The landscape for women in finance has changed notably over the past two decades. Today, women represent 46% of financial services employees, according to a study by Mercer. This growth, however, has been predominantly at the junior level; women represent only 15% of the top ranks in finance, and the number falls even further at the CEO level, with a mere 4% of financial services firms run by women.
International Women’s Day on March 8 reminds us that while the financial services industry has taken steps in the right direction, we still have a long way to go to achieve a representative gender balance.
Why does the gap persist?
The gap between the junior levels and the most senior ranks in finance is stark. A 2016 study by Oliver Wyman, “Women in Financial Services,” showed that women tend to have shorter careers within the industry and that the drop-off tends to occur at the mid-career level, in large part due to the challenges women face balancing their career and their family life.
This gender gap puts not only women at a disadvantage in advancing within the industry, but also the firms they work for – which lose a diverse and skilled cohort of employees. Numerous studies have shown that women think about and manage risk differently from men and yet produce similar risk-adjusted returns. In an industry that actively seeks differentiated and uncorrelated portfolio risk, losing a group of employees who bring diversity in idea-generation and strategy presents a tangible loss to financial services firms.
Investing in future leaders
Still, financial services firms have made progress in recent years to attract and retain female talent. PIMCO’s partnership with Girls Who Invest, a nonprofit dedicated to increasing the ranks of women in portfolio management, is one of our inclusion and diversity initiatives that aim to close the industry’s gender gap. As a highly committed sponsor of the organization, PIMCO is investing in the development of a pipeline of future female leaders in asset management, with the goal of 30% of fund management run by women by 2030.
The theme for International Women’s Day 2019 is #BalanceforBetter, and it serves as a good reminder that while the financial services industry has made strides, until we have achieved gender balance across all ranks, the mission is not complete.
Explore PIMCO’s Women & Investing platform.
Erin Browne is a managing director and portfolio manager in the Newport Beach office, focusing on multi-asset strategies, and is a contributor to the PIMCO Blog.