9 Lives for Women Blog

Inside the #1 Job for Women | June 27th, 2012

I’ve seen a wide variety of articles on the top careers for women—and Financial Advisor always tops the list.  In my recruiting years I was often asked to search for FA candidates, and I always came away thinking there were great opportunities, but for a somewhat limited group of women.

The sticking points, in my opinion, are the fact that it takes a few years before you make serious money and that you really have to be a true entrepreneur to succeed.  That said, there are many women who have other sources of income and do fit the entrepreneurial profile and opportunities—and earning potential–are vast.

Even women who did have other financial resources (like a husband’s salary) would tell me that they didn’t want to wait to make money.  I always found this curious because they had spent years volunteering endless hours for no money at all.  And, it’s no small fact that FA positions offer great flexibility, so it isn’t like limited money for commuting to a 60 hour a week job that involves long days and international travel.

Not enough women who could make the FA role work very successfully are considering this career path, especially because women are actively seeking female advisors.  Part of the reason is that financial services firms generally are not doing a very good job of marketing these positions to women:  they don’t meet objections head on or delve far below the surface of the day-to-day responsibilities.

And for that reason I asked Elizabeth Cox, a Certified Financial Planner  in Westport, CT, to give my blog readers the inside scoop on the FA opportunity:

QLots of different sources are listing “financial advisor” as the #1 job for women today.  Why do you think that’s the case?

A.  There are two key benefits to being a financial advisor that would be appealing to women today. First, it’s a way to really touch people’s lives. Clients have to bare their financial truths and this revealing experience necessitates a trust and closeness that fosters a nurturing relationship. FAs can make a fundamental difference in people’s lives and this can be truly rewarding. Second, FAs often work independently–allowing a flexible work schedule for those raising a family. I often start work while my kids are sleeping, spend time with them after school, shuttle them to a late afternoon activity, and return to work after an early dinner. Much work can be done from home. This flexibility can be key for work-life balance.

Q.  Many women (like me) who were not math or economics majors would think that financial advisory work is out of their realm.  Is it really true that just a solid business background is the prerequisite?  What’s your background?

A.  I think to be successful you need to like numbers but not necessarily have an academic background in math or economics. A liberal arts education is a suitable background as long as you are facile with numbers. In my case, I have always enjoyed math but was actually a literature major at a liberal arts college. I also have a masters in international finance and went through a bank training program decades ago that bankers referred to as a “mini MBA”.  Before becoming a financial advisor, I spent more than a dozen years on Wall Street, mostly as a trader of international equities. This has helped me understand investments, but I don’t think I needed this background to succeed as a financial advisor.

Q.  Financial advisors have to develop their own “practices”, right–whether or not they are technically running their own firms?

A.  Yes, unless you just want to be someone’s assistant. Generally, a financial advisor is her own profit center whether she works independently or for a big firm.

Q.  Wouldn’t a true entrepreneurial mindset and capability be important prerequisites as well?

A.  It is very important to have an entrepreneurial mindset as no one tells you how to structure your practice or where to find your clients. Networking is critical.

Q.  In my previous recruiting life many women who needed an immediate income did not pursue the financial advisory route.  Do you typically need other financial resources if you want to begin a career as a financial advisor?  Are there situations where you can get a reasonable base salary as you are building your practice?

A.  Some big firms hire assistants on salary, but this is rare and the salary would not be high. So if your intention is to build your own practice as most financial advisors do, then you can expect a low income in the first two to three years. This certainly fosters the entrepreneurial spirit!

Q.  Let’s be more specific about what women can expect in terms of compensation.  What do you think new FA compensation is today?

A.  In the first year or two, you can expect to earn only about $20k-$30k as you build a client base. You can expect this amount to double by the third and double again by the fifth year. With 5 to 7 years of experience, you can expect to make a low six-figure income.

Q.  When I was a recruiter I also noticed that many companies practically took anyone off the street and gave them the title “Financial Advisor”.  In fact, I’ve raised my eyebrows about some of the people that were hired into these roles.  What are the questions women should ask companies to be sure they are considering very professional opportunities that seek out top-notch candidates and provide the right training?

A.  This is a great question. For many big firms, the title “Financial Advisor” simply means “salesperson”. Often these people pass a securities test called “Series 7” that allows them to sell financial products to individuals on behalf of brokerage firms. This is a sales license, not, in my opinion, a qualification to offer financial advice. I am a Certified Financial Planner or “CFP”. There are many qualifications out there, but I believe the CFP designation requires the most rigorous training. It requires proficiency in financial planning, investments, insurance, tax, retirement and estate planning. I would look for a position that encourages employees to seek this designation. I would also look for an organization that is transparent about the way it is compensated by clients. For example, a “fee only” financial advisor charges only for investment and financial advice given and is does not compromise their objectivity by being compensated by commission or products sold.

Q.  Do you agree with one of my opening statements that women prefer to have a female financial advisor? 

A.  Yes. Women like to fully understand financial products before they invest in them and understand how investing ties into their overall financial picture. They do not like to be talked down to. In my experience, many of my clients have shied away from repeat experiences with male advisors because they find that male advisors can be condescending and not patient with answering questions and providing financial education. Of course, this is a generality and many women are very loyal to their male advisors.

Q.  In the seven years you have been a financial advisor have you noticed that women are becoming more financially savvy–or do you still see a big knowledge gap?

I tend to see a persistent knowledge gap.  Employed men and women in all industries have a lot more financial knowledge than women who are not currently pursuing careers. I think this is in large part because so many financial questions and decisions result from employment. For example, how do you invest your retirement account, should you partake in a health savings account, should you pay down your mortgage with excess savings (if you are so lucky) or stick these funds in a 529 account for college savings? Those in the workforce tend to be much more in tune with their money and can more easily make these decisions. I often work with spouses or ex-spouses that may have taken time away from the workforce or are working part-time to raise a family. These women have to work much harder to stay abreast of the latest financial trends and products. It’s an unfortunate reality that financial and tax planning have become increasingly complex and more of an individual responsibility. There are fewer safety nets like pensions, and even Social Security is a question mark. So in my opinion, helping women, especially, with individual financial planning has never been more important than it is now.  —KAS

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