How Women Are Creating Success in Financial Services – Business Advice and Resources

How Women Are Creating Success in Financial Services

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When she wanted to start Ellevest, a digital investment platform for women, Sallie Krawcheck approached several large banks for funding. She presented the concept, demonstrated the need and how large the market was, but nobody got it. After one such meeting, the CEO of the bank looked at her and said, "Well, don't their husbands manage their money for them?"In one comment, he encapsulated much of what is behind the lack of gender diversity in the financial industry. Women face stereotypes, doubt and biases from both within and outside the industry. But despite these psychological and financial hurdles, women are creating success in the financial industry. And they're teaching other women how to do it, too.Women Face Higher Hurdles Into the Industry When Catherine Berman and Yuliya Tarasava had the idea for CNote, an investment platform that uses technology to help people invest in a more inclusive economy, they entered in the 2017 SXSW Super Accelerator Pitch Competition. From hundreds of thousands of applicants, the judges whittled it down to 10 finalists. Standing alongside the other finalists onstage, Berman realized something: "Out of a global competition of fintech founders, we were the only women. Every other founding team was 100% male."CNote beat the boys to win the 2017 Best Startup Pitch Company award, but too often women in finance find themselves climbing an uphill battle to success. Women represent less than one-third of financial advisors and less than 20% of leadership roles in financial services firms globally. Women-owned businesses receive only 2% of venture capital in the U.S. The Ripple Effect of More Women in FinanceAs the gatekeeper to wealth, the financial industry is in a unique position to improve diversity by supporting women inside the industry and investing in women-owned businesses outside of it. Such efforts can have a wide-reaching impact."I've found again and again (that) when you support a woman entrepreneur, the effect of that goes far beyond just supporting her and her family," Berman says. "She ends up producing a series of positive network effects that also benefit the community, the local economy and the entrepreneur ecosystem."Berman and Tarasva are is proof of this: Since founding CNote they created The Wisdom Fund, a fixed-income vehicle that enables individual and institutional investors to invest their dollars in women-owned businesses. Likewise with Krawcheck and Ellevest, which is tackling not only gender diversity within the company but also the global gender wealth gap.Women have long been criticized for keeping more of their money in cash than men, thus missing out on investing returns, but "that research doesn't hold up," Krawcheck says.It's not a coincidence that an industry with fewer women does a poor job for women, Krawcheck says. She poses the question: Do you really think if instead of being 95% men, the industry had been 90% women, there'd be a CNBC?"CNBC was fashioned off of ESPN, (turning) investing into a sport," she says. "So the ripple effect here is tremendously important for our society."The Knight Foundation commissioned Harvard University and Bella Research Group to look into the diversity of the asset management industry. They found that women mutual fund managers represent less than 10% of the industry and manage less than 1% of total industry assets under management (AUM)."If we do the math, that means men are choosing the companies for 98% of our economy and look where we are," says Kristin Hull, founder, CEO and CIO of Nia Impact Capital. "The mess we're in was literally man-made, and until we can shift that lens to bring in more diversity, we're not going to get out of the problems we're in."How to Bring More Women Into the Financial IndustryImproving greater gender diversity in the asset management space isn't hard: It starts with choosing female-managed funds and investments that support women. To improve gender diversity in the financial industry more broadly, society needs to change the way it thinks. People have been socialized to view white men as leaders and everyone else as not, Krawcheck says. For gender equality to happen, inclinations to homogeneity need to change, she adds."There's an overwhelming draw to familiarity, to working with people like yourself," Krawcheck says. "Even people who are benefiting from the change can fight it because the drive to status quo is so powerful."She puts the onus for change on CEOs. If a CEO isn't committed to diversity, diversity won't happen. To that end, Krawcheck calls a full-stop on hiring if Ellevest becomes too homogeneous. They won't hire until they find someone who brings a different perspective and background. And before you ask: Yes, she upholds this policy even if the company becomes female-dominated.Hull takes a similarly firm view of diversity at Nia Impact Capital. The company is the first U.S. firm to be Gender Equity Now (GEN) Certified, which recognizes businesses that meet a standard of excellence across five areas of workplace culture including the gender perception gap, a certification Hull recommends all companies undertake."Even if you don't get full certification, you learn so many things that can improve your company practices," she says.But even the most committed CEOs can't hire people who don't apply. "Men are quicker to throw in their resumes than women are," Hull says. "Women are much more likely to apply when the hiring process is transparent."To encourage female applicants, companies should improve transparency, she says. Make the salary window available, let people know how many other applicants there are and, "of course, have women on hiring committees."Not only do women hire more women, but having a female role model when interviewing can be invaluable to women applicants.When Chrissy Lee, co-president and COO of Kalos Financial, interviewed for an operations position at Kalos 13 years ago, one of the first people she met was the company's co-founder and then-COO Carol Wildermuth."She blew me away," Lee says. "She presented herself with such confidence… Even in the interview, she was so open to sharing her background, her challenges, what she had to go through."Lee walked out of that interview thinking, "I want her job."As co-president and COO today, Lee is constantly trying to lift other women up in the field. "If I'm winning at something, I want other people to have that experience as well," she says.How to Be a Successful Woman in FinanceWomen must help other women rise, but you can't lift someone who isn't reaching up. If Lee had never applied to Kalos, if Krawcheck had never set her mind on creating Ellevest or Burman on CNote or Hull Nia Impact Capital, they never would have become the beacons of female success in the financial industry that they are today."It's not easy as women to be in this space right now," Berman says. "But the challenges can spark new thinking – and it's a battle worth fighting."Women shouldn't see the lack of diversity in the financial industry as a deterrent, but rather as an opportunity to pave the way for a better future for everyone.

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