How and Why to Stop Harassment and Discrimination in Financial Services

Journal of Financial Planning: February 2020​

 

 

Sonya Dreizler, CFP^®, is founder of Solutions With Sonya. She is a speaker, author, consultant, and subject matter expert on impact investing, ESG, and SRI. She is a recipient of the InvestmentNews 40 Under 40 award and a 2018 Li​nkedIn Top Voices recipient.

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A year into my first job in financial services, I attended my first conference. I was excited to learn about the industry and network with other professionals. Imagine my naïve surprise when I was invited up to a fellow attendee’s hotel room, propositioned at a networking mixer, and invited to a strip club for a business meeting. 

More than a decade later, still working in financial services, then the CEO of an RIA and broker-dealer, I attended a conference for financial services executives. During a networking mixer, I was in conversation with an all-male group of attendees when one of the men made a joke about raping me. The other men in the circle either laughed or said nothing.

After so many years in the industry, I was no longer surprised at misogynist attitudes. Still, it was disappointing; even after making it to the executive level, sexual harassment was a normal part of my work experience as a woman in financial services.

Over the last few months of 2019, I chronicled real stories from real women¹ about their experiences with harassment, assault, and discrimination in financial services in a series titled “Do Better.”

Women often share these stories with each other, but because it’s dangerous to our careers to share them publicly, most men don’t know the prevalence of these behaviors in the industry. I invite you to read all their stories in the full series. This column will focus on how to take action to do better. I don’t pretend to have all of the answers, but here I offer solutions for both institutions and individuals to consider to help make financial services a more inclusive industry.

Issue No. 1: Conferences

When women in financial services shared their experiences of harassment, discrimination, and assault with me, I immediately noticed how many of the incidents took place at industry events and conferences. Unchecked bad behavior runs rampant at many financial services conferences. What can we do so that women can feel comfortable attending conferences, learning, networking, and growing professionally? 

Solutions to Consider

Systemic: Conference organizers have a responsibility to create and maintain a safe and welcoming environment for all participants. A code of conduct that attendees, sponsors, speakers, and staff must agree to—as well as reporting and enforcement mechanisms—are a good start. The Financial Planning Association does this well,² as does XY Planning Network,³ and several conferences have followed suit recently, including Morningstar. If you run a conference, consider adding a policy. If you attend conferences that don’t have one, ask conference organizers to add a policy.

Individual behavior: If you witness sexual harassment, assault, or any other type of degrading behavior, say something. Women may feel scared to speak up; doing so may put them in danger of being on the receiving end of additional bad behavior, so men have a particular responsibility in this area.

A phrase that works in many situations is, “Hey, we don’t do that here.” Follow up privately with the affected woman to see if she would like support, such as helping her to report the behavior. Respect the woman’s answer and do not push her to report if she does not want to.

Issue No. 2: Pay and Promotion Disparity

Despite advances in hiring and pay practices, women working in financial services in the U.S. are paid less on average⁴ than their male counterparts and are underrepresented⁵ at senior leadership and board levels. The statistics are even bleaker for women of color.⁶

Unfortunately, it’s hard for women to know exactly when discrimination is happening; the discrimination often happens behind closed doors in meetings to which we are not invited or present. Women often see the results but not the discrimination itself. We also may not know we’re being paid less because many private companies discourage (or even prohibit) compensation discussions among employees.⁷

Even though recent research⁸ found that the pay discrepancy in financial planning isn’t as grim as first thought, there is still work to be done. How can we make financial services a more equitable field for women? There are loads of resources on how to promote, retain, and pay women equitably at the company level.⁹ 

Solutions to Consider

Systemic: Working toward gender equity isn’t just the right thing to do, it pays well too. According to a recent McKinsey & Company study, “companies in the top-quartile for gender diversity on executive teams were 21 percent more likely to outperform on profitability and 27 percent more likely to have superior value creation.”10

Evaluate hiring, promotion, retention, and compensation policies, perhaps with help from a third party, to ensure the systems you have in place do not favor an existing overrepresented group at the expense of women and other underrepresented groups. Consider pay transparency, which recent research¹¹ shows reduces the gender pay gap. And while your company is working toward gender parity, ensure you are specifically including women of color in all your efforts.

Individual behavior: As an individual at any level of a financial services organization, you can start today by letting the women you work with know that you read this article, are aware of the issue, and are trying to learn and do better. Invite them to give you candid feedback if they want to; and if they choose to give you that feedback (now or later) listen to and learn from their insight, without being defensive. If they don’t give you feedback, don’t take it personally—they may not feel comfortable doing so or may not have feedback to share. If you are a man with a woman counterpart in a similar role, offer to chat about salaries to make sure she is earning the same as you are.

Issue No. 3: Other Biases Compound Effects of Gender Bias

Race, age, sexual orientation, citizenship status, and disability all factor into discrimination and harassment. Women in marginalized or underrepresented groups face a compounding factor; racism and other types of bias can exacerbate the negative effects of sexual harassment and discrimination. 

How can we make financial services an inclusive field for women of color, women immigrants, women who identify as LGBTQIA (lesbian, gay, bisexual, transgender, queer or questioning, intersex, asexual or allied), women with disabilities, and women from other underrepresented groups? This is a complex problem, and dismantling the problem involves both self-reflection and action on the part of leaders at all levels of an organization.

Solutions to Consider

Systemic: Consider engaging a professional company, such as Vaya Consulting (vayaconsulting.com), Future Work Design (futurework.design), or ReadySet (thereadyset.co) that specializes in helping organizations foster equitable workplaces. 

Individual behavior: Do a deep dive of learning, reading, and listening. The 2050 TrailBlazers podcast resource page (2050trailblazers.com/resources) has good guides. You can find additional learning resources on page 15 of a paper I co-authored, titled “Racial Disparities in SRI Funds” (solutionswithsonya.com/racial-disparities-in-sri-funds). Intentionally expand your network to hear perspectives of women from groups that are underrepresented in our industry (social media can be a useful tool to listen to or read perspectives you might not currently have in your work community).

Issue No. 4: Harassment in the Office

Harassment and discrimination are a regular part of work life for many women. Some of the incidents are obviously awful. Others may seem small, innocuous, or like just a joke. “Microaggression” is a term often met with derision by people who haven’t been on the receiving end of such comments.

These subtle acts of discrimination or harassment against underrepresented groups can make individuals feel unwelcome, less likely to contribute to a conversation, ask for support they need, take risks, or continue to work at an organization. A thriving business needs all employees to feel comfortable doing all of those things. One incident alone may seem like no big deal, but a week, year, or lifetime full of comments, jokes, and objectification adds up, and it’s exhausting. How do we create and change workplaces so that they are safer for women?

Solutions to Consider

Systemic: If you run a company that tolerates this type of behavior, you are allowing harassers and abusers to determine the culture of your firm, and you are most certainly losing top talent because of that. If you think this is happening at your firm, you likely need to solicit outside professional help to change the leadership and management culture. This may feel overwhelming, but it will be a long-term benefit to your business.

Individual behavior: First, the obvious. Don’t harass or assault women, even if you think it is “just a joke.” If you witness this type of behavior and you are a male peer or supervisor, talk to the person behaving this way. Recall that, “Hey, we don’t do that here,” is a good start. If you are not able to intervene in the moment, offer to help the woman document and/or report the behavior if she chooses to. If you are in a supervisory role, and someone reports this behavior, take it seriously and act on it. Listen to women. Believe them when they tell you their experiences.

Issue No. 5: When Reporting Doesn’t Help

Women who experience harassment, assault, and discrimination often don’t report the episodes for fear of retribution. Some women fear retaliation that could ruin their career or bring mental or physical harm to themselves and their families. Of the many incidents I personally experienced, I only reported one, because I feared reporting the others was not worth the risk to my career. This fear of reporting silences victims and allows a culture of harassment and assault to continue.

When women do report, their reports may be dismissed or brushed off. The one incident I reported was dismissed immediately (with no apparent repercussions for the harasser), and is among the stories in the “Do Better” series. HR and supervisors sometimes protect company revenues at the expense of the victims of harassment. We rarely see examples of this publicly, but recently news broke of an arbitration between Christine Carona and UBS; Carona accused UBS of gender discrimination and the public details¹² offer a rare glimpse into what retaliation can look like.

How can we better support our colleagues and employees when they are victims of harassment, assault, or discrimination?

Solutions to Consider

Systemic: Reconsider the notion that protecting harassers protects company revenue. Keeping a harassing employee on staff will cause your company to repeatedly lose female talent and introduce risk of litigation. (Also, creating safe and respectful workplaces is the right thing to do and shouldn’t require a business case.)

End the practices of forced arbitration, non-disclosure agreements, and non-disparagement agreements for sexual harassment, discrimination, and assault. Force the Issue (forcetheissue.org), is a project aimed at getting companies to end requiring arbitration for sexual harassment claims. It offers information, resources, and a database of large companies’ practices in these areas.

Individual behavior: Check your company’s employment agreements and ask management to consider ending forced arbitration for harassment, discrimination, and assault to facilitate a more equitable workplace. If you are a supervisor or manager and an employee reports harassment, assault, or discrimination to you, take the report seriously and act accordingly.

Issue No. 6: Women Leaving the Workforce

Each of the above issues, taken individually or in combination, can force women off their preferred career paths. Women may leave their jobs, change roles, and interrupt their careers—not because they want to, but because they feel they have to leave a bad situation. Our industry often wonders why so few women make it to the C-suite; women

opting out of abusive workplaces is an overlooked factor.

How do we support women to have fulfilling financial services careers with equal opportunities at every level of the business?

Solutions to Consider

Systemic: Large firms must have clear and accessible mechanisms to report harassment, discrimination, and assault. The reports must be taken seriously, irrespective of how much revenue the accused represents for the company.

For small firms with no formal HR, or where the owners are the ones harassing and discriminating, women don’t have much recourse except to sue (or go to arbitration if mandated) or leave. If treating women with respect because it’s the right thing to do isn’t enough incentive, consider the financial cost of litigation as well as those of employee turnover, and then treat all employees with professional respect.

FINRA should consider updating its regulations around disclosure of harassment. Currently, harassment arbitrations are not disclosed on BrokerCheck, so a broker who has been fired or allowed to resign from one firm, can go on to the next firm with no warning to the new firm.¹³ Although FINRA may not intentionally be protecting such brokers, the current system allows serial harassers to stay employed and is, what I consider, an impediment to women’s success in the field.

Individual behavior: Intentionally expand your network. Listen to more women. Ask a woman colleague about her experience and truly listen. Then ask how you can help, and actually follow through. This help may cost you time or money in the short term, but being a champion for women, and especially women of color, will pay dividends throughout your career.

Endnotes

1. ​See the author’s “Do Better” series at soluti​onswithsonya.com/do-better-series​.

2. See the Oct. 4, 2018 InvestmentNews article, “FPA Welcomes Conference Attendees with #MeToo Notice,” at investmentnews.com/article/20181004/FREE/181009959/fpa-welcomes-conference-attendees-with-metoo-notice.

3. See XYPN’s Code of Conduct at info.xyplanningnetwork.com/safety-and-security.

4. See statistics from the Bureau of Labor Statistics at bls.gov/cps/c​psaat39.htm.

5. See the May 21, 2019 report, “Women in Financial Services: Quick Take,” at catalyst.org/research/women-in-financial-services.

6. See the Aug. 6, 2018 Time article, “Despite Progress, Black Women Are Paid Only 62.5% of What Men Make. Here’s How to Fix That,” at time.com/5356660/black-women-equal-pay-day.

7. See the Dec. 20, 2017 report, “Private Sector Workers Lack Pay Transparency: Pay Secrecy May Reduce Women’s Bargaining Power and Contribute to Gender Wage Gap,” from the Institute for Women’s Policy Research at iwpr.org/publications/private-sector-pay-secrecy.

8. At the FPA Annual Conference in October 2019, Derek Tharp presented research he conducted with Meghaan Lurtz, Katherine Mielitz, Michael Kitces, and D. Allen Ammerman, that found the gender pay gap statistic in financial planning is not as bad as some studies have previously found. Tharp’s study found that the unadjusted gender pay gap was 19 percent, versus the more than 80 percent widely reported. See Walt Woerheide’s recap of the research in the Journal at OneFPA.org/journal/Pages/DEC19-From-Theory-to-Practice.aspx. See also the Journal’s 10 Questions interview with Meghaan Lurtz, where she talks more about this research at OneFPA.org/journal/Pages/November-2019-10-Questions.aspx.

9. See the January 2018 McKinsey & Company report, “Delivering through Diversity,” at mckinsey.com/~/media/mckinsey/business%20functions/organization/our%20insights/delivering%20through%20diversity/delivering-through-diversity_full-report.ashx. See “Suni Harford: The Key to Retaining Women in Finance,” from the CFA Institute’s Enterprising Investor at blogs.cfainstitute.org/investor/2017/11/08/suni-harford-the-key-to-retaining-women-in-finance. And see the Jan. 21, 2019 Harvard Business Review article, “Why Companies’ Attempts to Close the Gender Pay Gap Often Fail,” at hbr.org/2019/01/why-companies-attempts-to-close-the-gender-pay-gap-often-fail.

10. See endnote No. 9.

11. See the Aug. 14, 2018 Time article, “Should You Share Your Salary With Co-Workers? Here’s What Experts Say,” at time.com/5353848/salary-pay-transparency-work. See also the Dec. 5, 2018 press release, “Wage Transparency Works: Reduces Gender Pay Gap by 7 Percent,” from the Columbia Business School at www8.gsb.columbia.edu/newsroom/newsn/6692/wage-transparency-works-reduces-gender-pay-gap-by-7-percent.

12. For example, see the Oct. 28, 2019 ThinkAdvisor article, “UBS to Pay Ex-Broker $1.5M for Gender Discrimination,” at thinkadvisor.com/2019/10/28/ubs-to-pay-ex-advisor-1-5m-for-gender-discrimination/?slreturn=20191119131457. (This story was also covered by Bloomberg, Barron’s, InvestmentNews, and other media.)

13. For a detailed view into this practice, see the April 18, 2018 article in The Intercept, “FINRA’s Black Hole,” at theintercept.com/2018/04/18/in-30-years-only-17-women-won-sexual-harassment-claims-before-wall-streets-oversight-body​.