female financial experts

female financial experts

Empowering Female Financial Experts: Breaking Barriers and Achieving Success

1. Introduction

Just 6 years ago, Liz Ann Sonders was a working mom raising her children while working as an investment strategist at an asset management firm. Today, she is the Chief Investment Officer of a $1.2 trillion investment advisory firm. Speaking to a room of professionals at the firm’s Women’s Leadership Summit, Liz Ann detailed her journey to success and how she reached the top of her industry. Her story emphasized the struggles of balancing personal and professional life, of male dominance on Wall Street, and the external and internal struggles one faces when gunning for leadership positions while being female. At the end of her speech, Sonders noted that despite improving conditions, reaching gender equality in her industry still had a long way to go.

In 2015, many cracks have formed in the glass ceiling and institutional investors have acknowledged the necessity of gender diversity, recognizing that companies which overlook half of their potential workforce would miss out on less risk and better returns. At the same time, efforts are underway to promote the centrality and development of women within the financial industry at large.

With a scope of ways to improve gender diversity being so broad, this paper sets out to formulate a comprehensive view on the topic in asset management. We employ a historical context and industry trends research methodology. We unearth the field’s longstanding correlation with societal trends, both in regards to labor and capital, and the ways in which these reflect investment professionals’ choices. Effective industry scrutiny favors comprehension of this background, directed action rather than superficial gender diversity metrics.

Meanwhile, there is potential for organizations interacting within the asset management industry to benefit from the largely untapped pool of talent represented by financially smart individuals who never pursue a career in finance. These organizations can further modify factors that currently impede retention or career advancement, integrating a mutually beneficial career path. In sum, we posit that asset managers with significant stakeholder commitment and internal appreciation of women will outperform those who do not. In the following sections, we provide detailed arguments and supporting evidence to support our view.

2. Historical Context: Women in Finance

The financial sector has been entrenched as a men’s profession since its inception. Male stockbrokers were employed by the world’s oldest and most prestigious brokerage firms since the 17th century, controlling a discriminatory stock exchange environment. Women’s invisibility on Wall Street was gradual; for decades, they were limited to answering telephones on the trading floors.

When World War II was launched, women were purchased on the trading floors for standardized jobs as men were summoned up; at the end of the war, women traders were fired without warning. Things were not much different after the October 1929 crash; people who had worked on the trading floor at the time said they had not seen a single woman or, if they did, they were new hires helping out and answering phones with no chance of getting a shot or a bonus.

Pneumatically operated elevators were introduced solely for men at the end of the 1800s and were still in use at the start of the 1900s: women were banned because it was believed they could not be trusted to operate the lift. Despite one has to wonder how dare women use the lift alone if they had no right to enter the stock exchange, and if they had no right to enter the stock exchange, how could it be possible for women upstairs to in the first place.

No women held a significant position within the brokerage houses, and the exception to this rule was the Robinson and Walen department store, which had a small chain of brokerage houses run by Rachel Eaton, sister of Edith Roosevelt, President Theodore’s wife. Women, who were not considered worthy of trust, had to face gross prejudices.

3. Challenges Faced by Female Financial Experts

Challenges women have long faced in finance are similar to the challenges they have long faced across industries around the world. These barriers include implicit and explicit bias, discrimination, harassment, unequal pay, and lack of representation at the top level of organizations including board representation and c-suite jobs. For example, a 2020 survey by KPMG showed that women hold only 13 percent of board-defined CFO roles in Fortune 500 companies. Nearly half of the companies did not have a single woman in a board-defined CFO role. The Huffington Post notes that the job of CFO is often perceived as a prime stepping-stone to becoming a company’s CEO. Nevertheless, it is rare for a CFO to rise to the level of CEO, and CFOs are much less likely to be hired externally than other top deputies.

A major challenge identified for women in finance is the demands of their job. Female CFOs often have heavy workloads that include long hours and extensive travel requirements. This creates numerous time-inconsistent challenges for women CFOs by making it difficult to better balance work and home life during their pivotal private and professional stages of their job.

Information for CFOs, and for other finance professionals, is secondary for women who primarily have caregiving responsibilities. This disadvantage can increase earnings inequality and reduce the development of female talent. When women decide to scale back their career aspirations, their take-home pay for multiple years is adversely affected. Women CFOs in this stage of life, according to one CFO, may find it difficult to take outside jobs because they are single parents of young children and do not feel like a week of additional work on top of the demanding jobs is feasible. They are struggling to find time for a full-time job because they are fully aware that full-time wages are not adequate to cover the cost of caring for the increase in the children they have reached. They will spend the bulk of their child’s youth at this stage of life. According to the report cited above, as senior finance executives, the impact will be felt in the increased difficulty in recruiting and developing top female talent, attracting talented females to strive for leadership, and starting finance positions within companies.

4. Success Stories and Role Models

Miriam Nizigama, co-founder and executive director of the financial collective investment vehicle Starfish East Africa, followed an unusual path into financial services. Nizigama was working at the African Institute for Financial Markets and Risk Management for a mentor, Dr. Co-Pierre Georg. He was passionate about financial markets development and saw in college students a pool of potential future authorities in finance, financial engineering, and related fields that could make a significant difference in deepening and growing African financial markets and associated financial sector professionals. That experience with young people, and the way they were being groomed to be future authorities, was for Nizigama much more electrifying than the routine calculations she looked at day to day. She realized that working with youth and women was what she loved doing most, and concluded that career satisfaction would be about the difference she could make and the capacity she could build, not about money or titles. “Success,” she reflects, “is not something that we pursue, it is something that we attract.”

5. Strategies for Empowerment and Advancement

Strategies to expand female inclusion and advancement in finance must be multifaceted to dismantle the unique barriers faced by women in this large, growing, and influential sector. The following discussion presents examples of direct interventions to address the many barriers that women face in the financial sector. As with all discussions of diversity, expertise must be brought into every conversation. The inclusion of women in financial institutions, companies, and government entities that engage in discussions and have decision-making authority in these areas is crucial to crafting, implementing, and evaluating relevant gender lens interventions. Given that reforms have largely failed to achieve effective equality, new disruptive measures should be sought and, where possible, tested in real-world and lab environments. This paper is intended to provide motivation and guidance to such continuing efforts.

Evidence indicates that statistics are indeed powerful tools to drive change, especially when they are broken down to show how the challenges differentially affect members of marginalized groups, such as women. This is apparent in the success of major campaigns to bring gender-based violence to the public eye and direct both media and political attention to those affected. Policymakers now need to heed the call for greater attention to gender disparities in finance. Equally important, the private sector, still a force in male-dominated services, should be incentivized or pressured to address these disparities. They need to understand not only how it would benefit people like themselves but why women still matter now.