When Equal Pay Day in the U.S. falls on the final week of Women’s History Month a year into an economic crisis that has affected women disproportionately more than men … well, there might just be a few things to talk about. Especially when it comes to the financial services sector, which historically has lagged in its equity efforts.
So I gathered two of the smartest women in the sector to get their perspectives on women in finance on both sides of the coin: women as professionals and leaders within financial services, and women as consumers of and investors in financial products.
Reshma Kapadia, associate editor of Barron’s Magazine, has covered topics that span investing, retirement, and emerging markets for more than 20 years (previously she held roles at WSJ’s SmartMoney and Reuters).
Amanda Pullinger is the CEO of 100 Women in Finance, a global association that empowers women working in the financial industry through education and peer engagement.
Here’s what they had to say.
Women working in financial services
When it comes to female representation in financial services, we’ve come a long way. A recent Deloitte analysis found that although women make up more than 50% of the U.S. financial services workforce, they account for just under 22% of leadership roles.
“There’s a multiplier effect,” said Pullinger. “When women are at the top of an organization there are more women who seem to be drawn into CEO ranks. Women want to be able to see that they can take a pathway into a role. The first step is for all of these women in these roles to be really visible and transparent to the next generation of women.”
“I think the industry has been talking about this since the late ‘90s,” said Kapadia. “When you look at the numbers, roughly two percent of assets are managed by women. Only a quarter of financial advisors are women, and these numbers have been stuck for decades.”
But it’s not just gender equity that is important to get right—racial equity is also severely lacking in the industry. According to Catalyst.org, the percentage of black women in executive or senior level roles in financial services accounts for just 1.3%, Latinas for 1.3% and Asian Women for 1.8%, compared to 26% for white women.
Kapadia offered four ways to tackle this:
- Be honest about the industry’s role in the racial wealth gap and address those issues by understanding and recognizing the data.
- Get leaders of color in the industry to talk and be more visible.
- Think out of the box in terms of recruiting, not only in conventional places like HBCUs but in unexpected places where you can reach different people.
- When you get people of color in the door, set them up for success by supporting and mentoring them.
Pullinger has been especially focused on this topic in the last year, forming a partnership with Black Women in Asset Management. In response to the Black Lives Matter movement, she asked herself, what can I do in my world to make change?
“I started by being deliberate, by reaching out to women of color in the industry via LinkedIn and asking to have conversations,” Pullinger said. “It was a very simple but quite powerful tool to really enlarge my own network. We need to be deliberate about seeking those that are outside of our network.”
Investing in women through financial services
It’s critically important to understand the worth of women participating in the economy, and how financial services can unlock this power. In the U.S. specifically, through the pandemic, we’ve seen a Great Female Recession. And we know that women experienced the highest job losses. A new study from Fidelity showed the toll on women and the historic levels of stress they’re enduring surrounding their finances, job security, and long-term savings: Nearly 80% of women are currently feeling the weight of that financial stress, up from 67% the previous year. And our own Ketchum research shows that 44% of employed American women say they feel more burned out in their job now than at the beginning of the pandemic. Is it a question of services and support—or financial literacy?
“There is a disproportionate hit on women due to the pandemic,” said Kapadia. “Women are even considering downgrading their careers. Now we’re seeing more of the innovative companies thinking about workplace flexibility. The proof of whether it will work will be a year from now if these companies are willing to hire these women back even if they have a gap on their resumes.
“An economist told me, ‘It’s not about equality but equity.’ It’s not about giving men and women the same situations. Women have more duties, and it’s about meeting them where they are. It’s rethinking how you promote, how you retain people and think about your pay packages.”
“It always bothers me that some of our best investors that are women are terrible at investing in themselves,” said Pullinger. “They don’t think about their needs—they think about others around them. It’s a lot more complex. [The industry needs to] really listen to what’s out there and produce products that meet those needs. And women have to elevate their priority in investing in themselves and for the long term.”