CFP Board Women s Initiative Summary of Key Research Findings. April 2014

Transcription

1 CFP Board Women s Initiative Summary of Key Research Findings April 2014

2 Objectives and Approach Objectives Study Background This project was commissioned in October 2013 by the Certified Financial Planner Board of Standards The goal of this research is to support CFP Board s WIN Initiative its effort to (1) identify the reasons for the underrepresentation of women in the financial planning profession and among CFP professionals, and (2) explore strategies to boost the number of women CFP professionals Objectives. The research covered a range of topics, including: Familiarity with the financial planning profession and CFP certification Image and perceptions of the financial planning profession Interest in pursuing CFP certification among those who don t have it Perceived strengths of men and women as financial planners Awareness of the underrepresentation of women in the field Perceived reasons for the underrepresentation of women Most strongly endorsed strategies for boosting the proportion of women financial planners 2

3 Objectives and Approach Research Method The WIN Initiative research was a multi-phased project that included four qualitative and quantitative research components 1. A roundtable, in-person discussion with executives at financial firms 2. In-depth telephone interviews (45 minutes each) with CFP Board Registered Program directors 3. Focus groups with women: CFP certificants, financial professionals without CFP certification, and students in both degree and certificate programs 4. An online survey among a variety of constituents 3

4 Objectives and Approach Research Method: Quantitative Interviews (20 minutes each) were conducted with 1,792 respondents, divided across the 6 segments in the table below Interviews were conducted from January 7 to February 26, 2014 Interviews Conducted Segment Women Men 1 Financial professionals without CFP certification Students in CFP Board registered programs 47 in degree programs 107 in certificate programs 77 in degree programs 138 in certificate programs 3 Financial professionals with CFP certification Undergraduate and graduate students with relevant majors CFP Board registered program directors 23* 6 Financial services firm officials 147 *The number of Program Directors included in this report is extremely small. Any results for this segment must be interpreted with extreme caution and considered directional only 4

5 Key Findings 5

6 Alternate Universes Alternate Universes One of the more striking findings from the qualitative phase of research was a dramatic difference between female CFP certificants/cfp Board registered program students and other female financial professionals When it comes to attitudes about and satisfaction with their careers With female CFP certificants and students highly satisfied, enthusiastic, and passionate during the group discussions And other female financial professionals expressing lower levels of satisfaction and not much passion Key findings from an image-association exercise demonstrating that difference are included in the following charts 6

7 Alternate Universes Female participants without CFP certification expressed mixed job satisfaction, with little passion for their work He s tipping over one side and he s not really balancing. I can be late because I m not balancing my work load and my life. No CFP, NY (Controller) I ve worked in other fields where it is grueling. I don t have that feeling. I don t dread it. When I bite into this peach, I know the outcome. No CFP, NY (accountant for Broadway shows) I feel like this is my clientele. Everybody is unique. Everyone has their own vision or color as to where they want to go, and I get to help each one of them direct their path. No CFP, VA (MetLife, CHFC, CLU)

8 Alternate Universes On the other hand, women CFP professionals expressed a sense of ownership over their careers and greater passion We nurture relationships and help clients prosper. Our clients are always growing. We re growing professionally and getting better and better and wiser. CFP professional, VA (security advisor) I ve always loved to study, and that s part of our career. I just had a test, and I am very detail-oriented. CFP professional, VA (CPA, taxes and estate work) I am planting my seeds and growing my business and hoping my crops will grow. CFP professional, NY (FA with an independent firm)

9 Alternate Universes Every picture tells a story but not the same story It s like work in that it s a dead end...you feel you have so much potential but you can t use it anywhere. No CFP, NY (wealth management product specialist) Currently my job is full of stress and I am overloaded. I need to make a change. I have way too much. No CFP, VA (small-business accountant) These are the car wrecks that my clients seem to be. I was resentful at first: don t bring me your shoeboxes! But the feeling that you get when you get everyone satisfied that brings you a payoff. CFP professional, NY (independent) There is a lot going on in different directions, but it seems like fun. That s what it is for me. It s always fun to work for clients. CFP professional, VA (independent)

10 Alternate Universes Even if CFP certificants had stumbled into financial planning, their ultimate connection with the field is deep They feel at home with the work, energized by it, and passionate about it They like the intellectual challenge of solving puzzles and the emotional payoff of helping people Some come from homes with naturally strong financial planning and some from homes with no financial skills at all They believe strongly in the importance of effective money management I am a natural planner I had no idea what this profession was about, so I started studying and immediately felt well suited to this career. It s flexible from a mental perspective and challenging in such a great way. CFP professional, VA I went to business school and got my accounting degree and got my CPA. It is more of a compliance responsibility and your clients don t really talk to you. I like that as a CFP, your clients want to talk to you and see you as a resource. CFP professional, VA I wanted to do something that was more entrepreneurial. CFP professional, NY

11 Alternate Universes Students in CFP certification education programs expressed excitement about a career in financial planning and their future success This pot represents the roots the foundation that I am getting now, but I hope to thrive beyond that in my career. Degree program student, VTech This represents the wealth of knowledge and experiences that I hope to gain throughout my career. Certificate Program Student, BU This represents progress, making a mark for others to see, proof of my work. Certificate Program Student, BU

12 Alternate Universes The quantitative results strongly support the focus group findings on job satisfaction Women CFP professionals in the online survey are much more likely than women without the designation to be very satisfied with their current position Satisfaction with Current Job Base: CFP Professionals, Professionals Without CFP, and Students Who Are Employed CFP certificants 72% 22% Among Women Only Financial professionals without CFP mark, consider self financial planner Financial professionals without CFP mark, not financial planner 43% 53% 47% 36% Q6A: All in all, how satisfied are you currently with your job as a [insert job]? Very satisfied Somewhat satisfied Neutral

13 Alternate Universes What s more, women CFP professionals are more likely to associate nearly every positive description tested with their jobs Terms to Describe Current Job Base: CFP Professionals, Professionals Without CFP mark, and Students Who Are Employed % Rating Each 9 or 10 CFP Certificants Professionals without CFP mark, Consider Self Financial Planner Professionals without CFP mark, Not a Financial Planner Women Women Women Highly ethical 84% 44% 47% People-focused 78% 56% 48% Rewarding 60% 32% 28% Flexible working arrangements 57% 36% 32% Challenging 50% 28% 30% Numbers-focused 34% 40% 36% Strong job security 38% 26% 28% Stable 28% 35% 26% Fairly compensated 37% 28% 21% Stressful 26% 19% 30% Technical 29% 25% 20% Exciting 25% 26% 14% Fun 26% 26% 14% Difficult 19% 7% 9% Predictable 6% 14% 14% Boring 1% 6% 4% 13

14 The Profession: Not on the Radar Interest in becoming a financial planner is relatively low among those who are not CFP professionals Suggesting the profession is not top-of-mind among those in the Financial Professional community Interest in Becoming Financial Planner Base: Financial Professional Community, Do Not Consider Self Financial Planner Total Financial professional men without CFP mark Financial professional women without CFP mark Students, not in CFP Board Registered program Q7D: How interested would you be in becoming a financial planner at some point over the next few years? 2% 3% 2% 2% 8% 10% 8% 11% 23% 27% 28% 38% 22% 26% 25% 23% 33% 19% 20% Extremely interested Very interested Somewhat interested 22% 13% 19% 11% 6% 14

15 The Profession: Not on the Radar One apparent reason for lower interest among women: they re less likely to feel familiar with financial planning In fact, women who don t consider themselves financial planners are less than half as likely as their male counterparts to say they re very familiar with the profession Familiarity with What Financial Planner Does Base: Do Not Consider Self Financial Planner Male: Summary 89% Very/somewhat familiar Not very familiar 10% Somewhat familiar 36% Not familiar at all 1% Very familiar 53% Not familiar at all 7% Not very familiar 18% Female: Summary 76% Very/somewhat familiar Somewhat familiar, 54% Very familiar, 22% Q7A: How familiar would you say you are with what a financial planner does? 15

16 The Profession: Not on the Radar In addition to financial planning generally, women are also much less likely than men to say they ll pursue CFP certification % Definitely or Probably Likely to Pursue CFP Certification in the Coming Years Base: Financial Professional Community Total 39% Professionals Without CFP Certification Men Women 39% 23% Students in Programs other than CFP Board Registered Program Men Women 25% 60% Q10A: If you had to say, how likely is it that you will begin pursuing CFP certification in the next several years? 16

17 The Profession: Not on the Radar For those not interested in pursuing CFP certification, women and men offer similar reasons However, women are a bit more likely to cite expensive coursework, while men are more likely to say certification would take too long to complete and take away from building their career Major Reasons for Not Wanting to Pursue CFP Certification Base: Financial Professional Community, Will Probably Not or Definitely Pursue CFP certification Too hard to find time for coursework Would take time away from building career The coursework is too expensive Would take too long to complete The exam is difficult Work experience requirements are too Ethical requirements are too stringent Other reason 6% 4% 29% 30% Q10E: Tell us if each of the following is a major reason why you don t plan to pursue the CFP certification, a minor reason, or not a reason? 9% 10% 10% 13% 19% 19% 23% 23% 22% 19% 24% Men 30% Women 17

18 The Profession: Not on the Radar As with financial planning generally, the gap between men and women is large when it comes to familiarity with CFP certification Familiarity with CFP Certification Base: Do Not Have CFP mark Have only heard the name 9% Men: Summary 87% Know a lot/little Know a little about it 23% Have never heard the name Know a lot about it 48% Q9B: How familiar are you with the following certifications, licenses, or degrees? Have never heard the 3% name Know a lot 11% about it, 25% Have only heard the name 16% Women: Summary 73% Know a lot/little Know a little about it 21% 18

19 The Profession: Not on the Radar And among those without a CFP mark, men are twice as likely as women to be familiar with each component of the CFP certification process Knowledge of Specific Aspects of CFP Certification Process Base: Financial Planner Community, Knows at Least a Little About General Steps Toward CFP Certification % Saying Know at Least a Little about Professionals without CFP Certification Students in Programs Other than CFP Board Registered Program Men Women Men Women Ethical standards requirements 59% 29% 56% 23% Continuing education requirements necessary to keep a CFP 58% 27% 60% 22% The educational requirements 54% 25% 57% 23% The exam requirement 58% 24% 55% 19% Work experience requirements 53% 24% 58% 17% The typical cost involved for classes and other fees 49% 24% 50% 18% Q10D: How familiar are you with each of the following steps in pursuing CFP certification? 19

20 The Profession: Not on the Radar Among women in particular, the more you know about the profession, the more interested you are Which only serves to underscore the importance of building awareness among women Interest in Financial Planning Profession, by Familiarity with Financial Planning Base: Financial Planner Community Extremely, Very, or Somewhat Interested, Among Men Extremely, Very, or Somewhat Interested, Among Women 44% 49% 58% 40% 15% 22% Very familiar with Financial Planning Somewhat familiar Not very/not at all familiar Very familiar with Financial Planning Somewhat familiar Not very/not at all familiar Q7D: How interested would you be in becoming a financial planner at some point over the next few years? 20

21 The Profession: Misperceptions The survey also uncovered dramatic misperceptions about the profession among women in the Financial Professional Community Women in the CFP professional community are much more likely than those outside to associate financial planning with communication skills, holistic evaluation, skills one can use oneself, and building relationships On the other hand, those outside the community are much more likely to think financial planning requires expertise in financial markets Perceptions of Financial Planning Profession Base: All Survey Segments % Strongly Agree CFP Professional Community Financial Professional Community Women Requires strong communications skills 93% 61% Requires strong listening skills 94% 58% Requires one to look at a client s situation holistically 91% 51% Requires skills that financial planners can use themselves in their own lives 85% 50% Is primarily about building long-term relationships with clients 80% 49% Requires a strong understanding of financial markets 40% 62% Is a highly ethical profession 56% 35% Offers strong potential for long-term income 42% 28% Q8A: Please tell us how you would react to each of the following statements about the financial planning profession. Women 21

22 The Profession: Misperceptions In addition, women outside the CFP professional community are more likely to believe financial planning requires strong sales skills Perceptions of Financial Planning Profession (Continued) Base: All Survey Segments % Strongly Agree CFP Professional Community Women Financial Professional Community Offers a strong degree of job satisfaction 54% 19% Requires strong sales skills 20% 38% Requires a strong understanding of math 27% 35% Offers career stability 28% 16% Offers a lot of job flexibility 27% 16% Offers good work/life balance 27% 14% Is a profession that s in high demand 23% 13% Focuses mostly on high-net-worth clients 12% 15% Is primarily about finding the right stock and bond investments 2% 18% Is a career that doesn t require a lot of training just good common sense 1% 7% Women Q8A: Please tell us how [you would/your students would/your recruits would] react to each of the following statements about the financial planning profession. 22

23 The Profession: Misperceptions Two examples of the impact of misperceptions about the profession are instructive Interest in becoming a financial planner is lower among women who strongly believe the profession requires strong sales skills vs. among those who don t have that feeling On the flip side, interest is significantly stronger among women who strongly believe that the profession is about building relationships Both of which lead: Addressing these misperceptions is key to attracting more women to the profession 33% Interest in Financial Planning Profession, by Perceptions of Requirements Base: Financial Professional Community 40% % Extremely, Very, or Somewhat Interested, Among Women 45% 45% 29% 31% Strongly Agree Requires Strong Sales Somewhat Agree Neutral Strongly Agree Is About Long-Term Relationships Q7D: How interested would you be in becoming a financial planner at some point over the next few years? Somewhat Agree Neutral 23

24 The Profession: Misperceptions Indeed, CFP professional community women themselves focus on stronger positioning of the profession when suggesting solutions When asked to choose possible strategies for increasing the number of women in financial planning, the number one choice among CFP professional community women is positioning the profession as more about planning and relationship building, and less about financial products And they re MUCH more likely to choose this solution than other groups Strategies to Increase Number of Women Financial Planners Base: All Survey Segments CFP Professional Community Financial Professional Community Men Women Men Women 25% 30% 48% 72% % Choosing: If financial planning profession were seen as more about planning and relationship building and less about financial products Q11I: Here are some factors that could potentially help increase the number of women in the financial planning field. Tell us which you think would be the most likely to increase the number of women in the field. 24

25 Gender Bias When it comes to perceptions of who is more qualified to be a financial planner, we see differences by CFP mark affiliation and gender CFP professional community women are much more likely than any other group to believe that women are more likely than men to have the right characteristics Which Gender Is More Likely to Have the Skills/Characteristics of a Successful Financial Planner? Base: All Survey Segments CFP Professional Community Among Men Among Women 10% 4% 50% 76% 46% 14% Financial Professional Community Among Men Among Women 11% 23% 80% 67% 10% 9% Men more likely No difference/not sure Women more likely Q11A: First, when you think of the characteristics and skills needed to be a successful financial planner, would you say that 25

26 Gender Bias However, women s qualifications aside, almost no one believes that women are more likely than men to be hired as financial planners Which Gender Is More Likely to Be Hired as a Financial Planner? Base: All Survey Segments CFP Professional Community Among men Among women 30% 49% 63% 42% 8% 9% Financial Professional Community Among men Among women 34% 49% 58% 47% 8% 4% Men more likely No difference/not sure Women more likely Q11C: Next, would you say that in general women or men are more likely to be hired by companies as a financial planner? 26

27 Gender Bias A striking contradiction that underscores the issue of potential bias has to do with financial services firms executives Very few of these executives believe, in a head-to-head comparison, that women are more likely to have the characteristics to be a successful financial planner But when they re asked about each gender separately, they re actually more likely to ascribe important characteristics to women than to men Who s More Likely to Have Characteristics to Be a Successful FP? Perceptions Among Financial Services Firm Executives Base: Financial Firm Executives Agree with Each Statement About Men or Women 41% 51% 73% 89% 82% 61% 94% 88% 73% 67% 7% Men are more likely Equal Women are more likely Have characteristics for a successful financial planner Have an advantage in attracting women clients Receive adequate training from educational programs Are strongly ethical Men Women 27

28 Gender Bias We tested a number of perceived characteristics of financial services firms to see if double standards are seen to exist And among respondents in general, a number of double standards rise to the top % Who Agree with Each Statement Largest Gaps Between Firms Attitudes Toward Men vs. Attitudes Toward Women Base: All Survey Segments Agree Regarding Women Agree Regarding Men Firms are reluctant to hire (men/women) because concerned they ll start a family 37% 16% 22 There are many strong role models for (men/women) in the financial planning field 46% 66% 20 The office culture in firms makes (men/women) feel welcome and respected 37% 58% 20 (Men/women) receive strong support from their colleagues in a firm 39% 53% 14 (Men/women) are reluctant to pursue career because they ll start a family 27% 16% 11 Firms offer (men/women) strong opportunities to succeed 46% 56% 10 The path for (men/women) to advance in a financial planning career is clear 39% 49% 9 Firms are open to offering (men/women) flexible arrangements for families 37% 31% 7 Firms are committed at highest levels to attract and support strong (men/women) 41% 46% 6 (Men/women) receive adequate training from companies 52% 48% 5 Q11d: Please tell us if you agree or disagree with each of the following statements. Gap

29 Gender Bias In general, women in the CFP professional community see even larger imbalances than respondents overall Largest Gaps Between Firms Attitudes Toward Men vs. Attitudes Toward Women Base: Women In CFP Professional Community % of Who Agree with Each Statement, Among Women In CFP Professional Community Agree Regarding Women Agree Regarding Men Gap There are many strong role models for (men/women) in the financial planning field 32% 81% 49 The office culture in firms makes (men/women) feel welcome and respected 22% 68% 46 (Men/women) receive strong support from their colleagues in a firm 25% 65% 40 Firms offer (men/women) strong opportunities to succeed 31% 64% 33 Firms are reluctant to hire (men/women) because concerned they ll start a family 35% 2% 33 The path for (men/women) to advance in a financial planning career is clear 27% 55% 28 Firms are committed at highest levels to attract and support strong (men/women) 27% 47% 20 (Men/women) are reluctant to pursue career because they ll start a family 20% 2% 18 (Men/women) receive adequate training from companies 35% 45% 10 Firms are open to offering (men/women) flexible arrangements for families 19% 18% 1 Q11d: Please tell us if you agree or disagree with each of the following statements.

30 Root Causes About half of respondents are aware that women are underrepresented in financial planning Awareness of Underrepresentation of Women in Financial Planning Base: All Survey Segments Total 51% 31% 18% CFP Professionals CFP Board RP Students Registered Program Directors 53% 78% 91% 30% 16% 6% 17% 9% Non CFP Professionals Non CFP Board RP Students 37% 31% 39% 44% 24% 25% Financial Services Executives 61% 26% Yes, aware Assumed but didn't know for certain Didn't know Q11E: Currently, women are underrepresented in the financial planning profession. That is, compared to their percentage in the population, there s a significantly lower percentage of women financial planners. Before this interview, were you aware of that? 13% 30

31 Root Causes Participants were most likely to point to firms themselves as major reasons for the underrepresentation of women Top Reasons for Underrepresentation: Trade-Off Exercise Results Base: All Survey Segments Financial firms aren t committed at highest levels to attract and support women financial planners 8.5 There aren t enough strong role models for women in the financial planning field 8.2 Financial firms aren t open to offering women flexible arrangements to accommodate family commitments 7.6 The office culture in financial firms doesn t make women financial planners feel welcome 7.5 Women are less likely to advocate for themselves in pursing career advancement 7.5 Women are less willing than men to take risks in advancing their careers 7.3 The path for women to advance in financial planning isn t sufficiently clear NOTE: The ratings above were derived from a trade-off exercise in which 18 possible reasons were presented to respondents. The scores represent the relative importance of each reason, with 100 being the total of all reasons. Total

32 32 Root Causes Women in the CFP professional community are more likely than others to blame women less likely to advocate for themselves Top Reasons According to Women in the CFP Professional Community Women are less likely to advocate for themselves in pursuing career advancement 9.6 There aren t enough strong role models for women in the financial planning field 9.3 Financial firms aren t committed at the highest levels to help attract and support women financial planners 9.2 The path for women to advance in financial planning isn t sufficiently clear 8.2 Financial firms aren t open to offering women flexible arrangements to accommodate family commitments 7.6 NOTE: The ratings above were derived from a trade-off exercise in which 18 possible reasons were presented to respondents. The scores represent the relative importance of each reason, with 100 being the total of all reasons.

33 Root Causes On the flip side, executives responsible for recruiting and hiring offer strong mea culpas Their top reasons all focus on omission, or commission, among financial services firms themselves Top Reasons According to Financial Firm Execs Financial firms aren t committed at the highest levels to attract and support women financial planners 8.3 Financial firms aren t open to offering women flexible arrangements to accommodate family commitments 7.4 Financial firms don t offer women financial planners strong opportunities to succeed and advance 7.3 Financial firms are reluctant to hire women because they re concerned they ll leave to start a family 6.6 Women financial planners do not receive strong support from their colleagues in a firm 6.5 The office culture in financial firms doesn t make women financial planners feel welcome and respected 6.5 NOTE: The ratings above were derived from a trade-off exercise in which 18 possible reasons were presented to respondents. The scores represent the relative importance of each reason, with 100 being the total of all reasons. 33

34 Proposed Solutions When asked to react to possible strategies for boosting the number of women in financial planning Participants tap into what they earlier saw as the primary root causes of the underrepresentation of women awareness, positioning, and creating a more welcoming environment Most Popular Strategies to Increase Number of Women Financial Planners Base: All Survey Segments 48% 47% 43% 42% 38% 34% 34% 31% Market FP as a career well-suited for women Develop mentoring programs Introduce FP earlier in education Present FP as about planning and relationships Provide more flexible work arrangements and family leave Provide more networking groups for women Encourage business leaders to be more vocal about support for women Q11I: Here are some factors that could potentially help increase the number of women in the financial planning field. Tell us which you think would be the most likely to increase the number of women in the field. Switch to more salary-based pay model 34

35 Proposed Solutions As we saw earlier, women in the CFP professional community are especially focused on marketing and positioning While another important constituent group women without CFP certification leans toward marketing, mentorship, and early education % Choosing Each Strategy Most Popular Strategies to Increase Number of Women Financial Planners Base: All Survey Segments If financial planning were strongly marketed as a career well suited for women CFP Professional Community Financial Professional Community Financial Services Executives Men Women Men Women Total 53% 64% 36% 42% 36% If mentoring programs were developed 49% 71% 31% 42% 34% If people were introduced to financial planning as a career earlier in the educational/career-search process If financial planning profession were seen as more about planning and relationship building and less about financial products If financial firms offered more flexible work arrangements and more accommodating family leave 47% 65% 27% 38% 32% 48% 72% 25% 30% 26% 33% 49% 35% 39% 27% 35

36 Key Takeaways 36

37 Key Takeaways Summary of Main Findings Alternate Universes Missed Opportunities and Root Causes The Profession: Not on the Radar; Misperceptions Certification: Benefits and Barriers The survey evidence suggests that financial planning is a strong career for any financial professional, including women In spite of the attractiveness of the profession, women are less likely to be financial planners because of (1) lack of knowledge: unfamiliarity or misperceptions, and (2) firms that are at least perceived to be unwelcoming to women The enthusiasm we heard from CFP professionals in the focus groups, including among students, stemmed in large part on the profession s focus on helping clients. That view of the profession is notably absent among women without the certification The evidence suggests that those without the CFP mark see certification as a necessary evil to get ahead, rather than a valuable asset in its own right. Add the fact that the process is a relative mystery to women, and is considered expensive both of which pose yet another barrier to women pursuing financial planning 37

38 Key Takeaways Summary of Main Findings The Role Played by Firms: Recognizing Strengths The Role Played by Firms: Offering a Supportive Environment The fact that men are perceived to be much more likely to be hired than women in spite of the acknowledged strengths of women in the field suggest that longstanding gender biases still exist These less than welcoming characteristics whether real or perceived presumably have an impact on how willing and enthusiastic women are to join firms that they believe will be more supportive of men than women Solutions Naturally, initiatives taken on behalf of women financial planners will be developed based on a range of factors. But the entirety of the survey evidence strongly suggests that these three prongs awareness, positioning, and welcoming can form a strong foundation for the WIN initiative moving forward 38