Data shows gender diversity improves investment outcomes. Achieving it will mean getting the word out that the old ‘blokey’ days are long gone, writes Maria Wilton. 

OPINION | Building professionalism and confidence in the investment industry is a priority for financial services companies and government alike.

Success will have benefits for investors, the industry and our society in terms of improved outcomes for retirees and a larger pool of capital invested in the Australian economy.

The CFA is the largest global association of investment professionals and is committed to raising the bar across all facets of the industry in order to improve investor outcomes; therefore, raising awareness
of the contribution diversity can make to professionalism and confidence in the industry is an increasing and natural focus of attention.

We know numbers talk, and the evidence that more diverse teams tend to deliver better results is strong. McKinsey & Co’s January 2018 report Delivering through Diversity revealed that companies in the top quartile for gender diversity in their executive teams were 21 per cent more likely to achieve above-average profitability than companies in the fourth quartile.

The report showed Australian businesses leading the way. Australia topped the charts with respect to women’s share of executive roles (21 per cent vs the US at 19 per cent and the UK at 15 per cent). And in terms of board positions, 30 per cent were held by women in Australia, compared with 26 per cent in the US and 22 per cent in the UK.

That’s the good news – if you can call it that, given that women make up half of the population!

The bad news is that the gender mix of the investment industry falls way behind those summary executive and board statistics. Only 18 per cent of CFA Institute members globally are women, and that figure is 15 per cent in Australia. As AustralianSuper CIO Mark Delaney put it at the 2017 CFA Australian Investment Conference: “That’s ridiculous!”

Times change

Unconscious bias in hiring and promotion is likely to have played a role, but how women perceive the industry is also a barrier.

A survey sponsored by the Financial Services Council and BT Financial Group indicated that the time taken to fulfil the educational requirements, and the perception of financial planning as a sales-driven profession, are deterring women from pursuing careers in the investment industry.

In reality, the nature of the industry has changed over the last 30 years, and it offers flexibility and reward. Notions that investment decisions are made in dark, smoke-filled rooms, or on the golf course, are far from the truth today.

Women looking for analytical and technical investment roles don’t need to ‘sleep under their desks’, as was the perception of people working in investment banks in the 1980s and 1990s. Professional investors follow disciplined investment processes, need to justify and document their decision-making and are subject to significant scrutiny. There is nothing blokey about this!

Men have no competitive edge over women in identifying the fundamental and structural drivers of markets and stocks. Many financial services companies are proactively supporting women (and men) by offering flexible working arrangements for family needs. Likewise, women are now actively sought after for distribution roles because they are good listeners (now there’s some gender stereotyping!) and offer deeper customer insights.

Women are increasingly occupying senior leadership positions and breaking down the old stereotypes, providing positive female role models along the way.

Recognition of the importance of culture and the many diversity and inclusion programs that are in place also augurs well for the increased participation of women in the investment industry.

The launch of the CFA Institute’s Women in Investment Management Initiative aims to increase the number of women in the industry and provide support to them, to build the business case for diversity and improve investor outcomes as a result.

Maria Wilton is chair of the CFA Institute of Australia’s diversity committee . She is a  former chief executive, and current advisor to, Franklin Templeton Investments. 

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