Despite the increasing financial influence of women and their growing share of wealth in Canada, the full-service brokerage (FSB) channel continues to struggle with female representation, according to a report by ISS Market Intelligence (ISS MI).
As of 2023, women were found to comprise just 18% of Canadian advisors, indicating an increase of only three percentage points since 2015.
The ISS MI report attributed this disparity to several factors, including maternity leave policies and the perception of the industry as male-dominated, which deter many women from pursuing careers in brokerage.
The commission-based compensation model favoured by the industry can also be discouraging, the report stated, with some women expressing a preference for fixed salary positions, particularly in the early years of their careers.
Additionally, the report said negative stereotypes and limited awareness of opportunities further impede the recruitment of women in the field.
Amid these challenges, ISS MI stressed the importance of increasing female representation in the brokerage sector as women’s share of wealth is projected to grow significantly, with an estimated $4 trillion in assets to be female-owned by 2028.
Female advisors are well-positioned to understand the unique needs of female clients, including longevity risk and income gaps, and can offer valuable relationship-building and empathy skills, according to the report.
To overcome these hurdles, ISS MI said firms are intensifying their recruitment efforts and focusing on team building, in addition to establishing succession plans that facilitate the transfer of books of business to younger female advisors.
Some firms have also introduced financing programs to address the issue of paying for a book of business, particularly while on maternity leave, according to ISS MI.
One area where progress has been noticeable is the percentage of female branch managers in brokerage networks.
The Big Six bank-owned firms have reportedly seen a sharp increase in the share of female branch managers, rising from 11% in 2015 to 31% in 2022. Similarly, non-big bank-owned brokerages have seen female branch managers rise to 32% from 20% seven years ago.
Despite these strides, the industry still has a long way to go in achieving significant change. Targets for increasing the number of female advisors vary among firms, with long-term goals typically ranging from 20-30% representation of women advisors on teams.
However, considering many women’s preference for non-commission roles, firms may need to reimagine the grid pay structure and adjust their goals accordingly, according to ISS MI.
“The industry recognizes the need for better female representation in the brokerage industry but may need to redefine what success looks like and how quickly it can be achieved,” said ISS MI associated director Vince Linsley.
“Reimagining the compensation structure, improving support systems, and addressing the challenges of recruitment and succession planning are crucial. Firms must attract and retain more women in brokerage to effectively serve the growing wealth and preferences of female clients.”
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