Where Are the Women?

Publication date: 05/2017

Why the lack of gender diversity in finance leads to less revenue for the buy side.

Aggelos’ attempt to gather a panel of female capital markets practitioners to discuss why there are still so few women in high-profile positions in the industry did not go well. There exercise, he explains, left him with more questions than answers.

At a recent London fintech conference, five male panelists were discussing artificial intelligence and whether the automation of various processes had been overestimated by the financial services industry. When the Q&A session kicked off, a woman from a large investment bank stated her opinion in a combative tone, disagreeing with panel’s consensus on the topic.

I caught myself smiling condescendingly, focusing more on the way she articulated her argument, rather than the argument itself. As the debate between her and one of the panelists became heated, I realized two things: first, that her initial point was legitimate, and second, how gender-biased perceptions can be.


Women make up approximately 52 percent of the world’s population. Yet they account for barely 15 percent of people working in portfolio management globally as of 2015, according to the 2016 survey Women in Financial Services published by Oliver Wyman. Most of those surveyed said that despite institutional investors’ demands for more equal gender representation, most buy-side and sell-side firms remain closed to women due to their “alpha male” cultures.

But the problem lies not only in the numbers and the statistics, but also in women’s roles: Their presence in the financial markets is also defined by how much responsibility they carry in their firms. The reality is that the small number of female professionals in our industry tend to occupy the back seats.

Michael Lewis’ The Big Short gives a fairly apt representation of the situation: “The women who flooded into Wall Street firms weren’t typically permitted to take big financial risks. As a rule, they remained in the background, as ‘helpmates,’” he writes.

In Oliver Wyman’s survey, Lucy MacDonald, CIO of global equities at Allianz Global Investors, says the lack of female employees can be traced back to the unwelcoming nature of the business, rather than the pressures of the trading desk. “Work stress is not necessarily a barrier for women—they can deal with pressure, but may have a preference not to,” she says. “Overall, the more negative perception of the sector since the financial crisis appears to have impacted its attraction as a destination for women to a disproportionate extent.”

Losing Out?

With few women on their books, what is the effect on capital markets firms? I would argue that they stand to lose out on more effective, less risky investment strategies, and a thorough knowledge of the trading cycle. In short, they are losing out on revenues.

And here’s why: In March this year, the University of Leicester in the UK published a study, The Role of Hormones in the Financial Markets, which examines the role of gender in a trading environment.

The research found that women statistically get better results and produce better trading performance compared to their male counterparts, while they are less likely to cause a market crash, as they are more effective at evaluating risk.

According to the study, women also demonstrate a deep understanding of the trading workflow and can quickly spot patterns, which might affect their firm’s performance. And that is because females are generally more detail-oriented and willing to “do their homework” before engaging in any trading activity.

I spoke to the woman after the London conference and asked her how she felt about the audience’s reaction during the panel discussion. This time it was her chance to smile. “I was right in the end, wasn’t I?” she said.

It was then that I decided to try to pull together an all-female panel to get their thoughts on this issue. For almost a month, I have been contacting firms, looking for useful information, requesting to speak to female spokespeople. Initial confusion is followed by either amusement or excitement. Some asked whether I would also be willing to speak with a male representative. So far, my attempts to fill that panel have failed.