Imagine you’re at the office one day, just picking something up off the printer, when you catch a glimpse of a confidential document: a list of the salaries of everyone in your division. Unless your employer is unusually transparent (maybe you work for the federal government, or this place), you’re likely in for a few unpleasant surprises. (Wait–the coworker who rolls in an hour late every day makes $10,000 more than you?!)
As bad as that scenario is, now imagine finding out that you–and all your female coworkers–are paid less than every single one of your male peers. That happened to Beth, a senior executive at a big bank, who came across her workplace’s salary sheet by accident–and made an upsetting discovery. “I thought, ‘Holy criminy!’” Beth (not her real name) says. “All the men were making more than the women. I couldn’t believe it. But I guess you don’t know what you don’t know.”
Disturbing, yes. Unique, not so much. 24/7 Wall Street reports that of the five occupations with the largest gender wage gap, three are in finance:
- Women’s earnings as percent of men’s: 67.4%
- Women median weekly earnings: $1,127
- Men median weekly earnings: $1,671
Securities, commodities, and financial service sales agents
- Women’s earnings as percent of men’s: 65.1%
- Women median weekly earnings: $883
- Men median weekly earnings: $1,356
Personal financial advisers
- Women’s earnings as percent of men’s: 61.3%
- Women median weekly earnings: $1,004
- Men median weekly earnings: $1,637
At first glance, it’s startling that women in finance should be so adversely affected by the wage gap. Presumably, they’re more comfortable discussing compensation than most women–after all, talking about money is in their job description. Plus, women who enter this field tend to be driven, whip-smart and well-educated–all traits that should help them be better negotiators.
But none of that has been enough to help women surmount a variety of potent cultural and structural barriers. As a matter of fact, “the really high-flying occupations have some of the biggest wage gaps,” says Katherine Gallagher Robbins, director of research and policy analysis for the National Women’s Law Center. (For example, #2 on the list is physicians and surgeons, and #5 is business executives.)
So what’s keeping females in finance from achieving pay equity? Here are the key obstacles:
Just one-fourth of all certified financial planners are female–a number that has remained flat for more than 10 years, according to a 2014 study commissioned by the Certified Financial Planner Board of Standards (CFPBS). (No wonder the typical financial adviser demo has been called “old, male and pale.”) Generally speaking, women tend to suffer from the largest gender wage gaps in male-dominated jobs. It’s much harder for women to challenge or reform systems when there are fewer of them to begin with.
So many financial advisers are “about projecting bravado and machismo, and showing how great they are,” says Leisa Peterson, a certified financial planner and wealth coach who started her own financial consultancy. “They promise the moon! Clients are used to that way of being, so they will pick a man doing that than a woman being her true self.”
A cutthroat competitive atmosphere is also the norm, adds Peterson, a veteran of large financial-services institutions. And that isn’t always hospitable for women. “The perception is that when you are ruthless, you make money for your company. If you aren’t at the top of the [sales] list, you’re persona non grata.”
Most high net-worth clients are men–and women simply don’t have access to them. “Sometimes a client may choose someone who looks more like himself, in order to establish rapport,” notes Louise Roth, associate professor of sociology at the University of Arizona and author of Selling Women Short: Gender and Money on Wall Street. Implicit gender bias in the office can also play a role. “Someone who assigns [financial employees] to work on accounts may think a man would be more aggressive or a better fit with a client than a woman,” says Roth.
“Women are systematically steered away from the highest-profit clients,” says Ariane Hegewisch, study director at the Institute for Women’s Policy Research. “There is a lot of discrimination when it comes to getting access to the highest paid accounts. For example, when someone retires, all accounts should be split with everyone [in the firm], but usually some young white guy will get it.”
Typically, a large part of a financial planner or manager’s pay comes from commissions on sales. Since the clients of female financial planners tend to have lower net wealth on the whole, the planners take home a smaller cut. Additionally, because the pot of money is smaller to begin with, “it may look like the female planners aren’t performing as well [as the men],” says Hegewisch.
They are less likely to get promoted or obtain raises. That’s a result of the testosterone-heavy culture, and the lack of access to high-income clients. But it’s also because women are held to a higher standard on performance evaluations, says Roth. “When women are evaluated on subjective criteria, rather than explicit benchmarks, they don’t do as well,” she says. “For example, women tend to get comments like ‘her office is too messy’ or ‘she doesn’t have work-life balance.’ You can’t imagine men would get the same kind of comments.” Those types of skewed evaluations may be why women have a harder time ascending to leadership positions in the financial industry.
The irony of all this? The risk aversion and conservatism that may be keeping women advisers and managers from rapidly advancing in this macho world are exactly what makes them so good at their jobs. Females in finance tend to take a more holistic approach to a client’s money situation, says Peterson. That means asking about the big picture: What are her money fears? What are her goals? What life transitions is she struggling with? One survey found that 71% of female advisers worked with clients on issues outside of investing; only 48% of male advisers did the same.
Additionally, female advisers offer more consistent–and lower–prices than their male counterparts. As Peterson notes, “Women advisers do feel a bit more self-conscious about what they charge. They don’t want to ask for an amount that they themselves wouldn’t pay.” Sounds like just the sort of thoughtful and thrifty financial advice you’d want from the person managing your money.
This article originally appeared on Levo and is reprinted with permission.