With the rise to prominence of the Black Lives Matter movement, we arguably live in a more diverse and progressive society than ever before. So it’s easy to forget that we still have a lot of work to do on issues that we feel should have been solved years – or decades – ago.

One such issue is gender equality.

Our efforts toward closing the gap between men and women are probably best described as “average”. The UK lies 20th in the Global Gender Gap Index, ahead of countries like Australia and Canada, but behind developing nations like the Philippines and Rwanda.

And when it comes to equality in the workplace, some industries are doing much worse than others. Unfortunately, asset management is one of the main offenders.

Despite efforts to attract more female candidates to the industry, little progress has been made in recent years. By the end of 2000, 14% of UK fund managers were women; fast-forward to the end of 2019 and that proportion was unchanged. Strikingly, there are more British funds run by men named David than there are female fund managers.

It’d be easy to dismiss this as an issue with the wider finance industry. But once you look at the data, that argument just doesn’t stand up. Indeed, across all financial and insurance-related activities, 44% of employees are women.

So what’s going on here?

Why Are Women Underrepresented in Asset Management?

We’re not the first people to have asked this question. But as a specialist recruiter in the asset management niche, it’s something that matters to us a lot.

Partly, it’s a matter of ethics: of course our industry should be doing more to attract female talent, because inequality affects all of us.

But it also makes commercial sense. In fact, companies that rank in the top quartile for executive-level gender diversity are 21% more likely to experience above-average profitability than companies in the fourth quartile.

The gender imbalance isn’t something that’s happened by chance; there are clear reasons why so few women work in asset management. Ric van Weelden, a 30-year industry veteran who has worked for asset managers in London, Frankfurt, New York and Paris, has conducted research on the matter as part of his INSEAD Executive Master in Consulting and Coaching for Change thesis. He found six key reasons behind the lack of female representation:

  1. Lack of Understanding About What Fund Managers Actually Do
    By its very nature, asset management is complex. Not everyone who works in the industry would find it simple to clearly and concisely explain what their job entails – let alone do it in a way that sounds appealing.

While we know that asset management is challenging and exciting, from the outside it’s easy to see it as just another dry element of the finance industry, largely populated by elite, money-obsessed white men.

Whether or not these perceptions are accurate, the fact is that they exist. Until we make a conscious effort to improve this reputation, little is going to change. After all, why would a female candidate pursue a career in an industry that doesn’t appear to be trying to attract them?

2. Poorly Understood Social Value
“Asset management should really be about delivering for people’s ability to earn a pension or buy a house.” So says one of the contributors to Mr van Weelden’s research.

This is a pretty powerful and compelling statement of purpose, but it’s not one that the industry has always stuck to. What’s more, a lack of transparency and scrutiny have left the perception that even when this purpose has been delivered, it may not have been worth the overall cost.

In a separate survey, the majority of respondents – both male and female – said that companies led by women tend to be more purpose-driven, and more desirable places to work. So perhaps the industry’s perceived lack of purpose makes it seem less appealing to female candidates?

3. The Idea That Men Are Simply Better Asset Managers
Traditionally, asset management was a highly individualistic environment, in which people felt that star performers were better than teams at managing funds.

Almost inevitably, this led to a macho, male culture of risk-taking, focusing on upside potential over downside risk.

In reality, there’s little evidence to support the view that men really do make the best asset managers; in fact, the opposite may be true. However, this attitude has certainly existed in the past (and likely still exists in more outdated quarters), which does little to make the industry seem appealing to women.

4. Ongoing Perceptions of Asset Management as a “Boys’ Club”
Many of the respondents to Mr van Weelden’s thesis spoke about the male-dominated culture of organisations, in which men are fixated on jostling for position and outdoing one another. The higher you climb within an organisation’s structure, the more annoying and demoralising this issue becomes, the author notes.

Again, the important issue here isn’t whether this perception is 100% accurate. Certainly, it has been in the past, but we’d like to believe it’s dying out, and will become increasingly irrelevant. But as long as the perception remains, it will be seen as an unpleasant barrier to entry or progression for female talent.

5. Unconscious Bias
While far from unique to asset management, unconscious bias is another issue that may make our industry more challenging for women to thrive in, which may in turn make it less attractive for them to enter in the first place.

Subconsciously or otherwise, it appears that white, male bosses are more likely to favour candidates from similar backgrounds, and with similar characteristics, to themselves. “Therefore a white, privileged male is more likely to promote another white, privileged male based on potential and may promote others based on evidence of relevant experience,” Mr van Weelden comments.

6. Inflexibility Around Maternity & Paternity Leave
Again, this isn’t an issue that only affects the asset management industry, but maternity and paternity leave appear to create an uneven playing field for male and female candidates.

According to Mr van Weelden, the problem isn’t that maternity leave isn’t generous enough. Quite the opposite, in fact. He claims that generous maternity policies, coupled with a lack of uptake of paternity leave, means women spend longer out of the office – and therefore find it harder to progress.

Are There Any Other Factors to Consider?

Mr van Weelden’s thesis offers plenty of food for thought, but conversations with our own network suggest there are other factors at play, too.

A Senior Manager within Marketing & Distribution at a Global Investment Manager gave us the following recent examples that highlight the issues faced by women in asset management. Some of them were experienced by her, and others by colleagues and friends across the industry.

  • Being overtly ignored during meetings This is fairly commonplace and is both confidence-destroying and disrespectful. Some women always find a male-backup before the meeting in the knowledge that her male counterpart’s voice will be heard and the point taken as valid.”
  • Gender-based and gender-biased name-calling For example, voicing business concerns surrounding commercial decisions and subsequently being told to, ‘Stop being such a drama queen’. These sorts of comments are designed to undermine women and quieten their (often very rational) voices. The fact that an apparently professional and intelligent person feels comfortable in making such comments is alarming.”
  • Being applauded for success ‘in spite’ of being a woman “For example, “You’ve done very well, for a woman.”
  • Probing questions about marital status, family, and life plans: “In one case very openly being asked during a conversation about a pay rise, “Can’t your boyfriend provide for you?”
  • Feeling left out of the boys’ club, or being treated differently: “For example, to celebrate success on an incredibly hard project, one female colleague was sent a thank you email, whilst her male counterpart was invited out for beers with the lads. The ‘lads’ happened to be senior stakeholders within the firm. So whilst the context was a casual celebratory drinking session, the opportunity for networking and building relationships was open for one person and closed to the other.”
  • Menstrual cycles:“Yes, there is much taboo around this topic, and frankly with half the world’s population bleeding through an entirely natural process I think we need to get over it. Women who can be fatigued, exhausted, in cramps or in intense pain (one doctor described its equivalence to a heart-attack) must nonetheless stay silent, hide their tampons on the way to the toilets, and carry on. I know in Japan there is now some annual leave allowance to accommodate this, but we need to talk more openly about it in general so that women aren’t made to feel like they have some horrible disease they must hide, and continue to perform at peak no matter what.

These are examples of microaggressions: brief and commonplace daily verbal, behavioural or environmental indignities that, whether intentional or not, are derogatory, negative, and hostile. The individual acts may seem insignificant or easily brushed off, but they have a big impact.

“In many, if not all, of these cases, both myself and the women I spoke to (strong, intelligent, independent, professional women) felt undermined, silenced and shocked,” she tells us.

“Thereafter, [women feel] unsure of how to tread. Say something and risk being further attacked? Risk career progression for being too outspoken or troublesome? Say nothing and quash one’s own dignity in order to stay safe, keep a low profile and try to succeed upstream? Stay silent and soldier on, working twice, thrice as hard to prove herself and her place in the corporate world?

“It is, needless to say, energy depleting and a constant balancing act. If she is bold in her actions she might be called bitchy or aggressive, callous and cold-hearted. If she displays emotion, then she might be too weak or too emotional for the job. 

“Women must learn to tread the tightrope of corporate masculinity, and whilst things are improving, the above examples are proof that we have a long way to go.”

Final Thoughts

We think you’ll agree it’s not a pretty picture. 

Much as we’d love to think gender inequality is no longer an issue – in the workplace, or anywhere else for that matter – the fact remains that it definitely is. All the examples we’ve included in this article were provided by just one woman in our network; imagine how many we’d have received if we asked five women, or a dozen, or 100.

In our next newsletter, we’ll be looking at some of the potential solutions. Actions we can take right now, or that need to be put in place in the near future, to deliver real change.

You can also download our latest guide below for more information on diversity within Asset Management.

In the meantime, get it in touch to learn how we can help you attract exceptional talent from more diverse backgrounds.

The Berkeley Croft team