Those were some of the takeaways from a Friday webinar sponsored by Democracy Investments, an ETF provider, that featured four prominent women in finance professionals: Katrina Dudley, Short Hills, N.J.-based senior vice president, investment strategist, portfolio manager at Franklin Templeton Investments; Katie Stockton, a Stamford, Conn.-based founder and managing partner of independent research provider Fairlead Strategies; Nancy Davis, founder of Quadratic Capital Management and portfolio manager of the Quadratic Interest Rate Volatility and Inflation Hedge ETF, based in Greenwich, Conn. and Julie Cane, Orinda. Calif.-based CEO and managing partner of Democracy Investments.
Ms. Dudley, who also authored the book "Undiversified: The Big Gender Short in Investment Management," pointed out that currently only about 10% of portfolio managers across the industry are women, and the numbers are even worse at the ownership level. While investment portfolios place a lot of emphasis on diversification, she quipped, asset management firms need to further diversify the teams that manage these portfolios.
Eventually, she said, a diverse investment team will generate higher returns as more and different ideas are introduced into the investment processes, leading to better decision-making.
Franklin Templeton had about $1.3 trillion in assets under management as of Sept. 30.
Female undergraduates will be more likely to pursue finance as a career if they can see women in top positions at financial services firms, Ms. Dudley said — or what she termed as "visible role models." That way, asset management and other firms will be better able to recruit and retain female employees and develop some to become future executives.
Ms. Dudley cited the "three P's" that are posing barriers to women rising in asset management firm: promotions, pay and performance ratings. She explained that women in asset management firms face promotion delays compared with male counterparts, which makes it harder to climb the corporate ladder. Women are also paid less than their male counterparts in similar jobs and with similar backgrounds. Finally, she noted that women often receive lower performance ratings in their reviews compared with male peers, even if their work performance was actually equal.
Ms. Stockton and Ms. Davis each cited the importance of mentors (both male and female) during the early days of their careers as a key ingredient in their future success.
Another barrier to the recruitment of more women into the asset management is linked to the "bad image" that the financial industry is bogged down by, much due to how the industry is portrayed in movies.
"Hollywood has not been good to Wall Street," Ms. Dudley said.
Indeed, characters like Gordon Gekko of "Wall Street'' and films like "The Big Short" present a negative view of finance professionals, which might discourage young women from even considering the field, she said.
As such, the industry needs to find ways to rehabilitate its image.
Hollywood has focused on some bad actors in finance and, given the film industry's huge reach, this negative image has been propagated among much of the public, Ms. Dudley said. As such, she suggests that Wall Street rehabilitate itself by improving its conduct and practices in order to upgrade its image, thereby potentially making it a more attractive career to more young people, including young women.
Ms. Dudley also cited a study which found that women will not work in a "bad industry" no matter how much they are paid, while men will.
However, Ms. Dudley asserted that she does not want the pendulum to swing too far the other way – that is, a portfolio management team that is 100% female would be as undesirable as an all-male team.
Ms. Cane, who served in the U.S. Navy (where she flew the Sikorsky SH-3 Sea King helicopter) said as she received excellent mentorship early in her career, she is committed to mentoring and sponsoring the younger generation of women in the industry.
Democracy has about $11.1 million in assets under management.
Finally, Ms. Davis suggested that young female college students need not major in finance nor business in order to pursue a career in asset management. "I'm a big believer in liberal arts education," she said, adding that successful asset managers can come from an array of educational backgrounds.
Quadratic has about $1.1 billion in assets under management.