How Leaders Are Addressing the Adviser Gender Gap

Although they make up more than half the population, currently less than 20% of financial advisers are women. This raises the question of just what is so unwelcoming about the advisory business.


Advisor Group announced last week that it would hire Kristen Kimmell as a new executive vice president and head of business development, effective in August.

According to the firm, the appointment is part of a broader strategic plan to recruit more advisers from multiple channels. Kimmell comes from RBC Wealth Management, having spent the past two years there as head of adviser recruiting and field marketing for the company’s U.S. operations.

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In a statement announcing her pending appointment, Advisor Group says Kimmell will spearhead a lasting push to recruit advisers from outside the independent channel, as well as from ensemble and enterprise firms, banks, wirehouse breakaways, and hybrid firms. In the statement, Advisor Group says it is proud to be bringing aboard one of the top female leaders in wealth management recruiting, citing Kimmel’s two decades of experience running various key business units across the RBC organization.

Following the hiring announcement, PLANADVISER spoke directly with Kimmell about her experience in this industry and her hopes and expectations for the new job at Advisor Group. Of course, business development and commercial success will be a constant focus, she explains, but there is also a big opportunity to help address the industry’s longstanding lack of full diversity and inclusion across genders and racial/ethnic groups.

A Forced Reckoning

“Thanks in part to the pandemic, but also due to other forces shaping the adviser industry, I believe we are at a crossroads, and we have a real opportunity to highlight the importance of hiring more diverse candidates,” Kimmell says.

Citing her own experience, Kimmell says there has been a misunderstanding of what it takes to be a financial adviser, such that many people mistakenly feel being an adviser is not “for them.” Add this fact to the broader systemic and cultural hurdles standing in the way of marginalized communities and she says it is clear why the adviser industry is so heavily white and male.

“We have myth-busting to do, quite frankly,” she says. “Working in this industry is not about being a math prodigy or about doing hours and hours of market research every day. It’s about helping your clients identify and pursue goals. It’s about being a good steward. Additionally, we can have flexibility in our working lives, and these careers can involve social responsibility and giving back. This is an important part of the story of being a financial adviser. The fulfilling nature of this career hasn’t always been presented or portrayed very clearly.”

Kimmell says the COVID-19 pandemic has forced a sort of reckoning regarding work-life balance and caregiving. In other words, due to the impacts of various lockdowns and pandemic restrictions, adviser industry leaders have been forced to confront some of the same issues that have prevented many people from working in financial services—challenges in securing child care, a lack of access to reliable transportation, the need to work irregular hours, etc.

“Due to the pandemic, many firms were forced to create a working environment that is much better suited to supporting more diverse people, to support working mothers and caregivers for the elderly, for example,” Kimmell says.

Beyond the barriers of perception, there are practical issues standing in the way of fuller representation. In late April, the Financial Industry Regulatory Authority (FINRA) issued a formal request for comments from broker/dealers (B/Ds) and financial advisers on supporting diversity, equity and inclusion (DE&I) in the financial services industry. The vast majority of the comments agreed that regulators can and should act to address this matter.

Many commenters cited the challenging and often convoluted licensing process required to be a practicing adviser as a serious barrier to new entrants—especially those who have not had prior financial services industry experience or a formal business education. Suggested solutions from the industry include eliminating the forced 180-day waiting period triggered by a third failed “top off” examination, directly involving community colleges in the licensing process, and making remote services a permanent feature of FINRA’s testing approach, even after the COVID-19 pandemic ends.

“All this stuff is starting to sink in, slowly,” Kimmell says. “We have a long way to go, but we are getting this discussion out there. I think there is pretty broad agreement that we can’t go back to where we were at the start of 2020. The pandemic has forced us to take a hard look in the mirror. Change is difficult in an industry like this. It may not happen so rapidly, but we have to push it forward.”

Asked for her view on what role compensation issues play in this discussion, Kimmell says the way people are payed as they enter a new career certainly matters, but she sees this as just one of many interrelated issues.

“I think the compensation structure issue is real, but the lack of representation is about much more than this single issue,” she explains. “If that were the one single barrier, we would have figured it out by now, quite honestly. Again, it comes back to educating people and letting them truly understand what this role is and what this industry does—and then truly welcoming them.”

Insights From the Data

In order to help detail and rectify the gender imbalance in the advisory industry, Carson Group recently partnered with Hidden Insights Group on a study to identify the biggest challenges women face in choosing a career as a financial adviser. The firms note that although women make up more than half the population, currently less than 20% of financial advisers are women. They also say participants in the quantitative and qualitative survey represented an elite group of female wealth advisers and financial planners from across the country, most with more than a decade of professional experience and more than 50 clients.

Teri Shepherd, co-president of Carson Group, says one of the main lessons the organizations learned through the research is that women prefer to work in team-first environments—as part of a functional structure that supports and highlights each member of the team for the specialties and skill sets she brings to the client experience.

“This stands in contrast to the more traditional practice we’ve seen for decades, where a single adviser, primarily male, is solely spearheading the direction of the firm,” Shepherd says.

Nearly 60% of participants cited “firm culture and leadership” as their top hurdle when considering joining the industry. At the same time, many say their efforts to balance the needs of their career and family have led to the perception that they are less committed or engaged than their male counterparts.

Echoing a report published in June by the financial services employment equity advocacy group WIPN, Carson Group says 55% of respondents feel mentoring and coaching were critical to their development. By the same token, female advisers specifically called out the need for enhanced training programs that focus on relationship building and financial planning.

A Few Key Lessons to Learn From Wealth Managers

Guidance about investing and the accumulation of assets is only the beginning of genuine financial planning—a fact that has already been embraced by forward-thinking wealth managers.

Elijah Kovar is a founding partner of Great Waters Financial and leads the firm’s Richfield, Minnesota, office.

Though he does not service defined contribution (DC) retirement plans, instead focusing on wealth management clients, he has a lot in common with the typical retirement plan adviser seeking to grow his business in the evolving environment of 2021.

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First of all, Kovar established his practice after breaking away from a larger financial services entity, with the goal of “doing things differently.” The same is true for many of the top DC-focused retirement planning practices in the U.S. today, even as the broader industry experiences substantial consolidation.

“We started our practice in 2012, my partners and I, and our goal was to do a type of planning we hadn’t seen in the firm we had been working in,” Kovar tells PLANADVISER. “Their focus was squarely on the accumulation of assets and the sale of financial products. What we aimed to do is put together a plan to systematize and scale true financial planning.”

This focus on scale and efficiency is something else Kovar and his firm have in common with DC-focused firms.

“We have developed a unique model where we have a centralized group of five to seven financial planners who do all the heavy lifting of crafting individual financial plans for our clients, and ultimately they are making every single recommendation,” Kovar explains. “They are considering everything from the use of Roth conversions to the best ways to draw Social Security, and they do advanced cash flow modeling. We rely on MoneyGuidePro to deliver this.”

At Great Waters, the work of these financial planners is brought to market, as it were, by about a dozen client-facing advisers. These are the people who are actually interfacing with the clients and helping them to create goals and implement the recommendations flowing from the analytical team. Currently, each central planning adviser supports the field work of two or three client-facing people.

By using this scalable hub-and-spoke approach, Kovar says, the firm is able to provide what he describes as top-notch wealth management services to clients with substantially fewer assets than those generally serviced by the wealth management industry. This is another area where Kovar’s practice, and its goals and challenges, parallels the typical DC plan adviser’s business. Plan sponsors increasingly expect advisers to be able to deliver personalized advice and education for broad groups of participants—and to do so affordably and in an unconflicted manner.

“We have endeavored to make this type of individualized planning service available to clients with as little as $100,000 of investible assets,” Kovar explains. “Through this work, we have been able to help a lot of people with relatively modest means to pull that retirement trigger, which is really fun and rewarding. Allowing people to actually retire with confidence, and an income plan, is at the heart of what we are doing.”

Kovar says his practice has come to embrace a concept that is also increasingly important to DC plan services: “Advisers, for a long time, have thought that their clients would not be willing to rely on a computer to manage their investment portfolio. In fact, this is not true, and consumers are getting wiser and wiser about the fact that computers are doing a lot of the portfolio management behind the scenes. They know it is wrong for their adviser to only be providing investment-focused services while charging a premium fee.”

All of these points were echoed in another recent PLANADVISER interview with Beau Henderson, whose wealth management practice, Rich Life Advisors, focuses almost exclusively on serving investors who are within a 10-year window of retirement. Rich Life Advisors was founded in 2007 with a focus on individual retirement planning, Social Security optimization and beneficiary liquidity planning.

“We founded the firm based on the belief that there was a lack of truly holistic retirement planning advice available for people,” Henderson says. “That vision has served us well ever since, including during this challenging time of the pandemic. I hate to be critical, but honestly, the bar is still pretty low out there in terms of what the typical adviser can do to actually help an individual create an efficient retirement spending and estate strategy.”

Like Kovar, Henderson believes today’s near-retiree investors have caught onto the fact that they need more than just advice about asset accumulation—and they will vote with their feet when they feel their advisers aren’t meeting their needs. Some of the basic service-level expectations that are emerging, they suggest, include the provision of guidance about Social Security optimization, the ability to forecast and budget for health care expenses, and the development of estate/legacy plans. Advisers might not have to be complete experts in all these topics to be successful, but they must be able to navigate holistic planning discussions and effectively collaborate with the appropriate third-party providers.

“What does more effective retirement income advice look like?” Henderson asks. “In my view, a lot of it has to do with creating tax diversification—that is, making sure people aren’t just hitting retirement with all their money stocked away in a traditional 401(k) plan. For the vast majority of people, using both Roth-style accounts and traditional tax-sheltered savings will be important.”

Among the biggest issues Henderson sees in the marketplace today is the tendency of (unadvised) investors to use the required minimum distribution (RMD) age as the main proxy/input in deciding when to start drawing down their tax-advantaged savings. Retirees need to remember that every year they wait for the RMD age, the more quickly their tax-advantaged money will ultimately have to come out in the future, which means the annual distributions and the annual taxes are potentially going to be higher. Advisers and accountants should look at this dynamic very carefully and help people make the optimal decision for them.

Henderson notes that many of his clients ultimately choose—thanks to his suggestions—to enact small-but-regular conversions of tax-sheltered assets into after-tax Roth accounts. Sometimes this strategy may result in a person paying more income tax in a given year than they otherwise would have, but in the long run, the strategy proves more effective than simply deferring taxes as long as possible.

Beyond the importance of tax planning, Henderson and Kovar preach the central importance of helping people actually envision what they want their life in retirement to look like. As Kovar explains, many retirees report feeling lost and purposeless shortly after they leave work.

“Without the purpose that work brings, they begin to wonder who they are, and what they should do,” he says. “However, with good planning and some intentionality, retirement can be a person’s next greatest adventure.”

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