Ellevest CEO Sallie Krawcheck is speaking out about what can be done for the financial services business to improve not only its “conference culture” but also its hiring and promotion of women.
Referring to Fisher’s analogy “that winning asset management business is akin to ‘getting in a girl’s pants,” Krawcheck says in the blog post, “[n]ot even a woman’s. A girl’s. Ick.”
The former head of wealth management at Bank of America and Citigroup added: “This is one creepy man. A creepy man whose company has been entrusted with $112 billion in client assets, for public pensions and individuals.”
While some media has emphasized “conference culture” in its coverage and the need to change it, so women “feel welcome,” she said, the issue at stake is “bigger than that: It’s about women feeling — and being — welcome not just at financial services conferences, but in the financial services industry itself.”
Krawcheck continues: “Who thinks Ken Fisher’s disrespect for women stops when he walks off stage and into his company’s headquarters? No one.”
In fact, Fisher Investments — which has seen some $3 billion in redemptions since Fisher made the remarks at a closed conference session on Oct. 9 — has an all-male senior investment team, Krawcheck points out. His executive team includes seven men and four women.
Women make up some 10% of fund managers working with just 2% of assets, and diversity in financial services seems to be getting worse — namely at the senior-management level.
In a 2015 interview with ThinkAdvisor, Krawcheck explained that after the financial crisis, “what I saw happening was a lot of ‘Geez, we should have that guy in that job because we can’t afford to take on any risk.’ We all tend to view people who are different from us as being riskier.”
In a blog post published Monday, advisor consultant Sonya Dreizler shared the stories of women in finance who have faced discrimination at work. An earlier post detailed sexual assaults at industry events.
Krawcheck said in her blog post that the industry “has been almost completely silent during the #MeToo crisis.”
She continued: “But it’s even bigger than that. Because who thinks the Ken Fishers of the world suddenly stop disrespecting women when they start making their investment and business decisions?”
Her answer: “The ripple effect of executives’ decisions can be enormous, because the financial services industry serves as the lifeblood of our economy.”
The financial services business allocates capital in ways that result in some entities with wins and others with losses — and “women have, on average, [have] lost,” according to Krawcheck, who points to the higher rates they pay for mortgage loans, for instance.
With the percentage of female advisors “stuck” at about 15% and an array of related issues, the Ellevest co-founder asks: “Who is tired of all of this state of affairs? We all should be.”
What to Do
The path forward can include, for instance, divesting funds from firms “that do not support women and put it in those that do.”
Krawcheck says asking these four questions of a financial company is crucial:
1. Does the firm require employees to agree to mandatory arbitration for sexual harassment claims?
Forcing women into arbitration is “why sexual harassment in the industry continues,” she says, and why “so many who receive settlements are forced to sign confidentiality agreements.
2. Do you “go beyond platitudes” and have an equal number of women and men in senior leadership and in profit-and-loss roles?
Krawcheck suggests finding out what percentage of a senior leadership team are female, for example, and what percentage of client-facing staff and employees with p&l responsibilities are.
“Anything below 50% women is too low,” she said.
3. What is the firm’s gender and ethnic pay gap?
“Anything less than full equality here is unacceptable, because it is straightforward to measure and to fix,” the Ellevate leader said.
4. Does the firm invest with “an eye to gender”?
If not, “then industry statistics show that they overwhelmingly invest in men,” according to Krawcheck.
She adds that Fisher’s response to the backlash against him and Fisher Investments “has followed a sadly predictable route of first pushback, then a standard apology and promise to do better, then the establishment of a ‘diversity task force.’”
She says more and more people don’t want to do business with people and firms that “make us squirm in embarrassment at a conference. And none of us should allow our money to be managed at a company at which we wouldn’t let our daughters work.”
Speaking to Fisher Investments’ clients, Krawcheck stated: “The next move is yours. Will you follow the institutional investors — Michigan, Boston, Philadelphia, Oakland — who have begun to pull their assets? Customers of the financial services industry: Let’s do this thing.”
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