By Andrea Mingels and Daniel Uribe
It is known that women can do it all … women are college graduates, wives, mothers, CEOs, Presidential Runner-Ups, etc. There is nothing that a woman cannot do, except, maybe in today’s male-dominate world of finance. According to Investopedia, “Studies conducted by the Harvard Business School paint a grim picture: among senior roles in venture capital and private equity, women held just 9% and 6% of the positions” (“Why Are So Few Women in Finance?”, 2018). This means that over 90% of all senior roles belong to men. It’s 2018, where are the women in the world of finance?
Women are more educated than ever. According to The Atlantic, “This fall, women will comprise more than 56 percent of students on campuses nationwide, according to the U.S. Department of Education” (“Why Men Are the New College Minority”, 2017). With more women earning college degrees, shouldn’t we expect to see more females having senior role positions than men? That’s what one would expect; however, it is not the case for the financial services industry. One could blame it on the fact that there are more men majoring in Finance than women, and while this is true, the numbers still do not match up. According to Investopedia, men account for 61.5% of degrees in finance in 2018, which means that women make up the additional 38.5% and this percentage is increasing every year. (“Increase the Number of Women Advisers an Uphill Climb”, 2018). With an increase in women Finance majors, one would expect an increase in women Certified Financial Planners (CFP). However, this is not the case. According to Investment News, “The Certified Financial Planner Board of Standards data show women make up just 23.2% of certificate holders, a percentage that has been steady for the past 15 years.” (“Increase the Number of Women Advisers an Uphill Climb”, 2018). Why are so few women fulfilling a career in Finance? Who’s to blame in this situation – the employee or the employer?
Well, it’s complicated. In the financial industry, it is often older Caucasian men who do the hiring. They have an unconscious bias to stick to the norm of hiring other white men. When women do get hired by a financial firm, they often feel out of place as they look around and realize that they are the only female there. They may begin to question their abilities and think “Can I really do this?” If that is not discouraging enough, women quickly realize that they are not advancing in their careers as quickly their male colleagues are. Around age 28 to 30, it is common that women will take time off to start a family. While they are on maternity leave, they often miss out on networking opportunities that men are receiving that eventually lead to promotions. According to InvestmentNews, “men are being promoted at a 16.5 percent rate over women, who were promoted at a 10.3 percent rate” (“Why Aren’t There More Female Finance Advisors, and How Can You Improve Gender Diversity”, 2018). Traditionally, while men are being promoted to more powerful, higher paying positions, women employees remain stagnant in their careers which often leads to feelings of frustration and dissatisfaction.
How can things change so that women receive equal opportunities in the financial industry? The first thing that needs to be changed is the hiring process. If a company wants diversity in the workplace then they must also include diversity in their hiring team. Businesses should have multiple individuals with diverse backgrounds and perspectives to hire new employees to ensure that there is no unconscious bias. While hiring more women will help alleviate the issue, it will not solve the problem. To help retain female employees, companies will need to create a more flexible work environment that prioritizes a healthy work-life balance. Companies can ensure a supportive work setting by providing their employees with paid maternity leave, as well as flexible work arrangements after women return from an extended leave. Simple things such as these will make a tremendous difference in the retention rate of females in the financial industry. With a new hiring process and a supportive work environment, more women will enter and excel in the world of finance.
At Good Wealth Management, we are committed to giving women more opportunities in the financial industry. Interested in a career in financial planning? Contact us.
Sources:
Benjamin, J. (n.d.). Increasing the number of women advisers an uphill climb. Retrieved from http://www.investmentnews.com/article/20180112/FREE/180119974/increasing-the-number-of-women-advisers-an-uphill-climb
Chandler, S. (2018, April 02). Why Are So Few Women in Finance? It’s Complicated. Retrieved from https://www.investopedia.com/articles/investing/092315/why-are-so-few-women-finance-its-complicated.asp
Le, L. (2018, January 19). Why Aren’t There More Female Financial Advisors, and How Can You Improve Gender Diversity at Your Firm? (Part 1). Retrieved June 8, 2018, from https://hearsaysystems.com/2018/01/female-financial-advisors-gender-diversity-part-1/
Marcus, J. (2017, August 08). Why Men Are the New College Minority. Retrieved June 8, 2018, from https://www.theatlantic.com/education/archive/2017/08/why-men-are-the-new-college-minority/536103/