NZ Herald - The women inside NZ’s male-dominated investment industry

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In a room of 30 people at company boardroom meetings, Victoria Harris often finds she is the only woman.

But rather than feeling put out by that, the investment portfolio manager at Devon Funds Management sees it as an advantage.

“The great thing is, you get remembered because you were the only female there,” she says. “You almost have a stronger position to build that relationship.”

There are so few women directly managing money in New Zealand that they can just about be named on the fingers of one hand.

Research by Women in Super - a group for women in the financial services industry - last year found 92 per cent of the key personnel managing KiwiSaver money in New Zealand are men. That’s despite the fact that nearly half of KiwiSaver members are female.

Women in Super chair Tracey Cross says the figure came as no surprise to her.

“Of course there are women involved in running KiwiSaver products, but often they’re in customer-facing, product, or marketing roles.”

It is the more senior decision-making roles where women are scarce, and Cross says that lack of diversity is a problem because it can lead to a narrow view.

“It’s important because we know diverse teams, diversity of thought, leads to better decision-making and produces better financial decisions over the long term. It’s not just male-female, it’s wider than that.”

She says a lack of women at the top can also mean their specific needs may not be considered in the way a product or service is designed.

“If you had a gender lens on it [KiwiSaver] from inception, you wouldn’t necessarily have women missing out on the government tax credit - the free money - which a lot of women miss out on because they are taking time out of the workforce to have families or they come back part-time or they just don’t understand what they are missing out on.”

Asked why women aren’t going into investment management, Cross says it can be hard to be something you don’t see.

“They say there are enough women coming out with finance degrees. They are just not going into investment management. Maybe part of that at that point is you can’t be what you can’t see - they don’t see a lot of representation there, and a career path. There is no great pathway or encouragement.”

The United Kingdom has just set up a future female fund managers programme as part of a diversity project. Companies there are being encouraged to sponsor a woman to do the course over a year.

Cross would like to see the same kind of scheme in this country.

Breaking into the industry

Harris says her interest in companies and investing stemmed from her mother.

“She got me into investing when I was quite young. She bought me some Contact shares.

“I remember this money arriving in the post. I didn’t know at the time, but it was a dividend cheque and I was, like, this investing stuff is great - you literally sit back and relax and money comes through the front door.”

In high school, she played around with setting up small businesses, before doing a business degree at university.

“I thought, if you took business you ended up as an accountant.” It wasn’t until she took a finance paper that she saw real-world examples of how investing worked and it resonated with her.

While her degree had a roughly 50-50 split between men and women, once she hit the investment industry she realised that somehow, all the women had gone elsewhere.

“It was quite eye-opening and something I definitely noticed in the beginning. I was the only female in my team in my first job and every job I have had since, which when I was younger was really intimidating and impacted my confidence a lot because you are different - not only are you young and inexperienced, you are also female.

“So it was trying to find my way in a very male-dominated world,” says Harris, who now has primary responsibility for managing Devon’s Sustainability Fund.

She points to historical gender roles as a reason for the lack of women managing money.

“Men were the sole breadwinners of the household income, therefore they dominated the investing world and growing that wealth and understanding that, and therefore they were the dominant gender in the finance industry.

“I think also when you are dealing with money you are dealing with a lot of egos and it does create this men’s club which in itself is offputting for a lot of women.”

She believes the industry is changing but there are still challenges with women having a family.

“That can be quite difficult when you are trying to manage money in a market that’s open five days a week. The stock market isn’t very conducive to only working two days or three days or leaving at 2pm. It probably means there will be a slower transition to a more typical industry where you can have that flexibility, but it is moving there.”

She says more education is needed about what roles there are in the finance industry, and then having support for those who get to senior finance roles if they do have a family.

Frances Sweetman is a portfolio manager of New Zealand equities and head of sustainable investment at Milford Asset Management. She ended up in investment management by accident after switching from working in property in London. She moved to Australia and became a research analyst at Macquarie Bank when the commercial property sector came under pressure during the global financial crisis.

From there, she chose to move into wealth management rather than staying with investment banking.

“The reason for that is that I think the wealth management industry has got a really important purpose, which is growing people’s wealth and funds for people’s retirement, which I really like the idea of.”

At Milford, there are eight females in the 38-strong investment team, but she is the only female portfolio manager. The rest of Milford is 45 per cent female.

“The investment team does have fewer women than the rest of Milford,” says Sweetman. But she says those statistics have improved over the past four years.

“Milford was only around 30 per cent [female] four years ago and a big part of that has been really deliberate to try and improve the diversity and inclusion across the whole business.”

She says driving that change has been the fund manager’s HR team.

“When we are hiring, every role has to have diversity on the shortlist. But also, a big part of it is we have hired a lot of people - the business has really rapidly grown over the last four years so naturally some of that old gender bias where the company has been very small and stable for a while has been addressed through hiring a much more diverse range of people. It has not been getting rid of the old, just been bolting on a lot more diversity with the new.”

Sweetman has two theories about the lack of women in funds management.

“It’s a very unrecognised part of the [finance] industry. Often the people attracted to it are people that have come from other finance areas or have had people they know working in it. That can be quite male-dominated. And the other reason you have fewer women actually managing money ... is because it is quite a demanding and stressful job and so that does make it more difficult to manage when you have got a family.

“I think it is one of those industries that loses a lot more women after they have children just because it is very difficult to balance the two.”

Sweetman has two children aged 9 and 12 and says it is difficult for everyone to manage family and work.

“Mine doesn’t seem any harder than an accountant or lawyer. But the reputation of the industry being demanding and stressful and it’s also quite long hours - so that’s quite hard.”

The shift to flexible working has helped, she says.

“When I joined [Milford], flexible working wasn’t really an option but now it definitely is and so that is one of the things that helps support all parents to stay and progress in the industry.

“It has been less adopted historically because when you are a key knowledge person, you need to be there when the markets are open - it’s not one you can as easily job share because by nature you specialise in different things - you are the portfolio manager of that fund or you are the analyst on that sector. When you are specialised, you need to be there when markets are open, so that does make it a little bit harder.”

Does it even matter who manages the money?

Some investors argue that they don’t care who manages their money as long as the returns are good.

Sweetman says that is a fair comment. She jokes that most investment managers would hire a blue alien if it could deliver good performance.

“But diversity is really important because if you are not able to hire from a diverse pool, you are just shrinking your pool of talent so you can’t necessarily get the best people to manage money if you are only able to fish from one half of the population.”

She says diversity of thought is also incredibly important in wealth management.

“When you are making decisions about how to invest other people’s money, those decisions need to be really well stress-tested and having diversity of thought, which more naturally comes from diversity of background, then that is incredibly important.

“It is not just gender diversity either - the wealth management industry has got a massive issue with all diversity, not just gender, which is also interesting because it suggests it is not just about women being put off by that ruthless stereotype of the industry - maybe there is something else in it?”

Sweetman says addressing the issue has to be about changing the stereotype of the industry and even though she dislikes it she goes on TV to publicise the industry.

“It’s a fantastic job so it would be great if more people were attracted to coming to work in it.”

She says wealth managers could help by going into universities to increase the industry’s profile, and by ensuring that their hiring policies were right.

“Flexibility is a big part of it. An inclusive culture and then just hopefully more diversity breeds more diversity.”

But she isn’t keen on quotas.

“The issue I worry about when you put fixed targets in or push too hard is you get - people become resentful and you also get tokenism and people assume that you are only there because you have had a leg-up.

“No one wants to feel like that. I think it is a bit of a delicate balance.”

The Financial Services Council has already recognised the issue and last year held an event called “it starts with action”.

Council spokeswoman Clarissa Hirst says the event galvanised the industry and showed there was a lot of momentum and appetite to talk about these topics.

It’s looking to provide more resources and tools and support for women in the industry as well as getting more diversity.

“We have a strategic research committee that is also working on a project which I can’t say much about at this stage. But it will be focusing on looking around gender equity and trying to benchmark and give us a gauge of where we are at so we can really try to tackle some of these things.”