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Closing the Gender Gap in Financial Careers Requires Creativity

March 10, 2016
Personal Finance
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By Rita Cheng

Learn more about Rita on NerdWallet’s Ask an Advisor

Only 31% of U.S. financial advisors are women, according to the Bureau of Labor Statistics. And only 23% of certified financial planners are women, according to the CFP Board.

What’s behind this gender imbalance in professions geared toward giving people financial advice? A study conducted on behalf of the CFP Board Women’s Initiative Advisory Panel aimed to find out.

In analyzing women and financial careers, the authors of the study used the analogy of the childhood game “Chutes and Ladders.”

Women have many potential ladders to success, but there are just as many, if not more, “chutes” where they can slip back down. Potential chutes are:

  • Lack of information: Women generally don’t have adequate information about what financial planning involves or what it takes to have a successful career in the industry.
  • Business models: The way financial planning businesses are structured and the compensation methods tend to not appeal to women.
  • Gender bias and discrimination: Women are less likely to pursue financial planning as a career, believing firms are less likely to hire and support them.
  • Work-life balance: Women are less likely to consider a career in financial planning because of concerns about balancing work and family life.
  • Support systems: Women are deterred by a lack of visible role models, networks and professional development programs in financial planning.

I had the privilege of attending the 2016 Global Forum on Girls’ Education, where I learned and spoke about opportunities for young women to pursue a career in financial planning. As a certified financial planner, I recognize the important role I can play in pointing women toward this career path.

Other financial professionals, educators and parents can do the same. We must inspire creativity and reflection, and one of the best ways to do that is through activities that will help young women see the possibilities.

The CFP Board, which sets standards for the profession, has built a nationwide network of Women’s Initiative advocates who work to educate their communities about financial planning and how it can be a rewarding career for women. These CFP professionals visit schools and colleges, women’s and girls’ groups, and professional associations to share their stories and discuss opportunities in financial planning.

Here are some activities teachers and parents can share with young women and girls in the classroom or at home to put them on a path toward a career in financial planning:

Remember the past, but prepare for the future

Women’s History Month in March marks how far women have come. Decades ago it was unheard of for a woman to assume financial responsibility for her family. Women were not allowed to vote. While there have been big strides in the women’s movement, we still have a long way to go.

I ask young women interested in becoming financial advisors to pretend they can predict the future and to create a timeline of a few important future dates in women’s history. What do they want to see happen 10 or 20 years from now? What do they need to do to help realize that change?

By working backward, young women can visualize how small steps they take now can lead to bigger ones later and contribute to larger social changes.

Play ‘Did you know?’

Many young women don’t know about other women’s achievements and their impact on society. Have a group of young women research interesting facts about women and finances and share their knowledge.

For example, UN Women notes: “When more women work, economies grow. An increase in female labor force participation — or a reduction in the gap between women’s and men’s labor force participation — results in faster economic growth.”

Another way to inspire young minds is to have young women research women who have successful financial careers. Role models are important for girls’ self-esteem and confidence, and learning the inspiring stories about women who came before them can help. Young women can research national or international figures, or they can talk to people in their inner circles, such as their own mothers and teachers.

Get interactive

For hands-on learners, an interactive activity can be a fun way to learn about money. One potential exercise: Have participants pick an item they want to buy. On a sheet of paper, let them brainstorm ways they can make money to purchase the item. Encourage each young woman to solicit more ideas from the group. Some ideas may include tutoring, babysitting or selling crafts or homemade goods. At the end of the session, ask each participant how it felt to help someone with a money question.

Stress the importance of saving some of what they’ve earned and educate them on the importance of financial planning. Then, take the opportunity to tell them about financial planning as a career choice.

Young women need to believe they can do anything. Creating activities helps them realize anything is possible with support, hard work and education.

Rita Cheng is chief executive of Blue Ocean Global Wealth in Rockville, Maryland.

Image via iStock.