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The Profession Where Women Make 61% Of What Men Make

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Women have made great strides over the last several decades, and although we are still not experiencing pay parity with our male cohorts, we’re getting closer. Although a commonly quoted statistic places the average full-time female wage at about 77 cents of the average male’s, accounting for factors such as education, experience and career choice narrows the gap to just 5 cents.

However, women in certain professions aren’t seeing those numbers, according to a recent article from 247wallst.com, which crunched the data from the Current Population Survey of the Bureau of Labor Statistics to compile a list of occupations where women’s median weekly full-time earnings didn’t measure up to men’s.

At the top of the list? Personal financial advisors—an occupation in which women earn a paltry 61.3% of what men make in a week. That’s not to say that they’re not making money—financial advisors overall made median weekly earnings of $1,337 in 2014—but women earned $1,004 per week, compared to men’s $1,637.

Why might that be? When I canvassed a few of the female financial advisors that I know, I heard a variety of theories.

In some occupations, flexibility may come at a price. (Photo credit: chrisada)

Women don’t ask for what they’re worth.

“In the interest of being kind and compassionate and getting along, women ask for less,” says Carolyn McClanahan, M.D., a financial planner with Life Planning Partners in Jacksonville, FL. “And men think they’re worth a heck of a lot more than they are.”

Research shows that women generally don't ask for raises or negotiate for salaries as aggressively as men do. In one experiment, women who negotiated a starting salary asked for an average of $7,000 less than the men did. And it’s no wonder: Neither men nor women want to work with or hire a woman who negotiates her salary, according to one Harvard study.

“And because we’re often the caretakers at home, we have been—rightly or wrongly—pigeonholed as having made a lifestyle choice, which somehow is intimated to mean we don’t deserve to earn as much as men,” says Lynn Ballou, a managing partner at Ballou Plum Wealth Advisors in Lafayette, CA. “As women, we need to stand up and say we deserve the same compensation opportunities for the work we do.”

Financial planning is still a male-oriented career.

Only a quarter of personal financial advisors are women, according to the Bureau of Labor Statistics. “In my six plus years of financial planning, I was often the only woman in the room,” says Pamela Capalad, a financial planner who recently started her own unique planning business in Brooklyn, NY.

She left her most recent job at a wealth management firm, in fact, because she didn’t feel that she could advance the same way her male colleagues could. “We like to think negotiations happen in the office, but really that’s just a formality,” Capalad says. “Promotions really happen at happy hours, in locker rooms and on the golf course. No matter how exceptional I was at my job or how much clients liked me, it was hard for me to be part of that world as a woman.”

Constance Stone, a recently retired planner in Chagrin Falls, OH, agrees. “The financial industry has always been heavily dominated and controlled by men,” she says. “I recall occasions when assisting me was put on the back burner in favor of projects for men, when staff was specifically instructed to prioritize mine equally. This enables men to succeed with less effort than women in the same positions.”

Stone wasn't surprised at all by the 61.3% statistic. “The only time in my nearly 30-year financial planning career that I was paid on par with my male counterparts was in my own practice,” she says.

Women might steer more toward hourly planning than high-pressure sales jobs.

Although there are a variety of ways to pay for financial planning, most advisors fall under one of two models: They either charge set fees for planning services, or they earn a commission if you purchase specific products from them. Some female planners suspect that women choose the fee-only model more often or aren’t selling as much as male planners.

“I’m not selling high-commission products where there might be a greater opportunity for me personally to maximize profits,” says Catherine Hawley, a financial planner with her own practice in Monterey, CA. “That’s a different avenue that I haven’t chosen to take, that I’m very comfortable with. I doubt that statistic would apply to me personally if you compared me to men who are hourly planners.”

And if women do choose the sales model, Hilary Hendershott, a financial planner in San Jose, CA, wonders if they might not be as good at it, on average. “Men are typically more confident, or over-confident, so it makes sense that they sell more. Maybe the men need to make more to provide for families where women are happy with lower incomes and flexibility to raise families.”

Women choose financial planning for flexibility, and flexibility comes at a cost.

“I went into this business because I knew it could provide me with flexibility once I started my family,” says Karen Lee, a financial planner in Atlanta. “I had my first kid at 30 and basically went part time. I think many women who get into the business are pulled between shooting for higher production versus family.”

Interestingly, flexibility only means lower pay for the same work in some occupations, according to research from Claudia Goldin, an economist and Henry Lee Professor of Economics at Harvard University. In her paper, Goldin writes that “certain occupations impose heavy penalties on employees who want fewer hours and more flexible employment.”

In those occupations, wages are non-linear. If you work 30 hours, you don’t make half of what someone working 60 hours makes. “The non-linearity comes in when you have rich clients, Fortune 500 firms that say, ‘I want what I want when I want it,’” Goldin says. In other words, the planners willing to put in the hours for big clients and to be available to them at all times are often paid handsomely for the effort, and disproportionately more compared to a planner keeping less crazy hours.

However, in some occupations flexibility is easy and workers aren’t penalized for it. Women in science and technology jobs, for instance, can set more elastic schedules or work remotely without the accompanying earnings dent.

That won’t happen for advisors, Goldin says, until there’s a technological shift or change in industry structure, such as the one that’s occurred for pharmacists—where part-time work is an acceptable norm and employees are paid by the hour in a linear way.

It also won’t change until financial planners—all of them—value flexibility and predictability on the job. But there are still plenty of people in this occupation who don’t mind working long hours for demanding clients. “There’s this large group out there, half the labor force generally, who say, ‘I don’t really care,’” Goldin says. “‘Lean in’ for women is a very good idea. It was a wonderful book, a wonderful movement. However, what we need is ‘Lean out’ for men.”

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