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A version of this article first appeared in CNBC’s Inside Wealth newsletter by Robert Frank, a weekly guide for high-net-worth investors and consumers. Sign up to receive future editions directly to your inbox.
More women are entering the wealth management industry, but they are yet to penetrate client-facing advisory roles, according to a recent study by private wealth intelligence platform Fintrx.
While the data shows an improvement in the gender gap in the industry, the nuances remain noteworthy. According to Emily Goldman, vice president of data and research at Fintrx, revenue-generating roles typically pay well and are a good fit for leadership roles.
“Underrepresentation here has a direct impact on the earnings of female employees,” Goldman said. “And the lack of leadership and ownership opportunities will also impact their long-term income.”
According to Fintrx, younger women are moving into wealth management in general, with women making up 37.6% of registered professionals aged 20-30. In the 30-40 and 40-50 age groups, women account for less than 27%.
The change comes as women’s wealth is expected to grow rapidly in the coming years. Cerulli Associates estimates that by 2048, $105 trillion in wealth will be passed on to heirs, of which $54 trillion will go to spouses. Since women tend to live longer than men, they will probably receive the lion’s share.
But while more young women are entering the industry, Goldman says the increase is concentrated in management and operational roles.
Women account for only 20.2% of advisors between the ages of 20 and 30, and the proportion of advisors between the ages of 30 and 40 and those between 40 and 50 is almost the same. This percentage is only slightly higher than for advisors aged 50-60 (18%) and advisors aged 60 and older (17.1%).
According to Fintrx, this gender gap is also reflected in the C-suite. Women hold 21.5% of C-suite positions at wealth management firms, and are more likely to hold COO or CFO roles than CEO or investment roles, the firm’s research found.
“This shows that companies need to build better pathways to these revenue-generating roles and leadership,” Goldman said. “Because when you go into operations, compliance and legal, you don’t easily follow these bookholder roles and then long-term strategic leadership roles.”
She noted that more women advisors are starting their own companies. In 2025, there will be 39 new registered investment advisory firms founded by women, up from 30 in 2021.
“I think we’ll see more and more women striking out on their own, even if they can’t get promoted as quickly in news agencies or large corporations,” she says.
