You May Be Better Off With a Female Financial Planner -- but Good Luck Finding Her

While evidence suggests Christina makes a better financial-planner than Christopher, you'll have a tougher time finding her.

May 4, 2014 at 12:00PM

The financial-services industry is failing you, and this time we can't blame it on exorbitant sales commissions, high-frequency trading, or the lack of a uniform fiduciary standard. It's something else entirely -- namely, the lack of female financial planners. One recent study showed that several barriers to entry are turning women away from the financial planning profession, which is a disservice to all investors.

Studies show that women are generally better investors than men -- including a famous study (link opens PDF) by a pair of University of California professors. For one, women tend to exhibit more self-control and not jump in and out of the stock market, a practice that eats away at investment returns. Further, women are generally more focused on comprehensive financial planning, rather than investment returns alone. These findings suggest that Christina makes a better financial planner than Christopher.

Good luck finding her
A female financial-planning professional may be more likely not only to provide you with stock recommendations, but also to help you decide which Social Security claiming option is best for you, how to prepare an estate plan, how to craft your long-term care strategy, and more. You'd think the financial-planning profession would be a natural magnet for women, as studies suggest that women are generally more empathetic and collaborative than men. But, sadly, that's not the case.

Few women actually participate in this industry. Although females make up 51% of the U.S. population and graduate college at a higher rate than men, women represent only 23% of all certified financial planners, or CFPs. The requirements to obtain the CFP designation include rigorous academic courses, a comprehensive board exam, at least three years of professional experience, a bachelor's degree, and high standards of ethics. 

Professional fields like law and medicine have gained more gender parity. Yet the percentage of female CFPs hasn't budged in the past decade. And it's not as if this isn't a growing field. The Bureau of Labor Statistics projects that the personal financial advising industry will grow by 27% from 2012 to 2022 -- much faster than the average for all occupations. 

Hurdles preventing women from entering the field
So why don't more women get into this line of work? That's something the Certified Financial Planner Board of Standards wants to find out. Last year, the CFP Board announced an initiative to increase the number of women entering the profession. As part of its initiative, the CFP Board formed a Women's Initiative Advisory Panel to help identify the challenges women face when entering the financial planning field and craft solutions for addressing this gender gap.

Five primary obstacles the CFP Board recently found include:

  1. Lack of understanding about what financial planning involves and what it takes to succeed.
  2. Prevalent business models and compensation methods.
  3. Gender bias and discrimination in the profession.
  4. Work-life balance concerns.
  5. Lack of visible role models, networks, and professional development programs.

Help wanted
Once considered a profession focused mostly on selling products and executing trades, the financial-services industry has become much more advice-oriented and collaborative. It seems a natural fit for women. But while you might be better off working with a woman, good luck finding her. Until the financial-planning industry does a better job of attracting and retaining more women in a welcoming and supportive manner, it's doing a grave disservice to all investors.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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