Back in the days when Carson’s Dr. Julie Ragatz, VP, Advisor Growth Strategy, was working alongside Kristi Rodriguez at Nationwide, she did research on the perceptions students at HBCUs and Black advisors had about working in the financial services industry.
That research sparked a passion in her, and she found that there was a need to get good data on the challenges and opportunities facing financial advisors from underrepresented backgrounds.
“We can’t take a positive direction forward until we have a better idea of the challenges we’re facing,” Ragatz said to the women and allies gathered at the 2023 Excell Represent conference.
That’s the purpose behind Carson Group’s State of Women in Wealth Management research—to collect good data on the challenges and opportunities facing women in financial services. So last year, we launched the second installment of the mixed-methods study (both quantitative and qualitative research) to uncover challenges and opportunities facing women.
What we found was that women remain underrepresented in financial services and continue to face barriers to getting into and staying in the industry. But the good news is these barriers are things firm owners and the collective industry can work to solve.
The Business and Moral Case for Increasing Representation of Women
Why focus this annual research project on women? Because women play a critical role in our economy and there is a need to offer them well-timed financial advice, Ragatz said.
Plus, it’s a simple matter of math—and demand.
First, it’s about the numbers. Women make up more than 51% of the population, according to Statista. Plus, they are increasingly becoming the primary income earners—and financial decision-makers—in their households.
Second, there is the demand. Edelman Financial Engines found that more than 80% of people prefer to work with an advisor from a similar background. Carson’s research drilled down further and found that executive women actually prefer working with women advisors because they can truly relate to their experiences.
Third, women have historically been conditioned to be “better” at the things that make a great advisor—being attentive and caring, having empathy and managing relationships. Plus, they are better with the numbers: Research from Fidelity found that women are better investors than men, outperforming them by 40 basis points.
Fourth, women are likely to leave an advisor when their partner passes away. This is because, Ragatz said, oftentimes the woman’s perspective in the planning relationship for opposite-sex couples is not taken into account. So when her husband dies, she’ll move on to an advisor who does take her perspective into account.
While these four reasons represent the business case, there is also the moral case for wanting to increase representation of women in the industry, which Ragatz notes is arguably the most important.
“The powerful motivation in my mind to address the disparities of women in this profession are certainly financial—but it’s also a case of social justice,” Ragatz said. “We want to create industries in which everyone has the opportunity—through hard work and dedication—to build a good business.”
2 Important Issues to Address for Progress
While the research had multiple findings that were interesting, Ragatz specifically highlights two that haven’t been talked about as much as the others and that we need to address to make progress. Those findings were (1) sponsorship is critical to advancing women in the industry; and (2) the Queen Bee Syndrome, which is essentially women discriminating against other women, is a problem.
“These are [two] things we thought represent a unique perspective on the female [representation] question,” Ragatz said.
Sponsorship versus mentorship. Sponsorship is when you open doors for people, putting your social capital on the line to get them opportunities. Mentorship is when you give them advice on how to open doors themselves.
The 2023 research asked questions about mentorship and found that the most impactful mentors for respondents were actually sponsors. And we need more of that type of advocacy to advance women in the industry—especially when women represent just shy of 30% of CFP professionals, a stat that has remained fairly stagnant for a decade.
In a recent episode of ReFrame, the live series that dives into our Women in Wealth Management research themes once a month, mentorship expert Kellan Brown noted that if you are a mentor, you should be sponsoring your mentees. You should connect them with people, advocate for them and create opportunities for them to showcase their work.
If you’re not feeling compelled to do that, it might be a question of what you need to do to get to the point where you feel comfortable sponsoring them. Perhaps the mentee needs to work on certain skills before you put your relational and social capital on the line for them. But finding out why your mentorship hasn’t turned into sponsorship is also a helpful tool for developing professionals.
“Being a good sponsor is putting your capital on the line, taking action, giving constructive feedback and showing up,” Ragatz said.
Queen Bee Syndrome. The finance bros and old boys’ club have historically been a barrier called out when talking about this topic. But this year, respondents noted that Queen Bees are just as bad—if not worse—than those two.
Instead of working collaboratively to lift each other up, some respondents noted that some women in the industry are competitive with and discriminatory against other women. This internalized sexism, known as the Queen Bee Syndrome, is a result of having to survive in male-dominated spaces for so long.
“This was a dominant theme in a lot of our interviews,” Ragatz said. But it doesn’t have to be that way. She shared a story of Carson President Teri Shepherd slipping her a note before her Excell Represent presentation that said, “You will be amazing.”
In the medal ceremony for the 2024 Paris Olympics women’s gymnastics floor competition, Brazilian athlete Rebeca Andrade received her gold medal. In a great show of support, Simone Biles and Jordan Chiles, the silver and bronze medalists, respectively, bowed to her (though Chiles later lost her medal after an appeal). The picture went viral.
“It was the right thing to do,” Biles, who is the most decorated American gymnast in the history of the Olympic games, said in a press conference after the competition. And if there was ever a picture representing the abundance mindset necessary for the antidote to Queen Bee Syndrome, that was it.
“How can we, as a people committed to diversity and inclusion, create an attitude of abundance?” Ragatz posed. “There is enough. There are enough clients. There are enough opportunities. There are enough mentors. There is enough.”
Limitations, Future Research and Final Thoughts
Like every study, the State of Women in Wealth Management research had limitations. The first was a small sample of about 300 participants. Despite that, however, the research team was able to draw statistically significant results.
The second, and perhaps more significant limitation was that the sample size was not large enough to address the intersectionality of women operating in this business. For example, the sample size was largely white women and did not address the varied experiences faced by Black, Latina or Asian women specifically.
“That is something that my team, the team at Carson and all the people we partner with are really committed to working through next year,” Ragatz vowed.
It’s important to take those perspectives into consideration in future research so we can get a more accurate picture and better attract and retain women with multiple intersections. This can help us better retain all women and open doors to new markets.
“When you look at the importance of diversity within any industry, it’s about having options for people to pick the advisor, the consultant, the attorney, the physician who feels like they speak to their situation,” Ragatz said.
And we must continue to uncover the barriers and develop solutions to solve them, she added.
“As you look at an industry that has barriers to success,” Ragatz said, “that’s just a problem that calls out to be solved.”
