Asset management lags other financial services industries when it comes to the representation of women across most levels, new research by McKinsey reveals.
According to McKinsey’s analysis of 71 North American financial services employers (including 27 asset management and 25 banking and consumer-finance companies), which participated in its 2021 Women in the Workplace report, asset management lags banking, insurance and payments in the representation of women in vice president, senior vice president and C-Suite roles.
Of most concern, it said, was the representation of women of colour in asset management, which it said had not “meaningfully changed since 2018—and had actually gone down at critical levels of the pipeline. For example, the share of women of colour in entry-level roles has decreased slightly in the past three years.”
In the banking sector, McKinsey said its findings reflected the reality for financial services overall, with an even split between men and women at entry level, and then women falling through the cracks at every rung up the ladder.
Women make up 53% of the entry-level banking workforce but less than one-third at the SVP and C-suite levels. Notably, nearly one in four employees at the entry level in banking is a woman of colour, but this fell to one in 20 at the C-suite level—which was on a par with both the financial-services and cross-industry average.
That is not to say that no progress has been made at all. At the start of 2021, women and women of colour in the financial-services workforce in general increased across all ranks above entry level, compared with 2018. Women now make up 52% of the total financial services industry workforce, according to McKinsey’s findings. Compared to 2018, the share of women at senior-vice-president (SVP) level has also grown 40% and 50% at the C-suite level, but this is off a low starting point.
Despite these gains, 64% of financial-services C-suite executives are still white men, and 23% are white women, according to McKinsey’s report, leaving just 9% of C-suite positions held by men of colour and 4% percent by women of colour.
At every step of the corporate ladder, women’s representation compared to men’s falls off dramatically. This trend is even more pronounced for women of colour, whose representation fell by 80% from entry level to the C-suite. “When women are not getting promoted at the junior levels of the pipeline, it is challenging to equalise gender diversity at more senior levels—the gap is simply too large to catch up,” said McKinsey.
However, McKinsey’s study found that women leaders in financial services felt more of a responsibility than their male counterparts to promote Diversity, Equity and Inclusion in the workplace. Women also did more to support their teams, especially in manager and entry-level positions, and 80% of women in financial services reported consistently providing emotional support for a team member in the past 12 months, compared to 72% of men.
“As financial-services firms plan for a return to the office, they need to do more to create an equal and inclusive workplace where all women of all backgrounds feel supported, valued, and recognised for the full extent of their contributions,” McKinsey stated.