*Note: The brokers and advisors in this story were interviewed about their experiences as women in the financial industry. This article does not constitute an endorsement of their advice, services, or businesses. Before hiring a broker or advisor, check the firm and the individual advisor/broker on BrokerCheck.
This is the final installment in a three-part series about women and investing.
Issues that affect women are in the spotlight these days. Beyoncé frequently flashes the word “feminism” in huge letters on her concert stage sets, Jennifer Lawrence recently wrote of her frustration at receiving lower pay than her male co-stars in the Oscar-nominated film “American Hustle,” and presidential candidates have discussed paid family leave on the campaign trail.
Yet in some industries, including financial services, women are still underrepresented. U.S. census data show that women account for just 32 percent of financial analysts, 31 percent of personal financial advisors, and 30 percent of securities, commodities and financial services sales agents in the United States.
For comparison’s sake, among other business and financial occupations, women make up 81 percent of corporate event planners, 72 percent of human resources officers, 64 percent of budget analysts, and 59 percent of accountants and auditors.
Women comprise one-third or less of the United States’ computer programmers, scientists and engineers of many varieties, and dentists. On the other hand, women form a decisive majority of the nation’s nurses, therapists of various varieties, teachers, social workers, and office administrative workers.
In other words: the financial services industry certainly isn’t the only industry with a gender imbalance.
Still, the numbers in finance are even worse at the top. Worldwide, women hold 19 percent of senior-level management positions in financial services firms and account for 2 percent of financial services CEOs, according to a 2010 study by the World Economic Forum.
Several women who run their own brokerage and investment firms say working in a male-dominated industry can be a tremendous challenge – but they’ve found it worth the effort.
Several female CEOs who spoke with The Alert Investor said that they have often felt they had to work harder than their male counterparts to get ahead.
“There’s still a perception out there that women don’t have the same amount of knowledge,” Carrie Coghill, founder, president and CEO of Pittsburgh-based Coghill Investment Strategies. “I think we as women work a lot harder because we’re confronted with that stereotype.”
Coghill says she combats the stereotype by constantly educating herself. At a conference in the late 1990s, she heard a speaker enthusiastically compare the Internet to the railroads in the 1800s – an emerging technology with seemingly limitless room for growth.
The speech left Coghill wondering what happened to the railroads. In the New York Public Library, she found a book from 1920 about the railroad bubble of the 1880s, when companies laid down new track at a furious pace and speculation in railroad stocks ran rampant. The bubble crashed in the 1890s, leaving a quarter of U.S. railroads bankrupt. Coghill realized that dot-coms were in for a rude awakening.
The pressure she felt to dig deeper paid off. Coghill and her business partner gained national attention when they were quoted talking about their trepidations about tech stocks in a USA Today story. The attention was a positive boost for her career, Coghill said.
But Kristi Wetherington, president and CEO of Capital Institutional Services Inc., said she grew tired of feeling she had to “be better just to be equal.”
About 15 years ago, she took an interest in policy issues that affected institutional brokerages and frequently attended meetings in Washington, D.C. and New York where most other women at the table were attorneys. She was often the only C-suite level woman in the room.
Wetherington wore a uniform of navy blue and black suits, fearing she wouldn’t be taken seriously otherwise. But one day, she realized the pressure she was putting on herself to prove her worth was taking a psychological toll – she simply never felt secure that she had done a good job. She decided to ditch both the suits and the fear of not being good enough.
“I was in a hotel one night in downtown Manhattan after a series of meetings, and I remember thinking to myself – ‘Why are you beating yourself up?’” she said. “’Why are you doing this to yourself when you did a good job?’”
Census data show that women who act as securities, commodities, and financial services sales agents – the job description one academic used as the closest proxy for brokers in a widely cited 2012 study – earn a median income of $51,284. Their male counterparts earned close to double that amount: $93,795.
The reason for the disparity isn’t immediately obvious, since many brokers work on commission. The 2012 study, which used wage data from a class-action lawsuit that female stockbrokers filed against two large brokerage firms in the 1990s, showed that women were more likely to be given accounts with lower asset values and historical return profiles.
Mary Ramsey King, who founded M. Ramsey King Securities in 1991, knows a thing or two about pay disparities. She started her finance career in earnest in 1969 as an order clerk at the Midwest Stock Exchange, now the Chicago Stock Exchange.
She later became the first female sales trader and registered broker at Blythe Eastman Dillon in 1970. During various stints in the 1970s, she was one of only two female registered brokers on the institutional trading desks of Smith Barney, Bear Stearns and Weeden & Co. Early in her career, King said she discovered that one of her male colleagues earned more money than she for the same work.
“I remember being vocal about it, but probably not vocal enough,” she said. “The mentality back then was, ‘Wow, I’m so glad I’m even making this!’”
Sometimes, however, being a woman in the financial services industry brings unique opportunities.
After working in New York for three years, King decided to take a few years off in the late 1980s to raise her children. It wasn’t long before she got a call from a former institutional client, directing her attention to an ad in a trade publication seeking brokerage firms run by women and minorities.
Many states, municipalities, and federal agencies either require or encourage public pension funds and treasuries to facilitate trades through brokerage firms owned by women, minorities, and people with disabilities. Several of King’s former institutional clients urged her to hang out her shingle, and eventually, she did.
For her part, Coghill said she believes media organizations such as the Wall Street Journal and CNBC have sought her out partly because they were “sick of men in suits.”
None of the three CEOs would have predicted their own career paths.
King wasn’t planning a career in finance when she found an entry-level position as a clerk-typist at a firm trading corporate bonds in 1968. Wetherington was saving up for a graduate degree in psychology when she took a job in client support at a retail brokerage firm. Coghill dreamed of being an accountant as a child, and began working as an administrative assistant at a brokerage firm to help pay for college.
All three said they fell in love with the excitement and intellectual challenges they encountered.
While they agree that the financial services industry still has work to do when it comes to supporting and welcoming women, they also say they received support and encouragement as they rose through the ranks. Both Coghill and Wetherington said their most important mentors have been men, and King praised former Bear Stearns CEO Alan Greenberg for paying women fairly when she worked for the firm in the 1970s.
“The diversity issue is not about women taking over the conversation – it’s about women having a voice in the conversation,” Coghill said.