In financial services, women are often undercompensated, underrepresented and underestimated.
This isn’t just a women’s issue. It’s a leadership issue.
The gender pay gap in the financial sector is steeper than the entire national average. While women now make a disappointing 79 cents for every dollar earned by men, in financial services roles, the numbers are even worse with women earning only 55 to 69 percent of their male counterparts.
In addition to a pay gap, there is also an opportunity gap. According to a recent study by MorningStar Inc., women make up less than 10 percent of all U.S. mutual fund managers. And, of the $12.6 trillion held in those funds, only two percent of those dollars are managed by women. Believe it or not, the gender gap in fund managers has actually widened since 2009, turning back time on equal representation in financial services.
Compare those figures to the fact that women make up 40 percent of the country’s workforce, and something is amiss. In 2014, women in the U.S. served as the leading household decision makers for over $11.2 trillion in investable assets.
More women are in control of their personal investment decisions, yet the number of female investment managers is a far cry from what their talent and size commands.
And that’s bad news for all of us, because women investment managers are exceptional at what they do.
Breaking through the negative outlook, even in the most complex financial strategies and markets, women continue to outperform their male peers. In a study last year, professional services firm Rothstein Kass found that for the six and a half years ending June 2013, the Rothstein Kass Women in Alternative Investments (WAI) Hedge Fund Index returned 6 percent, while the S&P 500 gained 4.2 percent and the HFRX Global Hedge Fund Index dropped -1.1 percent during the same period.
Empowering women on Wall Street is in everyone’s best interest. As leaders, we need to encourage, promote and support women in finance at every turn.
In the treasurer’s office, I was proud to recently name Miriam Martinez as our City’s first female Chief Investment Officer. With 30 years of experience in finance, Miriam has substantial experience implementing large-scale public investment programs, having previously served as Chief Investment Officer of the $16 billion New York State Insurance Fund.
In the few short months that she’s been in Chicago, Miriam has already enhanced returns on our portfolio to benefit taxpayers. As a result of Miriam’s leadership, we are on track to generate millions of dollars of additional revenue from the city’s portfolio.
On Wall Street, the fact that women haven’t been treated equally is unfair to everyone. The absence of equality has hurt our pocket books, our retirement savings and the bottom line.
This Women’s Equality Day, all industry leaders in finance and investments should renew their efforts to be the change that we should all seek. Investing in women is not only the right thing to do, it also leads to better returns and a brighter future for all.
Kurt Summers is the Chicago City Treasurer.