How women succeed in finance
Women in this sector earn more than they would in traditionally female-dominated fields, but less than male peers. Learn how to even the playing field.
If you're a woman thinking of pursuing a finance career, there's good news and bad news. The good news is you're likely to make more money than in a traditionally female career.
The bad news is, you're unlikely to make as much as your male peers. "Even though there may not be equality, there are relatively high compensation levels for women in the financial services industry, as compared to totally women-dominated industries such as nursing or administrative services," says Linda Bergen, former president of the American Woman's Society of Certified Public Accountants.
How Wide Is the Gap?
While several studies have documented a pay gap between men and women in financial services, researchers disagree over why it exists. A US General Accounting Office study in 2001 found women managers in finance, insurance and real estate earned 76 cents for every dollar earned by their male counterparts.
One way to set yourself apart from your colleagues of both genders is to pursue certification or additional education, such as an MBA or CPA (Certified Public Accountant) designation.
One of the toughest credentials to gain is the Chartered Financial Analyst (CFA) designation granted by the Association for Investment Management and Research. While that will likely raise your overall compensation, you'll still trail men's salaries, on average.
"Across all levels of experience in each of the markets surveyed, women earn significantly less than men," according to the group's 2001 compensation survey. "While there is no simple explanation for the imbalance, one factor may be the greater proportion of men in the most senior and high-paying roles, such as chief executive officer and chief investment officer positions and the greater concentration of men employed by securities firms."
Study author Debra Brown, managing partner of Russell Reynolds Associates, a New York City investment management recruiting firm, adds that pay differentials are easily perpetuated, even when gender bias doesn't exist. If you have two applicants with the same quality of experience and one currently earns $75,000 while the other earns $100,000, when an offer is made, the applicant earning $75,000 is going to be offered less to do the same job. "Organizations don't necessarily place a price tag on a position,” Brown says. “There's a differential based on what the applicants were earning before."
Write Your Own Paycheck
If you work in a commission-only job in finance, the pay gap may not affect you. In financial planning, women have an edge over their male counterparts, because they're raised to be more empathetic, says Deena Katz, partner in Evensky, Brown & Katz, a Coral Gables, Florida, financial planning firm and author of Deena Katz on Practice Management. "Being a financial planner is 90 percent shrink and 10 percent number crunching," she says.
"The way to rise through the glass ceiling is to know the rules, follow them, work hard and look for people who can mentor you and help you make the right connections to people who are going to promote you to the next step," says Bergen.
Be OK with Yourself
As women advance into management roles, they sometimes spend too much time and energy worrying about whether they're competent, says Gail Evans author of Play Like a Man, Win Like a Woman. "The higher up you get, the more it is about making good judgments, having vision, figuring out a strategy and leading a team, and the less it is about getting it right," she advises.
Have a Great Spouse
The GAO researchers also found women were working much longer hours than men, once you took into account the number of hours they put in at home. It's not easy to be a mother and a manager. "You have to be extremely well-organized, have good day-care arrangements and be efficient," says Bergen.
On the other hand, you could try to pick a spouse who will do the laundry and pick up the kids while you make dinner.
Learn more about finance careers.