Why are most CFAs men?

More firms are aiming to improve gender diversity because research shows that doing so improves the bottom line.

Read: Germany approves equal pay law for men and women

But there’s a long way to go, reveals a research report by the CFA Institute, the global association of investment management professionals.

For instance, fewer than one in five CFA members are women (about 20% in Canada and 18% globally), despite women representing 57% of college graduates. This compares poorly to female CPAs (50%), medical students (48%) and law students (47%).

While the report provides no definitive answers, it offers several insights.

For example, more women than men members have spouses with full-time careers (79% versus 51%), possibly suggesting more female members are also responsible for domestic duties. Indeed, of members with dependents, nearly two-thirds of women are the primary caregivers versus about one-fifth of men.

Other report highlights:

• Women represent only 1 in 10 people in key leadership positions (CEO, CIO or CFO).
• CFA members usually make the decision to pursue a finance career in their early twenties, so all influences up until then could be contributing factors to women’s under-representation in finance. This includes the gender gap in math, which correlates with measures of gender inequality.
• There’s no significant gender gap when it comes to CFA members and happiness levels.
• Both male and female CFA members (66% and 63%, respectively) report that taking time off work is “not at all hard or not too hard.”
• Most female CFA members (70%) and almost half of all CFA members (48%) believe mixed-gender teams of investment professionals lead to better investment performance results because of more diverse viewpoints.

On this last point, the report says, “This difference is in­teresting since it is more likely that the women respondents have been in gender diverse groups and have witnessed the benefits first-hand.”

In contrast, clients are more likely to say gender diversity doesn’t matter (46% of retail investors and 45% of institutional investors).

The report notes, however, that there’s a vocal minority in this group — notably among institutional investors, who have started asking money managers to disclose their gender diversity.

Read: Ontario sets target date to appoint more women to boards

Ideas for positive change

The report’s conclusions:

• Math and technical skills must be built early.
• The flexibility offered in the field of finance should be communicated to potential CFA candidates.
• Firms should be made aware of the importance of flexibility in attracting a gender-diverse workforce.

Also, more research is needed to explore how diversity — of all kinds — contributes positively to investment decisions. Further, because behavioural finance has shown bias hampers performance, bias in the workplace needs to be examined.

“Effective understanding of workforce makeup and motivations are critical con­tributors to the collaborative cultures we need in the investment industry,” concludes the report.

The survey was conducted in May 2016, with more than 4,000 male members and more than 1,000 female members responding, and is expected to generate more research. Read the full report here.

Also read: ASC to adopt disclosure for the representation of women on boards