They may be few now, but finance is about to see more female money managers.
Trends are changing as more women control wealth and want a part of the money management world, reports the Wall Street Journal. Women control 39% of wealth in the U.S., or $11.2 trillion. They’re earning more than they did in past years, and female baby boomers are outliving their male partners and taking control of the family assets. Writes the Journal:
“As women control more wealth, it is reasonable to expect to see more women among the fund managers investing those savings,” says Laura Pavlenko Lutton, director of manager research for equity strategies at Morningstar.
Of the 7,410 open-end mutual fund portfolio managers, less than 10% are women, Morningstar reported in March. Most of the women running the money are part of mixed-gender teams.
The lack of women in finance is a Catch-22. Women don’t want to enter a field that lacks female role models and has a reputation for treating women poorly, says Sallie Krawcheck, the former Bank of America Corp. and Citigroup Inc. senior executive. But without more women, it’s hard for that to change.
Part of the problem is the lack of women seeking the credentials fund firms wants, says Lutton. In the 2013-14 academic year, only 37% of the MBA degrees earned at the 307 surveyed schools went to women. Only 16% of the CFA Institute members in 2014 were women.
Krawcheck and Lutton are optimistic that tides are changing, and women are joining the industry more.
Investors would benefit from women in finance, says Lutton. Men are known to trade more, can be overconfident investors, and follow the pack, which can accrue greater fees for lower returns. Writes the Journal:
Thyra Zerhusen, founder of Fairpointe Capital, says it is in everyone’s interest to promote women, noting that she brings something to the table that her younger male peers often don’t: She is more focused on what can go wrong.
Photo: e3Learning via Flickr.