Women In The Finance And Trading Sector On The Rise

According to data from Oliver Wyman, a company that specializes in corporate management consulting, a survey of 150 of the world’s leading financial institutions found that only 13% of executive members at these institutions are women. In addition, only 4% of executive level female members are CEOs. Although this is a sad and depressing state of affairs, winds of change are blowing across this male dominated industry. Below is a detailed look at the rise of women in the finance sector.

Several factors have contributed to the rising number of women in the finance sector. To start with, data from the International Monetary Fund (IMF) shows that more than one billion women have joined the labor force globally in the last 30 years. As such, they account for 40% of the global workforce.

Secondly, gender equality policies and regulations have made it easier for women to access work opportunities that were once the preserve of men. In the US, such regulations include the Equal Pay Act of 1963, Family and Medical Leave Act, Pregnancy Discrimination Act, Civil Rights Act of 1964: Title VII (Equal Employment Opportunities), Age Discrimination in Employment Act of 1967, and Civil Rights Act of 1991.

Thirdly, data published by the Harvard Business Review (HBR) shows that top business schools in the US including Stanford, Wharton, and UCLA at Berkeley have female student participation of 40% or more. At Rutgers University, 51% of MBA students who expect to graduate in 2016 are female.

Finally, women are closing the responsibility gap at the top. More data from the HBR shows that 71% of women in senior management positions at financial institutions are responsible for handling direct reports compared to 81% of men at the same level. Moreover, 45% of women have profit-and-loss reporting responsibilities compared to 58% of men.

In terms of job satisfaction, 49% of female executives (vs. 59% of men) say their work is meaningful. At the same time, 44% of high powered women (vs. 52% of male) say they are satisfied with their professional accomplishments. This is in addition to 41% of women in senior positions who say they are able to access opportunities for career growth and development compared to 50% of men.

The factors outlined above have made it possible for women to enter another male dominated niche in finance, trading. Surprisingly, the few bold women who have pursued trading careers have turned out to be better money managers than men, according to the results of a study carried out by Meredith Jones, a director at consulting firm Rothstein Kass.

There are several reasons why some women can become financial leaders even amongst the most successful male Forex traders. Firstly, Jones says women tend to think about money and the markets in a different way than men. The problem with men is their tendency to take riskier positions and execute more trades compared to women. This is largely due to high testosterone levels in men.

Furthermore, Jones reckons that men can become immune to some market signals that women would pay more attention to and not ignore. For these reasons, Jones advocates inclusion of more women in risk taking positions to damp down the irrational market exuberance fueled by male traders.

Another reason women make better money managers is their tendency to collaborate. Crystal Holt, an associate professor of leadership studies at University of Richmond says that few women in senior positions follow the hard-charging and authoritarian leadership style adopted by most men. This means they reach out to others and listen to advice from juniors and fellow seniors. As a result, they improve their chances of making the right decisions and succeeding.

It is also worth noting that a report published earlier in 2015 by The Bank of Montreal’s Wealth Institute says that US women now control more wealth than at any other time in history. By the end of 2014, women had decision-making power over $11.2 trillion worth of investable assets. Laura Pavlenko Lutton, director of manager research for equity strategies at Morningstar, says such women will expect and clamor for greater female representation in the trading industry.

Although women have traditionally played an inferior role to men in the finance industry, this is unlikely to remain the case for long. This is due to factors such as increased advocacy for gender equality, increasing number of women with the educational qualifications required to hold senior positions, and better money management skills compared to men.

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  1. Pingback: How A Divorce, A Death & Lack Of Education Made Me Realize The Value Of Financial Empowerment - GirlTalkHQ

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