Isabelle Farnham felt like she was falling behind her peers.
While some of her fellow students at the Ivey Business School at the University of Western Ontario had already secured summer positions in investment banking more than a year in advance, the 19-year-old didn’t have the slightest idea of what she wanted to pursue in the business world.
“I never felt like I had stepped up as a leader or had taken the opportunities that I wanted to in the past,” she said.
One day, after hearing a presentation from an ambassador of the Women in Asset Management program, Ms. Farnham perked up to the idea of a career in the field. She signed up for the 2023 summer class because she wanted to try something new and felt that its mission resonated with her own perceptions of the lack of women in business. While Ms. Farnham is still exploring paths in finance, she can now see herself aspiring to be a C-suite executive at a financial firm, and says she is interested in portfolio management.
Currently the only program of its kind in Canada, the summer training sessions offered by Ivey are aimed at improving awareness of the asset management industry among young women who are missing out on opportunities in a prominent and well-paid field that manages large pools of capital. Asset managers can be found everywhere, from pension and hedge funds to insurance companies and other financial institutions.
But the numbers of female money managers are bleak for a profession that values diversification at its core.
Out of 3,993 portfolio managers registered with the Canadian Investment Regulatory Organization, just 14 per cent or 554 were women, as of December, 2022, according to data from CIRO’s national registration database. That statistic is similar for associate portfolio managers: 17 per cent out of 726 are women, according to CIRO. A similar male to female gap exists among equity research analysts, according to an investigation by The Globe and Mail.
While more women have been graduating with business degrees recently, their participation in asset management has been stagnant for over a decade. The global share of female Chartered Financial Analysts, a designation typically required by employers in investment management, was 20 per cent in 2023 compared with 19 per cent in 2011, which is as far back as gender data has been tracked, according to a CFA Institute spokesperson. Canadian figures are similar, up marginally from 19 per cent to 21 per cent in 12 years.
“That’s a big bottleneck,” said Dagmara Fijalkowski, head of global fixed income and currencies in Royal Bank of Canada’s Global Asset Management division and a senior portfolio manager.
“The biggest barrier is lack of awareness and lack of women representation in the pipeline, which needs to be addressed,” she added.
Without many female role models and connections, women typically struggle to see themselves succeeding in the field and refrain from applying for jobs. Approximately 10 per cent to 20 per cent of applicants for a typical investment management job opening on Ms. Fijalkowski’s team at RBC GAM are female, she said.
Perceptions of asset management have also been tainted by the negative reputation of sell-side roles such as investment banking, which are known for “long work hours, no work-life balance and the ‘bro culture,’” said Saurin Patel, an associate professor of finance at Ivey and one of the instructors for WAM.
Ms. Fijalkowski, who is now the chair of the advisory council of WAM, proposed the program to Ivey after watching the success of a U.S.-based non-profit organization named Girls Who Invest, which promotes gender diversity in investment management through educational initiatives.
This year, the Ivey curriculum consisted of a five-week academic portion, which focused on developing technical skills and industry knowledge, as well as a 10-week paid internship in asset management. The program is open to second-year students at the University of Western Ontario from all disciplines and has recently admitted a few participants from McGill University. In the coming year, the organizers want to expand it to all undergraduate students in Canada.
To remove entry barriers, the training is offered to students as a free extracurricular program. It is backed by several sponsors in the financial services industry and has raised $1.2-million in funding, Mr. Patel said.
When it launched in 2022, the first group had 33 students. That number grew to 42 participants in the second cohort this year, many of whom came from diverse learning backgrounds, including business, arts, social sciences, sciences and engineering.
But the asset management industry also has a retention problem, as even the women who are drawn to the industry may struggle to reach senior levels. Possible reasons include the challenges of taking parental leave as well as infrequent job openings in senior roles.
“In this industry, low turnover and longevity are extremely valuable. As a portfolio manager, what matters is your track record,” which is “not very portable, because if you are moving from one firm to another, there will always be a shade of doubt. Was it her or was it the team that she was surrounded by?” Ms. Fijalkowski explained.
Kim Shannon, founder, co-chief investment officer and portfolio manager at Sionna Investment Managers, who has long promoted more gender diversity in the investment management space, said women who wish to have a family may feel pressured to delay pregnancy until they are established in their careers. For Ms. Shannon, that meant having her daughter at age 41, after six years of trying to get pregnant.
“I did delay pregnancy until I was already made portfolio manager. Because I knew that it would be very hard. I thought, especially even in that era, that it would be hard to get promoted if I’d done that earlier,” she said.
Given the complexity of such challenges, women’s inclusion in asset management will not change overnight, said Stephen Foerster, a finance professor at Ivey and instructor for WAM.
But the program is showing early signs of success. From the first cohort of 33 students, 31 obtained a summer internship in the following year by themselves. Of the 31 with internships, 87 per cent had roles in asset management or finance.
During a recent interview, Ms. Farnham sat at one of the boardrooms at RBC GAM with a view of the looming towers that make up Toronto’s financial district. She is nearing the end of the internship portion of the program in the bank’s high-yield fixed income team and will soon have to make some important decisions about her future.
“I’ve heard from all the women here and their experiences and it hasn’t been an easy path for anyone, especially women,” she said. “But seeing them now, and seeing what they do day in and day out, it has empowered me so much.”
The Globe and Mail, August 8, 2023