A new report has painted a rather disappointing picture of the state of gender diversity in Australia’s financial services sector and raises questions on whether it could be holding women’s money back?
According to global research by Morningstar the percentage of women working as fund managers in Australia sits in the range between 11 per cent to 14 per cent, which is much better than the United States but significantly worse than financial hub Singapore.
The data also suggests that there are biases that prevent professional women from being more successful in Australia because its financial services sector is more established and men have long dominated leadership positions.
“Women are underrepresented in mutual funds’ leadership ranks globally, with larger markets farther behind smaller markets,” said Laura Pavlenko Lutton, Morningstar’s director of manager research in North America.
The lack of female fund managers is a challenge for some companies as they try to diversify their workforce. At the same time, attract a great number of women, who are generally more reluctant to seek professional investment help from the male-dominated industry.
The company’s second research report about fund managers and gender considered more than 26,000 fund managers, comparing the man-to-woman ratio of fund managers to other professions that require similar education, including doctors and lawyers, by country.
Overall the global study found that one in five funds has a female portfolio manager, and in the study’s eight-year timeframe, that ratio has not improved.
Olivia Engel is one of Australia’s most talented fund managers and earlier this year was recognized as a star recipient of head of the State Street team that won the Morningstar’s award for best Australian large cap fund.
Engel is one of very few women leading quantitative funds in Australia, but she says that’s actually a good thing.
“In some ways being a woman is better because you get noticed more, it’s kind of like there’s a woman here – wow!” says Engel
Engel is humble about her achievements but she’s also worked hard to learn from the men around her to be openly proud of them as well.
“I think it is easier for some men, more than women, who are more willing to speak about their own achievements than women.
“It’s not that I tell everyone how good I am its just that I feel more comfortable now stating things rather than feeling shy about it.
“I think that’s important for all women to know how to be more confident.”
The Morningstar report also identifies areas of the industry where women have been making relative gains.
“We did find areas where women are finding more opportunity, specifically among passive funds, funds of funds, and team-managed funds,” says Ms Lutton.
Larger equity firms are also more likely to promote women to funds management roles than smaller firms.
In France, Hong Kong, Israel, Singapore, and Spain, at least 20 per cent of fund managers are women.
Singapore is the global leader among 56 countries with women representing 30 per cent of total fund managers and 29 per cent of Chartered Financial Analysts.
Large financial centres, such as Brazil, India, Germany, and the United States are behind the global average of 12.9 per cent women fund managers. In India, only 7 per cent of fund managers are women.
In some asset classes, women fund managers are more credentialed than men. A woman fund manager is approximately 7 per cent and 4 per cent more likely than a male peer to have her CFA designation among equity and fixed income funds, respectively.
Women have better odds of running funds in areas of industry growth such as passive, funds of funds, and team-managed funds; women are 19 per cent more likely to manage on a team than men.
In addition, it appears difficult for women to achieve management roles in more established parts of the fund industry, including actively managed funds and solo-managed funds.
In fact, women are 36 per cent less likely to manage an active equity fund than men.
The industry’s largest equity firms are more likely to name women as fund managers than smaller firms.
Among funds at one of the top 10 largest firms by global equity assets under management, there are 83 per cent higher odds that a woman would be named a fund manager.