• Hannah Boundy

Having a Woman in the Room

A couple of months ago I sat for my second CFA exam in a crowded conference center surrounded by hundreds of other candidates. The CFA is a prestigious designation that requires passing three incredibly rigorous exams in addition to obtaining several years of experience in a finance-related position. The day I sat for the exam I couldn’t help but notice that I was in the minority. This isn’t new for me. For starters, I am only 5 feet tall. But what really struck me that day were how few women I saw present. It seemed to me that for every female I saw in that crowded hall there were at least five men. Being curious, I looked it up. It turns out that in the U.S. of the roughly 51 thousand active CFA members, only 16.4% are women. I then broadened my search to include the financial planning field. According to the Bureau of Labor Statistics, in 2013 only 26% of financial advisors were women. While finance may be a male-dominated industry, I believe women have a great deal to offer the financial planning world.

In 2007, Knowledge@Wharton, a research division of the University of Pennsylvania’s business school partnered with State Street Global Advisors to study trust in the Financial Advisor-Client relationship. Not surprisingly, they found that trust is a key deciding factor when it comes to how individuals choose their advisor. More interestingly, however, is how the researchers categorized types of trust. The first category they discussed was trust in technical competence and know-how – basically, do you trust that your advisor knows what he or she is doing. The second category was trust in ethical conduct and character – meaning, do you trust that your advisor is honest. The final category was trust in empathetic skills and maturity. As Dr. James Grubman, a psychologist who specializes in training financial professionals, puts it: “This level of trust, which we might call relationship competence, may be the most critical because without it, the relationship is extremely fragile. Essentially, this trust is built on the client’s premise that “if I tell you personal things about myself or my family, I need to trust that you, the advisor, will handle that well.” The more I have met with clients and potential clients, the more I believe this to be true. Talking about your finances is often a very intimate and personal experience and how advisors respond to that information dictates how well a client can trust them. It’s been my personal experience that this type of trust is particularly important for women. Studies have shown that women are often more attuned to empathy than men, making this category of trust that much more important for our female clients, for whom a relationship with a female advisor may be more comfortable.

Regardless of your demographic and advisor preferences, it is my personal opinion that you should feel comfortable with your advisor in all categories of trust. Male, female, young, or old, one of the easiest ways to further financial peace is for you to be confident that your advisor is constantly seeking to do right by you and your financial situation. Here at Cedarstone, we take our clients' trust very seriously. That’s why we are constantly seeking to educate our clients, through our online articles and in-house literature, because we want them to understand and always feel comfortable asking us questions. If you are in a need of an advisor you can trust or simply want to speak to someone about any questions you may have regarding your finances, please feel free to give us a call today. If you’re specifically interested in speaking with a female advisor, make sure to mention it in your message. I’d be happy to speak with you.

"Women in Financial Services." Catalyst. September 29, 2014. http://www.catalyst.org/knowledge/women-financial-services.

"Fewest Female CFA Society Members: Countries." Bloomberg.com. August 28, 2013. http://www.bloomberg.com/visual-data/best-and-worst//fewest-female-cfa-society-members-countries.

"Bridging the Trust Divide: The Financial Advisor-Client Relationship." Wharton University of Pennsylvania. http://d1c25a6gwz7q5e.cloudfront.net/papers/download/ssga_advisor_trust_Report.pdf.

Simon-Thomas, Emiliana R. "Are women more empathetic than men?" Greater Good University of Berkeley California. June 1, 2007. http://greatergood.berkeley.edu/article/item/women_more_empathic_than_men.

#CFA #femaleadvisor

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