Advancing Gender Equity in Financial Service Institutions

Attaining leadership positions is seldom a smooth and easy process—for anyone. But for women in financial service institutions (FSIs), the pursuit is often more exacting than it should be. Despite a great deal of public interest in advancing representation and having more female executives in FSIs, the highest levels of corporate leadership are still dominated by men.

Globally, women held only 21% of board seats, 19% of C-Suite roles, and 5% of CEO positions in June of 2021. While the number of women in senior positions has risen steadily in recent years, women remain dramatically underrepresented. Significant progress is required if we hope to pave the way for a more equal and inclusive workplace.

Setting a goal to that end, 100 Women in Finance, a nonprofit global network with programs aimed at building a financial services industry that is more diverse and gender equitable, developed the 30/40 vision with the aim of women occupying 30% of senior investment roles and executive committee positions by 2040. This goal will only be achieved through the dedicated efforts of individuals and tactical and sustained initiatives on the part of financial services institutions. Both are needed, but the strategies that FSIs implement to increase the number of women in leadership positions will be the ultimate drivers of change. New initiatives and strategies such as quotas, sponsorship, mentorship, and allyship programs are a large part of the discussion regarding increasing diversity.

As FSIs are increasingly looking for ways to encourage, develop, retain, and attract female leaders, Shelli Herman and Associates, Inc. spent some time with three trailblazing female leaders in financial services to gain their insights on what organizations should prioritize in order to increase representation. While there's no "one-size-fits-all" path to achieving greater gender equity across the talent pipeline, organizations would be well served to take note of the following priorities outlined by Margaret Thomsen with Nuveen, Heidi Horwitz-Marcus with the Capital Group, and Marlene Alexander with Voya—women in positions of leadership at FSIs that are reimagining work environments and cultures to be more inclusive, equitable, and empowering.

Acknowledge the Disparity & Expand the Talent Pool

Margaret Thomsen, Managing Director, Head of ETF, 529, and TIAA Distribution, Nuveen

While women have a slight edge competing for entry-level positions (they comprise 52% of the industry workforce), their representation falls off at every subsequent stage of the corporate promotions pipeline. A 2021 study by Mckinsey and Company found that only 86 women are promoted to manager for every 100 men. Achieving gender diversity will first require FSIs to address the unequal promotion rates from entry-level to manager.

Margaret Thomsen, Head of Specialist Distribution, ETFs and 529, and TIAA Distribution at Nuveen believes we must first acknowledge that there is a disparity, then measure and educate around it. "Most organizations understand that there is a lack of gender equality, especially those who have taken the introspective step to quantify their internal discrepancies that allows you to measure change," she added, "Internally at Nuveen, there is an encouragement for diverse candidate pools when hiring for a position. As a hiring manager, I can say I have never been asked to fill a quota, but I am encouraged to have a diverse candidate pool to interview. I think this is a progressive tactic for gender equality because it broadens the search and can uncover unlikely candidates who either don't self-select or are unaware of the role.”

Thomsen notes that expanding the talent pool is especially important in entry-level positions, as it creates a more diverse talent pipeline for future promotions. Additional initiatives like sponsorship, mentorship, and allyship programs can also help to unlock employees' potential. "After spending six years at two firms essentially doing the same entry-level role, my first major leap was due to my boss's boss calling me up and saying, 'There is a role open, and I think you would be great at it.' That call was life-changing for me. I didn't know the role was open, I would have never considered it because I didn't know it aligned with my skill set, and I wouldn't have applied because I felt it was too big of a stretch for me."

As for diversifying leadership roles, Thomsen shared that Nuveen has begun a project sponsored by the Head of the Global Client Group to increase gender equity at the Managing Director level. While the program is still in the beginning stages, the task force of female Managing Directors has already begun brainstorming challenges and identifying asks and areas of improvement in representation.

Considering the success of the Women on Boards campaign in the U.S. and the growth of the female director talent pool, Nuveen also implemented a policy for Board quality specific to diversity that includes an expectation that the Board has at least one female director globally and at least two female directors state-side.

In addition to implementing internal task forces and policies, Nuveen engages externally with companies in the U.S. and globally. Margaret noted, "Externally, our efforts are reflected through engagement and proxy voting. One example of engagement is sending letters to companies in the U.S. and Japan with low gender diversity on their Boards."

"All of these initiatives have helped me increase my confidence, realize my capabilities, and encouraged me to go further—ultimately leading me to my current role. Frankly, I would not be in my position without these guides because I would have given up on myself."

Outside of the organization, Thomsen strives to inspire younger women looking to make a career in financial services. "I think about what has served me—mentors, sponsors, education/resource groups—and I strive to share what I've learned with others. Whether it is mentoring college students or simply sharing my career path with someone seeking guidance, I believe being visible and thoughtful in one's day-to-day is essential to advancing representation outside of the organization."

Allyship & Rebranding

Heidi Horwitz-Marcus AIFA®, AIF®, PPC®, Financial Conglomerate National Sales Director, Capital Group

Heidi Horwitz-Marcus AIFA, AIF, PPC, Financial Conglomerate National Sales Director at Capital Group, shared that Capital is showing its commitment in several ways. "Recently, my direct manager and male members of my team voluntarily participated in a global allyship event throughout Capital centered around this topic. An event like this happening on such a broad scale with senior leaders is a huge step. It's remarkable when you think about it."

Capital Group has made significant gains in diversifying its talent in Horwitz-Marcus' 17-year career at the organization, and allyship seems to be a recurring theme in DEI initiatives. Last month, Capital Group held its 5th Annual Diversity, Equity, and Inclusion Roundtable that addressed allyship in action.

"When the event started five years ago, I was the chair, and we had the support of a handful of passionate people, but today, that event is one of our hallmark events at our firm. Our most senior leadership, clients, and employees throughout our firm come together to collectively learn from each other, share ideas, and share best practices." 

While many organizations are making substantial strides toward gender equity, Horwitz-Marcus noted that it is still unusual to see a woman in field leadership. "A lot of women would say it's just not happening fast enough, and there's still so much catching up to do that it's going to take many more decades," adding, "The financial services industry really needs a makeover. It [appears that it] has this old school, traditional Wall Street, Gordon Gekko, downtown Manhattan, stock exchange perspective. And the industry is so far from that. It's actually an industry that's amazing for women because being a financial advisor is about being a good listener, helping people plan for the future, holding their hands, and providing psychological guidance when times are difficult. These are characteristics that are really strong in so many women, and they just don't know that this industry is a place where you can make a career." Horwitz-Marcus continued, "There's so much opportunity for women here. I just think the industry as a whole needs to make sure they show that softer and more empathetic side."

Horwitz-Marcus shared that she hopes that if her daughter decides to enter the financial services industry, she won't ever question the opportunity and will instead look at the job and the culture and say, “I can do this” without hesitation.

Empowering Other Women & Internal Mobility

Marlene Alexander, Head of Internal Sales, Voya Investment Management

Paving the way for a more equal and inclusive workplace requires a long-term approach designed to empower women. Connection, education, and support are imperative when implementing gender equity policies to hire, retain, and promote female employees. Based on findings by Deloitte, leveraging the multiplier effect (whereby one woman in the C-Suite is correlated with three women in senior management roles) ensures that diversity at the highest levels of the organization drives progress and advances the overall pipeline of diverse talent.

Voya Investment Management is an excellent example of this effect being successfully implemented. Within Voya, women comprise 56% of the board of directors, 30% of the executive committee, 36% of leadership, and 52% of the workforce. Marlene Alexander, Head of Internal Sales at Voya Investment Management, believes the dramatic advancements she has witnessed throughout her career are a direct result of the cultural cascade that can happen when change starts at the top.

In addition to capitalizing on the multiplier effect, Alexander is an advocate for internal mobility. When you promote from within, people see opportunity. Alexander noted, "We really want to hire from within because it helps create a chain of events that will allow us to promote other people, move other things around, and boost morale. An internal promotion might need a little more training, but it is the right thing for us to do right now."

Regarding the current state of gender equity in the financial service industry, Alexander stated, "I am so much more comfortable going to meetings. I don't feel like I'm the only one in the room, and I don't have the anxiety, awkwardness, or any of those things. It is so much more uplifting now, and I believe a lot of that has to do with the culture of the organization that you work for. And that starts at the top."

"I think some of the best things come from allowing others to have a platform and a voice."

Over the past two years, the financial services industry has demonstrated astonishing ability navigating unprecedented levels of uncertainty but there is still work to be done, especially in terms of gender equity. Questions remain about who's working in the sector and with what set of biases, beliefs, and priorities. There have been significant strides to advance equity and create an executive workforce that more accurately represents the clients it serves. Despite this, there are still further solutions, strategies, and supports that can be implemented to move the sector forward.

Changing the reality cannot be done alone by the women looking to advance in their careers; it will require a coalition of allies to make changes in education, access, recruiting practices, as well as other institutional shifts. People in power, especially those who are favored by prevalent biases and norms, must be prepared to have brave conversations about topics such as equal pay and equitable hiring and promotion. As an executive recruiter, I have participated in substantial diversity training to ensure our practices are inclusive and fair, and our clients evaluate a slate of candidates that represents our contemporary world. It is my sincerest hope that highlighting this topic will help you as you look for ways to advance equity in your organization.