Financial Planning

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Oct 18th 2017
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When considering offering additional services to clients, accountants could pay attention to this bit of statistical information on financial consulting: Women early in their careers are more likely than men to become financial planners.

A new report, The Cerulli Edge―U.S. Monthly Product Trends Edition, showed that by gender 31.3 percent of women are financial planners, compared to 21.6 percent of men.

On the other hand, for other advisory practices,  in money and wealth management, the number of men outpaces women: 13.2 percent of men and 6.4 percent of women are money managers, while 6.2 percent of men and 2.9 percent of women are wealth managers.

In investment planning, there’s little gender difference, with 59.4 percent of women and 59.1 percent of men offering that service.

While both genders (94 percent of women and 84 percent of men) in the early stages of their career indicate a strong interest in wanting to help clients reach their financial goals, men (81 percent) are far more likely to be interested in investment topics, compared to women (59 percent).

So why does Cerulli’s report indicate that the numbers of men and women in investment planning are about equal despite the guys being more interested in investment? It’s got to do with the different degrees of investment planning.

Cerulli explained it this way to AccountingWEB in a written statement: “Money managers focus exclusively on asset management whereas investment planners emphasize asset management as their primary service but also offer targeted ad hoc planning services (e.g., retirement planning or education funding). Financial planners develop comprehensive financial plans. Since the most striking differences between genders are among money managers and financial planners, it demonstrates that women are infusing planning into their practices to a greater degree.”

Because women are less interested in investment topics, that means fewer of them enter money management compared to men, according to the firm.

“Developing and implementing portfolio construction and investment strategy for their clients without any planning appeals more to men,” Cerulli stated.

While financial planning appeals to both sexes, women are more interested in what Cerulli calls “comprehensive planning” that encompasses clients’ financial and nonfinancial lives.

“The majority of financial advisors — of either gender — operate investment planning practices because of the scalability that it affords,” the firm stated. “Advisors often struggle with how to achieve productivity and efficiency while also offering a broad range of services.”

Here are six additional takeaways from the report:

  • On average, women advisors tend to be more interested in holistic interactions with clients than measuring a product’s performance or building a portfolio in isolation.
  • 73 percent of women believe unbiased product recommendations from wholesalers are valuable compared to 43 percent of men.
  • Among entry-level advisors, both genders are about equally interested in financial planning (75 percent of men, 76 percent of women).
  • For new advisors, fewer men (54 percent) want the flexibility of a work schedule, compared to women (76 percent).
  • Entry-level advisors are equally interested in eventually having their own firm (59 percent each).
  • More women (26 percent) than men (16 percent) say that a friend or family member as a successful advisor served as a major factor in their decision for becoming a financial advisor.

While the report was released by Cerulli, the firm’s partners in the project included Sequoia System International, the Investment Management Consultants Association and the Financial Planning Association.

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