Why we need more women in finance
March is National Women’s Month. There are many reasons why we celebrate National Women’s month. Being a woman working in the finance industry, the most important reason why I think we should celebrate National Women’s month is to highlight the reasons why financial institutions in the Philippines need to hire more women. Last Monday, CFA (Chartered Financial Analyst) Philippines invited Sarah Maynard, CFA Institute’s global head of External Inclusion & Diversity, to discuss the reasons why companies in the finance industry should hire more women.
One of the most compelling reasons is the growing number of wealthy women. According to a BCG (Boston Consulting Group) study titled “Managing the Next Decade of Women’s Wealth,” women control 32 percent of the world’s wealth and are adding $5 trillion to the wealth pool globally every year. From 2016 to 2019, women accumulated wealth at a compound annual growth rate of 6.1 percent, and the pace is expected to accelerate to 7.2 percent over the next four years. Because of this, financial institutions who better understand the needs of women will have an advantage in gaining the business of this growing segment of the market. Wealthy women
Another reason is the potential of women to generate better investment performance. According to a study by KPMG (Klynveld Peat Marwick Goerdeler) titled “Breaking Away: The Path Forward for Women in Alternatives,” from 2007 to 2015, hedge funds run by female fund managers generated a higher return compared to the average return of hedge funds across all strategies. Although more studies over longer periods of time need to be done to support these findings, the potential of women to outperform men is a compelling reason why asset management companies should not discriminate between men and women when hiring analysts and fund managers. The good news is gender inequality is not a big problem in the Philippines. According to a survey conducted by global consultancy firm Grant Thornton, 48 percent of senior leadership positions in mid-market businesses in the Philippines are now held by women. This is the highest proportion among the 29 large economies that are part of the survey. Meanwhile, more than 30 percent of CFA Institute’s members from the Philippines are women, which is the third highest among 57 countries that are part of its “Gender Diversity in Investment Management” study.
More support needed
Despite the Philippines’ favorable position, several things can still be done to encourage more women to pursue careers in finance. One suggestion is to increase women’s awareness of different jobs in finance. While men are naturally more attracted to finance jobs, it does not mean that women are not at all interested and cannot excel in the field. Another suggestion is to highlight successful women who work in the industry. These women can act as role models and mentors, encouraging younger women to pursue careers in finance. Employers can also help women succeed by giving them equal opportunity in terms of training and promotion, allowing them to become better in what they do. Employers can also provide women with more flexible working hours so that they can continue to work despite growing responsibilities at home. INQ
