This article is part of a week of coverage by Responsible Investor to mark International Women’s Day 2023.
Despite years of DE&I policies and initiatives, women are still shockingly underrepresented in fund management.
According to Citywire’s Alpha Female report, just 12 percent of portfolio managers globally were women at the end of December –only 1.7 percentage points higher than the level at the report’s launch in 2016. Nisha Long, who headed up the project until last year, told Responsible Investor that progress on female representation has “ground to a halt” in the past 12 months.
What explains this persistent shortfall? The obvious answer would be failures within the industry – and that is certainly the takeaway from RI’s Women in Finance survey.
Responses to the survey – a summary of which will be published on International Women’s Day – show that many women still feel excluded in the industry, experience sexism on a regular basis and face tougher barriers to career progression than their male counterparts.
Yet all too often, the lack of female talent in fund management is blamed on women themselves. They are said to have no interest in investment roles, to lack ambition to advance in their careers or to leave the industry in undue numbers after giving birth.
RI asked some of the women leading the drive for equality in asset management about the most common misconceptions, why they persist and what can be done to correct them.
Myth 1: Women don’t want investment roles
One of the most widespread myths is the idea that women have little appetite for working in asset management. This perception persists despite ample evidence to the contrary.
A good example of the latter is provided by the Diversity Project, an initiative designed to promote DE&I in the investment and savings industry in the UK. Headed by Helena Morrissey, veteran asset manager and founder of The 30% Club, the non-profit counts more than 100 investment firms as members.
In January, it launched a programme to double the number of UK women fund managers in three years, which at the time stood at under 200. The programme has already attracted 60 women from 33 financial institutions. One company reported receiving 40 applications from female employees.
Similarly, another non-profit, Girls Are Investors (GAIN), has seen intense interest in its internship programme for female graduates. Two years after the launch of the initiative, GAIN is forecasting an intake of around 130 female interns in 2023.
It has also proved successful in achieving longer-term placements for women in the investment industry. According to CEO Tanya Tracey, just under 50 percent of interns in both 2021 and 2022 received offers for investment positions or secured a subsequent internship.
Myth 2: The problem is at the entry level
Yet while attracting women into asset management is important, industry participants say the idea that it is sufficient to address the gender imbalance is itself a myth.
“The industry is perceived as male-dominated, so the attraction piece is clearly a challenge,” says Caroline Turner, global head of institutional sales at Octopus Investments and former head of inclusion and diversity at WTW Investments. “But I think the industry needs to shift its focus from attracting women to retaining them.”
Long, who moved from Citywire to Credit Suisse Asset Management in January, notes that at the entry level, the intake is getting close to an even gender split. “When women start out in the financial sector, they are definitely aspiring to fund management roles,” she says. “The ambition and drive are there.
“The bottle necks are within three to four years of career progression. Either women change roles within the asset management sector, or they leave the industry altogether. We need to find out what happens at that stage.”
Again, this is an area where misconceptions abound.
“The common myth around the lack of women in finance is that they’re all leaving to have families,” says Emma Penny, investment management client director at sustainable finance recruitment firm Acre. “That’s not always true. Firms need to ask their female talent and listen to the reasons they’re leaving.”
This echoes a recent report by McKinsey, which found that senior women in business globally were leaving their roles at the highest rate in 10 years. The authors cited assumed juniority, burnout and company culture as the main reasons for what they termed “the great breakup”.
Penny, who is also vice chair of the CFA’s UK DE&I committee, says an exclusionary culture remains one of the key issues for women. “There has been genuine intention to change the industry and make it more inclusive, but I’m still hearing women say they’re leaving firms because they don’t feel included,” she says.
Lack of transparency around pay and promotion was also flagged repeatedly in RI’s survey as a barrier to career progression for women.
“I believe we’d see more women retained by the industry and finding their way into senior positions if they are confident that what they’re asking for is fair,” says Amanda Pullinger, CEO of 100 Women in Finance. “The gender pay gap is a consequence of lack of transparency, confidence and knowledge about the system.”
Another persistent but pernicious idea is that women leave the financial sector because they find it too demanding.
Aneka Beneby, executive director and portfolio manager at Julius Baer, says the presence of women in the industry “despite the obvious existing challenges” suggests that the opposite is true. “There are many women who are undeterred and determined to view any hurdles as a way of growing professionally and personally,” she says.
Myth 3: Investment is a man’s world
This points to another major misconception about the investment industry: that it is an area in which women are not represented at all, particularly in the senior ranks.
Gender equality advocates express concern that persistent headlines highlighting the lack of women in asset management, combined with genuine low levels of representation and visibility, have reinforced the mindset that investment is still a man’s world.
While women are underrepresented in fund management, they are present at every level of seniority. Some of the largest European and US asset managers – including Amundi, Fidelity International, Franklin Templeton and Legal & General Investment Management – have female CEOs.
“The premise that there aren’t any women in finance is damaging,” says Pullinger. “There aren’t enough, but there certainly aren’t zero. This misconception creates the idea that female talent does not exist, which is not the case.”
The emphasis on the industry still being male-dominated has also led to mistaken assumptions about the culture in investment firms, according to Morrissey. “There is still an impression that the industry has an aggressive, macho environment,” she says. “But this isn’t the case for lots of firms.”
Amélie Derambure, senior multi-asset portfolio manager at Amundi, agrees that women should not be deterred by the industry’s reputation.
“There is performance pressure, which might put women off because they think it’s too demanding or the hours are too long,” she says. “But the truth is it’s a team-based industry. This should reassure women that they belong there as much as men.”
For Pullinger, the onus is also on firms to improve the visibility of female leaders. “Women lack the visible role models and transparent pathways to work their way up,” she says. “It’s not that they don’t want the opportunities.”
Myth 4: It’s up to women and HR to drive change
For many women in finance, one of the biggest misconceptions is the assumption that DE&I policies will be enough to achieve gender equality.
A key theme in interviews and from responses to RI’s survey is the need for change to be driven from the top. GAIN’s Tracey says the industry “needs to buy into this from the top down”.
Pullinger agrees that firms which have significantly increased the number of senior investment roles filled by women have been led from the top.
“For firms which have succeeded in increasing the number of senior investment roles filled by women, their initiatives and directives have been holistic, business-focused, and launched from the top rather than HR,” she notes.
Since the top is currently mostly men, their input is critical to changing industry mentality. “The simple fact is we can’t do it without men,” says Long.
Alexandra Morris, CIO at Skagen Fondene and co-lead of Norway’s women in finance charter, says men have a “huge responsibility” to both help with the problem and understand it.
“They need to promote women for us to reach equality in society,” she says. “Around 90 percent of the leaders are men, and it’s a leadership responsibility.”
Morrissey notes that men are “sometimes embarrassed” about how to be any ally. “But it’s just a question of listening,” she says.
Pullinger adds that firms need to think more creatively about recruitment instead of looking in the same places, working with the same recruiters and using the same language for job adverts for female talent.
Penny agrees. “The asset management industry needs to be bold in challenging itself,” she says. “Companies need to think about their talent pipeline in the long-term and put processes in place rather than hire with urgency to meet quotas.”
For women who can overcome the barriers, the good news is that asset management can be a rewarding and enjoyable career, according to Morris. “I’ve had so much fun in the industry,” she says. “I’ve thrived and gone from one challenge to another.”