Research shows that women are underrepresented at every level of the financial profession, which is likely leading to one of the highest gender pay gaps compared to other industries.
According to a recent study from Glassdoor, the insurance and finance industries have two of the highest gender pay gaps after accounting for factors such as age, education, experience, location, occupation, job title and company. Within the insurance industry, the gender pay gap for women in the United States is 7.2%—the second highest gap. And within the finance industry, the gender pay gap for women is 6.4%—the seventh highest gap.
Another report from 24/7 Wall St. that’s based on the U.S. Bureau of Labor Statistics’ release of earnings data from the Current Population Survey for 2014 finds that of the five occupations with the largest gender wage gap, three are in finance: financial managers; securities, commodities, and financial service sales agents; and personal financial advisors.
For financial managers, women’s earnings as a percentage of men’s is 67.4%. For sales agents, women earn 65.1% as a percentage of men’s earnings. Meanwhile, personal financial advisors that are women earn 61.3% that of men in the same occupation.
“We definitely have a pay gap within the industry,” Leah Bennett, cofounder of the CFA Institute’s Women in Investment Management Initiative and vice president of Westwood Trust, told ThinkAdvisor.
Bennett believes part of the reason the pay gap continues to exist in the financial services field is the lack of women in the field overall and the lack of women in executive positions.
Bennett, while she considers herself “very fortunate” to not have experienced pay inequity, decided to start the CFA Institute’s women’s initiative with Margaret Franklin, president of BNY Mellon Wealth Management Canada, because they noticed a gender diversity problem in the industry.
“As our careers have progressed, we see less and less women around us,” Bennett told ThinkAdvisor.
Bennett, as well as a slew of research, makes the case that there is a link between pay equity and greater gender diversity.
In fact, the Institute for Women’s Policy Research finds that “occupational segregation” is a primary contributor to the lack of significant progress in closing the wage gap.
“Women have made tremendous strides during the last few decades by moving into jobs and occupations previously done almost exclusively by men, yet during the last decade there has been very little further progress in the gender integration of work,” according to IWPR.
According to a CFA Institute report released recently, women are underrepresented at every level of the financial profession.