The most important difference from other studies and articles is that they’re up to this point on the pandemic and propose solutions to mitigate the imbalance within the investment management workforce. Where does the issue begin? And how does it end? The authors immediately show that only 10% of portfolio managers are women and that majority-women-owned investment management firms manage lower than 1% of the world’s investable assets. They wonder why the culture of investment management results in the underrepresentation of girls, because it does in certain other fields where there’s a gender imbalance, corresponding to Silicon Valley. Carr and Dudley explain tips on how to implement gender diversity, not only since it is fair, but in addition since it makes economic sense. Gender diversity, she believes, will help investment management firms higher reply to the dual threats of passive investment management and technological innovation. It can improve investment results.
Carr and Dudley contrast financial literacy with investment literacy. Financial literacy helps pave the best way by providing quantitative skills that increase women’s confidence to pursue a path in investment management. However, confidence in working with numbers, a high quality more essential than possessing advanced quantitative skills, is just one of the essential personal qualities related to portfolio management. These include mental curiosity, analytical skills and the courage to steer.
Next comes a diagnosis of the gender imbalance within the industry. This discussion is difficult since it is sort of inconceivable to say exactly where this imbalance begins. If a little bit girl’s mother or aunt is a portfolio manager, that girl will practically grow up knowing what the job is all about. But that is not the case for many ladies. To become familiar with this issue, the authors conducted greater than 100 interviews with undergraduate and graduate students, in addition to current and former industry practitioners. They debunk myths corresponding to the impossibility of achieving work-life balance, the higher suitability of men for the job, the shortage of female role models, the requirement for excellent and intensive math skills, and the “Wolf of Wall Street” because the archetypal investment manager. In a big survey cited by the authors, certain facts emerged as to why female students don’t decide to work in investment management:
- They see it as a male-dominated occupation.
- They are less likely than men to think about investing as a profession path.
- They are less knowledgeable than men concerning the industry and the roles available to them.
- They have less confidence of their ability to get one among these jobs.
Readers (no matter their gender) will benefit from the authors’ stories about their lives within the investing business and within the classroom. Both benefited from luck and naturally from hard and joyful work. And I particularly like this quote: “Investment management is a great career with significant financial opportunities, intellectual stimulation that is often missing in traditional financial careers like investment banking, and in most cases a quality of life that is reasonable compared to other careers.” Another A giant reason why so few women pursue jobs in investment management after graduating is the shift toward passive stock investing. There are only about 20 large investment management firms within the United States, and even the mid-sized group is shrinking through consolidation.
Carr and Dudley’s solutions are to reverse the cycle that has made women a minority within the industry:
- Only a couple of senior managers
- There are few female recruits (entry-level analysts), which lowers female retention rates
- Fewer females remained
- Fewer women than men in middle management and even fewer in senior management
The goal is to draw and retain women. How is that this goal achieved? Carr and Dudley suggest the method begins with measures corresponding to increasing the visibility of investment management careers for girls, addressing existing image issues and creating more entry-level opportunities for careers within the industry. This includes improving women’s investment skills, changing hiring criteria and supporting organizations that improve the pipeline. Once women represent 30% of the sphere and have a recognized voice, they and their employers could have to take care of ongoing challenges corresponding to: B. Delays in promotions, equal pay, equal culture, good networking opportunities and boardroom representation.
I used to be a little bit disturbed to see that the organization that got me began in investment management greater than 40 years ago, the Financial Women’s Association (FWA, founded in 1956), was not mentioned in any respect. FWA has developed exceptional programs to introduce talented women to investment management, particularly through its Baruch College (undergraduate) mentoring program. On the positive side, the book’s appendix highlights many more moderen organizations that I used to be not aware of, corresponding to Women in Investing.
Overall, I find it charming and a precious reference work. I’ll recommend it to many colleagues, young and old, no matter gender. The book will likely be of great profit not only to women, but in addition to other groups which can be underrepresented in investment management. Not only does it comprehensively cover gender non-diversity, nevertheless it also provides a singular overview of a occupation that few have access to before diving into it.
If you enjoyed this post, do not forget to subscribe.
