In search of women.....

[ajm184]

A call to the industry and Mr. Brown's firm in particular about the need for women FA's.

http://thereformedbroker.com/2018/04/11/i-am-failing/

[The White Coat Investor]

More skewed than orthopedics. I was telling a pre-med student last night at a talk that for all the problems medicine has, it's actually one of the most egalitarian professions out there.

[jfoxcpacfp]

I don't really get it myself and think the industry is still a product of the tough old brokerage ball-busting (can I say that??? Please delete if not.) firm model which produced so many of today's "planners". The tide is gradually turning but it will take more years. It used to be the same for CPAs and I think there is equilibrium now if not more females.

If you think there aren't many women planners, you should look around a crowded meeting for people of color - mostly a vast sea of white and I find it embarrassing. I don't know that there are real barriers to entry, I just don't think planning has been emphasized as a good career path for minorities. It is ripe for the picking.

[ENT Doc]

I have a few questions for this author and anyone else advocating for the outcomes-based approach to evaluation/recruitment/hiring:

1. What is the right percentage?

2. How did you come to that conclusion?

3. If your industry had an evaluative/hiring process that was sex/color blind and evaluated people as individuals on their merits, and if the results of that evaluative process resulted in a different % mix from #1, why is that a problem?

[Anne]

ENT Doc wrote:

I have a few questions for this author and anyone else advocating for the outcomes-based approach to evaluation/recruitment/hiring:

1. What is the right percentage?

2. How did you come to that conclusion?

3. If your industry had an evaluative/hiring process that was sex/color blind and evaluated people as individuals on their merits, and if the results of that evaluative process resulted in a different % mix from #1, why is that a problem?

Click to expand...

I find this is a common response.  My answer is that the low number of women in finance (just like in STEM professions) suggests that females are not going into those professions because they just aren't considering them.  To give a personal example, I never considered pursuing an undergraduate degree in engineering just because everyone I knew who did that was male.  Nobody told me I couldn't do it, and I did very well in all math and science classes throughout high school and university, and I'm sure all of my mentors and parents would have encouraged me if I had said I wanted to major in engineering.  But I didn't even consider it.  And looking back, I kind of wish I had--because I personally think that engineering teaches you to think critically better than any other degree field.  I don't think it's necessarily an issue from a hiring point of view, but if half the population doesn't consider a career field due to preconceived notions/lack of role models the industry will miss out on talent and the individuals may miss out on what may have been their true calling.

[Craigy]

Queue Mitt Romney's binders of women...

Seriously though, it's definitely not for a lack of smarts.  Plenty of female CPAs out there.  I felt like I was in the minority getting my accounting degree.

I imagine the hours and high pressure lifestyle don't really line up with what most women are looking for.  In general there's just not a lot of women in professional commission-driven sales type jobs to begin with.  Like most sales positions, you can pretty much hit and quit the financial advisory business, not many barriers to entry, and a lot of people might test the waters but quickly drop out.  I'm sure you can make a decent lifestyle working regular hours, but the successful ones work all the time and likewise they grab all the clients.

I think there's definitely a legacy component, and a societal perception component, but I think the main reason is just choices people make when they choose their career paths.

[Kamban]

I am all for encouraging and supporting the opposite sex to consider going into fields that are traditionally dominated by the opposite sex - math and engineering for women and nursing and school teaching for men.

But I against fixed quotas that are either gender or race based. After all the encouragement and support I think the most qualified person should be chosen for the education or job. Otherwise we will be sending a message that however hard you try, you might not make it because a quota was set aside for someone else. I experienced that reverse discrimination in India and hated it.

[preetishah]

I do believe it's because initially this was a commission based profession with an emphasis on sales rather than proper planning and certification.  I personally cannot sell to save my life, I hate it with a passion, including all the networking events where you have to make small talk and hand out cards.  I am not great at "lunching" with colleagues either, though I always enjoy it when we do.  But I think alot of us women prefer sitting behind our computers doing the work and developing deep relationships with our clients, not going out and getting new ones.

Luckily there are more salaried jobs available for people to get their start, I survived working for senior financial planners on a tiny $35k salary, and only after getting my CFP and six years of experience did I try to open my own firm.  Had I not had the option of a salaried paraplanner position, I would not have survived.

So I think we may see more women coming into the profession now, since there are a ton more paraplanner positions available then when I started.

[AnjaliFIT]

I could write a book on this topic but I'll try to keep it short!  Diversity - whether it is defined as women and/or people of color - does not just happen at a firm.  It has to be implemented as not only part of the hiring process but also part of the firm. I worked at one of the Big 4 for 6+ years before transitioning to financial planning and although their numbers aren't quite 50/50 they do a decent job of bringing in women and PoC.  However, they spend A LOT of time and money to do that. I thought Big 4 lacked diversity until I went into financial planning and was almost in shock with how little women and PoC there were.  Its a systematic issue that requires a lot of work and effort to overcome.  Things are changing but it is very slow change.  I am glad to see more women and younger advisors (myself included) coming into the industry and believe there will be a sweeping change as the current advisors start to retire and sell their practices.  But there still needs to be support and a process that allows women and PoC to succeed.

[Humilem]

@ Kamban.

I thought the Dalits always got the short end of the stick in India. Can you share your experiences please.

[frickshin]

AnjaliFIT wrote:

I could write a book on this topic but I’ll try to keep it short!  Diversity – whether it is defined as women and/or people of color – does not just happen at a firm.  It has to be implemented as not only part of the hiring process but also part of the firm. I worked at one of the Big 4 for 6+ years before transitioning to financial planning and although their numbers aren’t quite 50/50 they do a decent job of bringing in women and PoC.  However, they spend A LOT of time and money to do that. I thought Big 4 lacked diversity until I went into financial planning and was almost in shock with how little women and PoC there were.  Its a systematic issue that requires a lot of work and effort to overcome.  Things are changing but it is very slow change.  I am glad to see more women and younger advisors (myself included) coming into the industry and believe there will be a sweeping change as the current advisors start to retire and sell their practices.  But there still needs to be support and a process that allows women and PoC to succeed.

Click to expand...

Excellent point. When I interviewed at Vanderbilt, I asked them how they were able to do such a fantastic job of achieving diversity (house staff, faculty, everyone). The gentleman who interviewed me took a moment and said, "Very deliberately." He then went on to talk about the processes they have for pursuing diverse representation. I guess it's working for them, Vandy is one of the premiere medical institutions in the country.

[ENT Doc]

Anne wrote:

ENT Doc wrote:

I have a few questions for this author and anyone else advocating for the outcomes-based approach to evaluation/recruitment/hiring:

1. What is the right percentage?

2. How did you come to that conclusion?

3. If your industry had an evaluative/hiring process that was sex/color blind and evaluated people as individuals on their merits, and if the results of that evaluative process resulted in a different % mix from #1, why is that a problem?

Click to expand…

I find this is a common response.  My answer is that the low number of women in finance (just like in STEM professions) suggests that females are not going into those professions because they just aren’t considering them.  To give a personal example, I never considered pursuing an undergraduate degree in engineering just because everyone I knew who did that was male.  Nobody told me I couldn’t do it, and I did very well in all math and science classes throughout high school and university, and I’m sure all of my mentors and parents would have encouraged me if I had said I wanted to major in engineering.  But I didn’t even consider it.  And looking back, I kind of wish I had–because I personally think that engineering teaches you to think critically better than any other degree field.  I don’t think it’s necessarily an issue from a hiring point of view, but if half the population doesn’t consider a career field due to preconceived notions/lack of role models the industry will miss out on talent and the individuals may miss out on what may have been their true calling.

Click to expand...

Let's break this down further.  You said "low" number of women in finance.  What is "low"?  Your use of this term means you must have a definition of "high" and "just right".  So now, see previous questions.

I am all for exposing men and women to different fields or supporting those who are interested.  However, males and females can be the role model for the opposite sex.  Happens all the time.  We also have to recognize that steady states may be reached in different fields that are different from the underlying population percentage that have nothing to do with exposure - it might actually be that people are just more or less inclined to certain fields.  The problem with defining things as "low" or "not enough" is that it rejects that idea in the pursuit of what one person believes the market should be.  Central planning never gets this more right than the market does.

What I am opposed to is the pursuit of outcomes over a process that is fair and open.  Diversity should be the derivative of a fair and open process of evaluation, not the goal to be pursued.  If it is the goal to be pursued then you will naturally have to be more encouraging towards or lowering standards for certain sexes, races, etc.  And that is inherently discriminatory.

[Lithium]

ENT Doc wrote:

Anne wrote:

ENT Doc wrote:

I have a few questions for this author and anyone else advocating for the outcomes-based approach to evaluation/recruitment/hiring:

1. What is the right percentage?

2. How did you come to that conclusion?

3. If your industry had an evaluative/hiring process that was sex/color blind and evaluated people as individuals on their merits, and if the results of that evaluative process resulted in a different % mix from #1, why is that a problem?

Click to expand…

I find this is a common response.  My answer is that the low number of women in finance (just like in STEM professions) suggests that females are not going into those professions because they just aren’t considering them.  To give a personal example, I never considered pursuing an undergraduate degree in engineering just because everyone I knew who did that was male.  Nobody told me I couldn’t do it, and I did very well in all math and science classes throughout high school and university, and I’m sure all of my mentors and parents would have encouraged me if I had said I wanted to major in engineering.  But I didn’t even consider it.  And looking back, I kind of wish I had–because I personally think that engineering teaches you to think critically better than any other degree field.  I don’t think it’s necessarily an issue from a hiring point of view, but if half the population doesn’t consider a career field due to preconceived notions/lack of role models the industry will miss out on talent and the individuals may miss out on what may have been their true calling.

Click to expand…

Let’s break this down further.  You said “low” number of women in finance.  What is “low”?  Your use of this term means you must have a definition of “high” and “just right”.  So now, see previous questions.

I am all for exposing men and women to different fields or supporting those who are interested.  However, males and females can be the role model for the opposite sex.  Happens all the time.  We also have to recognize that steady states may be reached in different fields that are different from the underlying population percentage that have nothing to do with exposure – it might actually be that people are just more or less inclined to certain fields.  The problem with defining things as “low” or “not enough” is that it rejects that idea in the pursuit of what one person believes the market should be.  Central planning never gets this more right than the market does.

What I am opposed to is the pursuit of outcomes over a process that is fair and open.  Diversity should be the derivative of a fair and open process of evaluation, not the goal to be pursued.  If it is the goal to be pursued then you will naturally have to be more encouraging towards or lowering standards for certain sexes, races, etc.  And that is inherently discriminatory.

Click to expand...

I think the market is effective at the individual and small organization level.  At the population/systems level, not so much.  I don't think it is particularly difficult to make a case that hiring a white male with the highest qualifications is the decision that most effectively meets the micro goals, but that if this decision is made thousands of times, it hurts the field at a macro level.  As a stark example, I do not think that OB/Gyn would be as well off if 69% of its physicians were still male, as was the case in 1980, even if 69% of the most qualified candidates are male.

At what point does the added benefit from increasing diversity at the macro/system level supersede the benefit of taking the most qualified candidate at the micro level?  It depends highly on the field.  I am not convinced diversity adds much of anything in some fields (I could not care less whether my anesthesiologist or radiologist is male or female, black or white), but I can certainly see how the financial planning industry could be more robust and lucrative if it attracted more clients, even if it meant taking less qualified women or minorities.

The hard point, addressed in questions 1 and 2, is how to operationalize it, aside from increasing exposure.  Imposing quotas is rarely worth it.  Too much risk in getting the optimal numbers wrong, and it's seldom worth the moral cost of imposing reverse discrimination.  The linked article states that 16% of FA's are women.  That seems "low," but I don't pretend to be smart enough to know that the field would be better off by instituting higher quotas.  If it were 1 or 2%, it would be much easier to contend that the financial services industry is harmed by the lack of diversity.

[Anne]

ENT Doc wrote:

Anne wrote:

ENT Doc wrote:

I have a few questions for this author and anyone else advocating for the outcomes-based approach to evaluation/recruitment/hiring:

1. What is the right percentage?

2. How did you come to that conclusion?

3. If your industry had an evaluative/hiring process that was sex/color blind and evaluated people as individuals on their merits, and if the results of that evaluative process resulted in a different % mix from #1, why is that a problem?

Click to expand…

I find this is a common response.  My answer is that the low number of women in finance (just like in STEM professions) suggests that females are not going into those professions because they just aren’t considering them.  To give a personal example, I never considered pursuing an undergraduate degree in engineering just because everyone I knew who did that was male.  Nobody told me I couldn’t do it, and I did very well in all math and science classes throughout high school and university, and I’m sure all of my mentors and parents would have encouraged me if I had said I wanted to major in engineering.  But I didn’t even consider it.  And looking back, I kind of wish I had–because I personally think that engineering teaches you to think critically better than any other degree field.  I don’t think it’s necessarily an issue from a hiring point of view, but if half the population doesn’t consider a career field due to preconceived notions/lack of role models the industry will miss out on talent and the individuals may miss out on what may have been their true calling.

Click to expand…

Let’s break this down further.  You said “low” number of women in finance.  What is “low”?  Your use of this term means you must have a definition of “high” and “just right”.  So now, see previous questions.

I am all for exposing men and women to different fields or supporting those who are interested.  However, males and females can be the role model for the opposite sex.  Happens all the time.  We also have to recognize that steady states may be reached in different fields that are different from the underlying population percentage that have nothing to do with exposure – it might actually be that people are just more or less inclined to certain fields.  The problem with defining things as “low” or “not enough” is that it rejects that idea in the pursuit of what one person believes the market should be.  Central planning never gets this more right than the market does.

What I am opposed to is the pursuit of outcomes over a process that is fair and open.  Diversity should be the derivative of a fair and open process of evaluation, not the goal to be pursued.  If it is the goal to be pursued then you will naturally have to be more encouraging towards or lowering standards for certain sexes, races, etc.  And that is inherently discriminatory.

Click to expand...

Sigh.  not really interested in a back and forth on this...but saying the term "low" does not mean that I have a definition of other terms.  The article states a statistic that women comprise 50.8% of the population but 15.7% of financial advisors.  Take that what you will.  If it's not low to you, fine.

Contrast that to the recent LA Times article citing that only 41% of current OB/GYNs were men with only 17% of OB/GYN residents being men.  And the male OB/GYNs in the article were stating that that trend was weakening the field.

Yes, people should be hired based on merit.  But there are plenty of studies that demonstrate internal bias in the hiring process based on gender or perceived ethnicity based on name or attached pictures.  Many of us are not even aware of our own internal biases.  I am personally of the opinion that there should be processes in place to promote diversity in the workplace.  And I don't think you need to lower the standards in order to do so.  Perhaps sometimes however it will involve valuing qualities that are different from the standard qualities one is used to looking for.

[AnjaliFIT]

I would say that unfortunately many of the systems are not fair and open - marginalized groups face inherent barriers to entry in many professions.  If the playing field was even and there were no internal biases or systematic discrimination then this wouldn't be an issue.  But the problem is that it is not a level playing field for people in marginalized groups so I would argue that the only way to ensure a process that is fair and open is to first address the outcome.  If you address the outcome and identify the systematic issues only then will your result be one that is fair and open.