Facing workforce shortage, financial firms seek greater diversity
Industries nationwide have been struggling to find workers, and the situation is no different in wealth management and financial planning, where recruitments efforts are becoming more urgent.
The situation is especially dire when it comes to recruiting minorities and women, who traditionally have not entered the financial planning fields, industry observers said.
Kathryn M. Brown, founder and principal of Morton Brown Family Wealth in Allentown, pointed to Bureau of Labor statistics from 2016 that show women make up about 31 percent of the financial services industry. The workforce is about 6 percent African American, 7.7 percent Asian and 7.1 percent Hispanic or Latino.
The numbers, however, mean that women and minorities could be part of the solution to the larger workforce problem, Brown and others said. Financial services, like just about every other industry, faces challenges with developing its future workforce. After the financial crash more than 10 years ago, 12 percent of advisers left the industry, Brown said, and a third of the remaining advisers intend to retire over the next decade.
That situation has spurred efforts to recruit minority and women students at both the college and high school levels, said Kathy Gutierrez, director of human resources for RKL LLP, a professional and financial services firm based in Lancaster. Recruitment efforts must reach students early, so they can see that the skills needed to be successful go beyond math, which might make the industry more attractive than they first thought, Gutierrez said.
“It’s more than just the numbers,” said Gutierrez, who earned an accounting degree in 2005. Accounting companies need creative thinkers and problem solvers who might find careers in consulting or even at the FBI, she said.
For her, the training in accounting and as an auditor led to her current position in human resources, she noted. But even with starting salaries of $55,000 for a staff accountant, she said, recruitment is becoming increasingly difficult.
Better but still low
Lisa Strohm, founder and CEO of The Athena Network Financial & Life Management firm in Center Valley, noted that few women were in the financial services industry when she started in 2001.
“As time has passed, I’ve seen more women join the ranks of financial advisers,” she said adding that most studies show that the participation rate for women is still quite low. In fact, she said, the national board representing certified financial planners has been increasing efforts to recruit women.
“In 2013, the CFP Board launched its Women’s Initiative, which, among other endeavors, makes recommendations for encouraging and supporting women to pursue careers in financial planning, and to undertake efforts and campaigns to address the dearth of women in financial planning,” she wrote in an email.
Last fall, the CFP Board held its first Diversity Summit in New York. CFP stands for certified financial planner.
Demographic shifts nationwide could help lure more women, Brown, Strohm and Gutierrez said.
“Many believe that with more women controlling their family’s wealth, there will be an increase in demand for female advisers,” Strohm said.
The unique rigors of the industry - such as a lack of work-life balance and earnings that are commissioned-based - will continue to make recruitment difficult, she said. But that could change through an emerging shift toward salary-based advisory roles, Strohm added.
Brown pointed out that the low numbers for minorities and women mean that potential recruits also lack an abundant number of role models to emulate.
The stereotypical image of a male number cruncher is hard to overcome, she said. But the reality of financial advice is changing
As clients learn to manage their own stock portfolios, she said, they still are interested in the aspects of planning that an adviser can offer. Brown said such work might be more attractive to non-traditional candidates because it involves building relationships with clients. In fact, she said that aspect is one of the main reasons she enjoys her work.
“Once I understood the role could be performed a different way, it opened up a whole new sense of opportunity,” Brown said.
“While it sounds cliché, one of the best aspects of being an adviser is being able to help your clients and make a positive impact on their lives,” she said. “Many women are interested in making a positive social impact, so if this aspect of the field is accentuated by college career centers and recruiters, more women may start to consider the field.”