“Our profession has a diversity problem. If we are to change, we must change our demographic….As the largest global association of investment professionals, we are in a powerful and unique position to bring awareness to this issue.”
— Paul Smith, CFA, president and CEO of CFA Institute

The CFA Institute Women in Investment Management (WIM) initiative was established through an effort led by female members of CFA Institute’s Board of Governors, society leaders, and other volunteers. The WIM initiative’s goals are to increase the number of women who join the profession and earn the CFA charter; retain women in the profession and influence culture from within; and create demand for diversity as an industry imperative.

The annual WIM initiative Alpha and Gender Diversity conference is organized annually with the goal of advancing the business case for diversity in the investment profession. Toronto had the honour of hosting the 2017 conference in September, attracting an impressive number of attendees from around the globe. The quality of speakers year to year, in addition to the relevance of the topics covered, has ensured that this conference has become a CFA member favourite.

The Alpha and Gender Diversity conference is not a “rah-rah women” conference; rather, it’s a venue where speakers and participants discuss gender diversity in the context of cognitive diversity. They place attention on optimizing, not maximizing, diversity in order to create a positive impact, and the issues tackled are specific to addressing investor outcomes—and improving those outcomes, particularly, through diversity.

Speakers during the packed day-and-a-half conference highlighted diversity issues faced by the investment profession globally and offered tangible solutions, while providing attendees ample opportunities to network.

Speakers included Suni P. Harford, head of investments at UBS Asset Management (Americas) Inc., who drew on her experience to speak about creating and inspiring teams for optimal performance. Andrea Turner Moffitt, co-founder of Plum Alley Investments, discussed venture capitalist perspectives on investing in women-run and gender-diverse start-ups. Elizabeth Corley, vice-chair with Allianz Global Investors, addressed collaborating with clients to create investment solutions. Panel discussions included topics such as incorporating environmental, social, and governance considerations in security selections; investing strategies that persist through uncertainty; and positioning investment firms for success.

Heather Brilliant, CFA, managing director (Americas) with First State Investments, and Brad M. Barner, associate dean and professor of finance with the University of California, Davis, presented fascinating research on gender diversity. Brilliant’s presentation—titled “Improving Diversity: What Really Works”— pointed out that only 45 per cent of investors believe gender diversity doesn’t matter for managing investments. The investment profession must take note, however, that diversity training doesn’t seem to work since bias, to name one example, can be unconscious and hard to train around. Instead, engagement, exposure, and accountability do have an impact in terms of diversity and can influence cultures from within.

Barner’s presentation—“Women in Finance, What Do We Know”—offered updated academic research highlighting that women continue to be underrepresented in finance and other STEM fields, with the “math gap” and the “competition gap” being identified as contributing factors. What both Brilliant and Barner noted is the importance of role models for female professionals. Research shows that mentorship, both formal and informal, has a positive effect on women at all stages of their academic and professional careers, and that mentorship programs are fundamental for recruitment and retention of women in the investment profession.

Roger Urwin, global head of investment content at Willis Towers and co-founder of the Thinking Ahead Group, noted the importance of diversity. As he said, “The future of finance depends critically on meeting the challenge of gender diversity going forwards.”

For more information on WIM, and to get involved, go to www.cfainstitute.org/wim

Why Care About Diversity?

Diversity can lead to better investor outcomes

• If alpha comes from doing something different, we need a range of perspectives to have an edge. Research shows diverse teams can deliver better results.
• Public companies with one or more women on the board have returned a compound 3.7 per cent a year over those with none, measuring stock market return since 2005 and adjusting for sector bias.¹
• Companies that were most gender diverse (top quartile) had 41 per cent higher return on equity than the companies with no women.²
• In a study of U.S. fund managers, mixed-gender investment teams slightly outperformed both all-male and all-female teams.³

Yet women are underrepresented in the investment management industry

• Using CFA Institute as a proxy for the industry, only 18 per cent of members are women. In the U.S., this percentage compares with 33 per cent women in the medical profession, 36 per cent women in the legal profession, and approximately 50 per cent women in the accounting profession.
• 35 per cent of candidates for the December 2015 CFA Program exam were women, which has increased steadily from 20 per cent in 2009. This represents prospective new entrants to the profession, who are sitting for Level I of the exam.
• Less than 3 per cent of mutual funds in the U.S. are managed exclusively by women, with less than 2 per cent of the $12.6 trillion in assets.⁴
• Mixed-gender teams manage 21 per cent of funds in the U.S., which represents about a third of the industry’s assets.⁵

¹ The CS Gender 3000: Women in Senior Management, Credit Suisse Research Institute, September 2014
² Women Matter 2010, McKinsey & Company, 2010
³ Fund Managers by Gender, Morningstar Research Report, June 2015
⁴ Morningstar, 2015
⁵ Morningstar, 2015

Source: From the CFA Institute Women in Investment Management Initiative pamphlet.