What's the key to gender diversity? Inclusion
Committing to gender diversity at every level of your firm goes beyond basic fairness. It just makes good business sense. Consider this: A 2019 McKinsey study found that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile.1 And a 2020 FlexShares study found that women are four times more likely than men to work with a female advisor. 2
The fact is, RIAs that lack gender diversity are leaving a lot of money on the table. It's a market inefficiency that has to change. But how? Here are four ways you can build a more gender inclusive firm.
1. Make inclusion institutional
First, let's talk about what inclusion is and what it isn't. Inclusion means seeking out women's ideas, perspectives, skills, and problem-solving abilities and making sure women feel included, valued, and safe to contribute. It's not simply saying that everyone is equal and welcome. You need to take intentional action to create a culture of inclusion or you risk letting bias limit your firm's potential.
- Have leaders who embrace and promote inclusive principles.
- Create openness in every aspect of the firm.
- Formalize diversity and inclusion training.
- Do not tolerate discrimination of any kind and take decisive action to end it.
- Build a culture of acceptance where it's okay for teammates to bring their individual selves to work.
- Monitor through surveys and other listening tools to find out whether teammates feel a sense of belonging.
- Hold themselves accountable by setting measurable goals.
- Embrace men as inclusion builders.
2. Commit to recruiting and hiring women
Only 13.8% of financial advisors are women3, despite women controlling more than half of U.S. wealth.4 RIA firms need to recruit differently to begin balancing out those numbers. Here are some suggestions:
- Hire for skills and potential because living in an inequitable world means that resumes of equally talented people could look very different.
- Go beyond the usual recruiting grounds and intentionally invite women to apply for positions.
- Build relationships with diversity groups that can help you both broaden your perspectives and connect you to networks of diversely talented people.
- Use senior women at your firm as recruiters who can help other women understand the opportunities available to them.
- Help young women see financial planning as an attractive profession by speaking at schools, attending career fairs, or taking on interns.
3. Invest time and energy in mentoring
As many as 70% of women say insufficient mentoring is one of the biggest obstacles for women advisors.5
It's important to have women in senior leadership positions who can serve as mentors and to create formal mentorship programs that ensure that all teammates have access to mentorship opportunities, but men also need to serve as mentors.
Professional relationships with women multiply opportunities for everyone. Leaders who intentionally invite women to the table for meetings and to make decisions for the firm often gain valuable perspectives. And women who have advocates and sponsors at their firm are often more motivated to help the firm succeed.
4. Find external partnerships to broaden perspectives
We all need help seeing bias and taking proactive steps toward inclusion. Sometimes an outside perspective can bring new information or ideas to your firm.
Invite women to speak on a range of topics—not just to build understanding about gender equity, but also to broaden thinking on investing, planning, client service, operations, and more. Similarly, look for ways your firm can partner with women-led businesses to gain a competency you don't yet have in house. And consider creating a female advisory board that can review your progress and offer insights to help your firm keep moving toward diversity and inclusion.
In such a male-dominated industry, nearly every firm has some work to do. That's okay. As with investing, you can't let past performance stop you from realizing today's gains. Invest in inclusion now. It will pay off today and for generations.
What you can do next
- To learn more about how you can build more diverse and inclusive teams, visit our RIA Talent Advantage® resource page.
- Consider a custodian that invests in your success. If you're thinking about becoming an independent advisor, contact us to learn more about the benefits of a Schwab custodial relationship.
1 McKinsey & Company. Diversity wins: How inclusion matters, 2020.
2 FlexShares. Prioritizing diversity, 2020.
3 Cerulli Associates. U.S. Advisor Metrics, 2020.
4 ThinkAdvisor. Why Diversity Hires Mean Growth for Advisors: Study, 2020.
5 Cerulli Associates. U.S. Advisor Metrics, 2016.