Posted by: dickardnora | January 24, 2019

How the Financial Field Discourages Women from Sticking Around

Financial services such as financial advising and investment banking have long been held primarily by men. The article asks you to google images of “financial advisor” and see what comes up. While there is a few women shown in the pictures, it’s still mostly men. The difficulty in finding women leaders for the financial industry isn’t recruiting talented women, but it’s getting them to stay long term.

For the financial services, income is primarily commission. Each advisor has clients, whom the advisor is responsible for investing their money.  Depending on how much money you make for your clients, you receive a percentage of the profit. This incentivizes the advisor to work hard and be the best at their job. The article considers this a reward system, or “feast or famine” type jobs. For women in this field, the reward system can be discouraging in the beginning. The people who succeed in these jobs don’t mind taking the risk in the beginning, hoping it ends in high return. Women are typically considered more risk adverse then men, which is why women might chose to find a field with more stability.

The article explains that the financial field has a pipeline problem. For both men and women in the field, senior management levels can over a decade to achieve. The reason why women might be underrepresented in senior levels of financial advising could be that they decide to find more stable jobs elsewhere. Another reason, as is true in many other fields, is simply women being discouraged by their co-workers or even clients. Part of your job as a financial advisor is being able to obtain and retain clients. The women in this field also face the double bind of needing to be likable, but not so likable that you won’t be taken seriously in your ability to perform your job.

This industry is known to be full of long hours. There is high risk with the work to easily gain or lose money for yourself and your clients. How do you think we can explain why women tend to exit this field? Is it the nature of the job itself or the culture of the work places? Is the double bind women face here more challenging to navigate?

https://www.wealthmanagement.com/industry/what-stops-women-finance-it-s-culture-culture-culture


Responses

  1. After reading this article, one of the things that popped into my mind was the idea of stereotype threat. I know we mentioned this idea before, but I also think from the psychological standpoint of this issue it is something could also play a factor in why women are unable to maintain a high retention rate in this field. In society, it is extremely likely that men are more likely to be better at math-related things. It is something that is engrained in the minds of individuals during standardized tests that occur in middle and high school. Though this field does not necessarily rely solely on math and needs the charisma of good leaders, women may be more likely to feel like they cannot meet the standards of the field because of what society has created, thus causing them to remove themselves from the field. Though there are the pipeline issues mentioned in the article, which I also agree with and think is a valid explanation, I also think that the idea of stereotype threat may be influencing women in the financial field.

  2. I can see how if women do not have a strong group of coworkers encouraging them from the beginning, then they may leave to find a more stable job. I can also see how the double bind is even stronger in this context due to commission. It takes time to establish your reputation as a good leader. People have to see you work hard and in different situations to gain a respectable reputation. When commission is on the line, there will be many lows and highs in the job and having the double bind on women probably makes this even harder. Being like-able as a woman definitely takes more tedious analysis of action than that of men. Women in roles such as financial advising have to show competence and dominance without coming off in a dislikable way. Not only does that put the respect of their coworkers on the line but also their actual income is directly influenced. This may be why women do not stay long enough to move up.

    Another point I thought of is that if women start this position and then decide to have families and turn toward the more traditional role of raising a family at home, the long hours and instability of this job may be too stressful on the woman resulting in leaving the position. When providing for a family, work hours and income do not only affect you but affect others as well.

  3. This sector is of particular interest to me because my brother works in the financial advising business; I’ll have to ask him how many women work as fellow financial advisors in his office and how long they’ve been there. Your topic and corresponding article bring up some really interesting points about this sector and where women fit in. It seems like the double bind may keep women out of this field, especially if they’re working with male clients; male clients may be more likely to fall into the double bind because their financial advisor is handling their money. I also wonder if the policies in place at financial firms lean towards helping women keep their jobs, such as sufficient maternity leave or a strong HR department to deal with sexual harassment and discrimination issues. Since this sector doesn’t have a high number of women in the workforce, I would think it’s fairly possible that some policies were made without considering what women may need to not only be successful, but to want to remain in their jobs at all.

    Additionally, the way that women typically lead (as discussed in this week’s readings) may not be conducive to this particular sector. As talked about in the article and in class previously, women are typically more communal leaders and like to build relationships. Is this type of leadership best for this type of job? One can argue that building relationships with clients is key to managing their money effectively, as was in the case of the widow at the end of the article posted. One can also argue that this is a job that doesn’t require the ability to form strong relationships, all that matters is reaching a goal and making more money. It would be interesting to delve even deeper into why this sector is hard for women leaders to break into.

  4. I do agree on your point that women may shy away from risk more often than men. Interestingly enough, I am reading a novel about Russia and it is the complete opposite over there. In Russian culture, women are seen as the ones who will “save society” as put by one man whom the journalist interviewed. After the 1990’s when the Russia economy collapsed, men were not used to having to go to work and make small sums of money (even though this would eventually add up) because the Russian man is seen as wanting to “make a million – and does not realize that that starts with making one dollar bills first”.

    The cultural context is so intriguing because it portrays women as having the guts and stamina to work through risky jobs to eventually come out on top. Based on this week’s reading, women are portrayed as being collaborative and innovative. This leads me to wonder if that is why more women are in professions that readily demand collaboration and relationship building (i.e. teachers and nurses, as both professions require personability to relate and empathize with individual needs).

    I also think that a lot of women may be hesitant to sign on to something that requires 10 years to accomplish as many young women may not want to limit themselves to staying in one location. As I am personally about to embark on a 5 year veterinary school program in the U.K., I am very aware of the fact that one day I want to have kids, and I’m not sure if I would want that to be in the U.K. or back here in the states. While this is on my mind, it is no doubt also on other women’s minds. It seems that stereotypically the male in the relationship relocates the family for his job, and it is the wife who follows. Perhaps promising 10 years of your life in one spot generates an insecurity about the possibility of limiting your husband or children to that same location.
    I’m not sure if I even agree with all of the above statement, but I do feel like women tend to navigate towards a safer option in regards to professions.

  5. This post particularly resonates with me, as I have worked in the financial services industry the past two summers in DC. Both summers I worked in Communications, the first for a financial services trade association, and the second on a financial communications team for a communications consulting agency. And you’re right, this field is very male dominated and the women that you see in senior management positions are few and far between. For me, those women proved to be especially inspiring because they were women that I could look up to and hope to be some day.

    Though i was only in those settings for short periods of time, I did notice I double bind effect occurring. Women had to strive to be likeable, but they also had to work extremely hard to come off as competent and agentic. Having “men handle finances,” is a practice that has generally gone back for some time, with the notion that men are breadwinners within the family and take care of monetary issues. This same concept of “men handling the money” has also translated over to the financial services field. From what I observed, it was imperative for women in this profession to take on more masculine leadership and communications styles in order to be heard and listened to. Additionally, I always felt that if I were to enter the financial services field full-time, I would need to work extremely hard to be competent and show that to others in order to be taken seriously. This feeling has acted as a limitation before and even made me doubt if this was the right field for me.

    Two years ago, Lauren Simmons became that youngest trader on the floor of the NYSE. She was 23 and the first female African-American to serve in this position – talk about breaking boundaries. Her story is so inspirational that it has even inspired a movie. Having female role models to look up to like Simmons, as well as the female supervisors that I’ve had within my time interning, have been so important to show me that women can have a viable and stable career within this field. It is important for women to be represented here.


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