What are the challenges for achieving gender diversity in funds management and investment management teams?
The Insights Papers considers the issue of gender diversity, what is contributing to it and puts forward suggestions that investors can take to improve gender diversity. The paper explores the business case for diversity and also identifies a number of reasons why women leave leadership pathways. This includes;
- A lack of women leaders and role models making it hard for both women and men to visualise women as successful leaders.
- A lack of understanding and opportunities – companies that haven’t given women the same development opportunities may make it difficult to find women with the right skillsets to fill leadership positions. Women need to be given the opportunities to develop and also see themselves as leaders.
- Lack of confidence and unwillingness to self-promote.
- Lack of support and financial means – companies should offer parental leave for women and men, return to work programs, the opportunity to work flexibly and pay equity.
The Diversity Project engaged Mercer to conduct employee-level research into the level of diversity in the investment and savings industry in the UK. Over 3,700 persons from 24 UK firms participated, with Current and Former Investment managers (650 investment managers participated) as well as Adjacent Talent participating.
This report looks at the career pathways into, and career intentions of individuals in investment management. To identify barriers to diversity the project also surveys employee perspectives
- Investment managers - 22% female and 78% male
- Barriers to diversity include
o promotion and hiring perceived to be exclusive –people are perceived to hire in their own image, and are susceptible to group think;
o not being as well networked, believing that individuals need to be part of an exclusive network or club to succeed, was ranged as the top inhibitor to diversity;
o the perception amongst some participants that fund management and trading roles were not suitable for part-time roles; and
o a lack of diverse role models was also identified as an issue, together with a company culture of being intolerant to flexible work arrangements.
This report by Oliver Wyman outlines the findings of their extensive study of 381 financial services institutions in 32 countries looking at gender balance in financial services. The report suggests that many women face a mid-career conflict and the following factors contribute to this:
- Insufficient flexible work options and stigma when using flexible work arrangements;
- Insufficient support for family responsibilities (both for women and men);
- Shortcomings with promotion processes and equal pay;
- Low inclusion in culture affecting women such as invisible unconscious biases and traditional assumptions.
Within portfolio management in particular2, three key issues contribute to the lack of female representation:
- Culture and image: the culture and image of asset management is a barrier for attracting and retaining female staff.
- Graduate recruitment: more on-campus education and public relations work may be required to promote awareness of and to change the image of asset management firms.
- Perceived barriers to flexible working: the increasing use of technology in money management is likely to challenge traditional approaches to portfolio management and call for less face time. Senior leaders should also consider leading by example, by using flexible work options themselves and sharing stories of successful female portfolio managers.
At a corporate level, some of the reasons why organisations haven’t achieved greater gender diversity is that diversity is often seen as a fairness issue or part of corporate social responsibility instead of a commercial imperative and that organisations haven’t found the right way to combine flexible work arrangements, cultural change, sponsorship and the way to advance women.
The report suggests both structural solutions and cultural change are required.
1 Mercer (2017) Diversity in Investment Management Benchmarking Study - report for the diversity project, page 7.
2 Women in Financial Services see pages 75-79.