YOUR PRACTICE: Women, young advisers gain ground in wealth management

By Jennifer Hoyt Cummings

Oct 4 (Reuters) - Older men may be the stereotypical U.S. wealth managers, but they are getting a run for the money from their younger and female counterparts, according to a survey released on Thursday by Fidelity Investments.

On average, advisers under age 48 manage 16 percent more in client assets than those who are older, and women manage 5 percent more than male advisers, according to the survey, which was conducted in March.

To be sure, Fidelity surveyed just 1,200 advisers and brokers at broker-dealers, banks, wirehouses, insurers and registered investment advisors - a small fraction of a group that research firm Cerulli Associates estimates at more than 300,000.

But with third-party research firms verifying that this was a representative sample, the results could be a nascent sign of change in the wealth management industry, said Fidelity, which has done this survey six times since 2005.

"This is the first year that the face of the new adviser really popped out," said Alexandra Taussig, a senior vice president of Fidelity clearing division National Financial.

Despite managing more money on average, these groups are taking home less of it than older, male advisers. Taussig said this could mean that younger advisers and women need to get better at negotiating their fees and pay structures.


For years, conventional wisdom has said that the adviser force is aging and is not getting replenished because new recruits have trouble building a book of business and decide to leave the industry.

But in its latest survey, Fidelity found that the majority of advisers were Generation X/Y, which are defined as between the ages of 21 and 47. Advisers in this younger group are managing $59 million in client assets on average, versus $51 million for their older counterparts.

Matt Reiner, the 26-year-old chief investment officer at Atlanta-based Capital Investment Advisors, said younger advisers could be succeeding because of their ability to relate to clients still shaken by the financial crisis of 2008.

Because Gen X and Gen Y advisers have spent the bulk of their careers in tumultous times, Reiner believes they are more strategic and conservative than older advisers, who tend to have a longer and more optimistic outlook.

Younger advisers are also comfortable with technology, making them more efficient, Reiner said. If not for him and his younger coworkers, he said, the 15-person firm, which manages $1 billion in client assets, would still be analyzing investments with pen and paper.

Reiner's 59-year-old boss and father, Michael Reiner says there was a time when clients picked an adviser by "counting the gray hairs," but more people have grown to appreciate younger advisers, who are often more focused on research and willing to adjust their strategies with the markets.

However, Reiner, who founded Capital Investment in 1996, is not writing himself off, saying clients still like seeing a firm headed by someone with a long tenure.


Merrill Lynch Wealth Management's Cynthia Hewitt, who has been on the Barron's list of Top 100 Women Advisors for seven years, says she is not surprised to hear that women have more client assets than men on average.

Generally speaking, women tend to be more approachable and more vigilant about servicing, said Hewitt, a founder of the Hart Group, a Wilmington, Delaware-based Merrill team that manages $1 billion in client assets.

Fidelity found that women, who on average managed $58 million in client assets versus $55 million for men, are also more likely to discuss financial issues outside of traditional investments - like budgeting, charitable giving, healthcare and estate planning.

Still, women earn 5 percent less than men, and make up just 13 percent of the overall financial adviser population, Fidelity's survey said. And the annual Barron's Top 100 Advisor rankings, a closely watched list in the industry, only had about a half-dozen women on it this year.

(Reporting By Jennifer Hoyt Cummings; Editing by Jennifer Merritt and Lisa Von Ahn)



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