While male advisers are more than three times as likely to engage in misconduct than female advisers, women face much more severe punishments at the firm and industry level, a report finds.
According to research conducted at the University of Chicago's Booth School of Business Stigler Center, female advisers are 50% more likely than male advisers to be fired or separated from their jobs following an incident of misconduct. They also face longer periods of unemployment and are 30% less likely to find a new position in the industry within a year, say researchers Mark Egan, Gregor Matvos and Amit Seru in a paper titled, "When Harry Fired Sally: The Double Standard in Punishing Misconduct."
The research found that, on average, one in 11 male financial advisers have records of past misconduct, compared with only one in 33 female advisers.
Past misconduct also weighs more heavily on women than on men, the research found. Male advisers with misconduct are only 19% less likely to be promoted relative to other male advisers, while female advisers with recent misconduct are 67% less likely to be promoted relative to other female advisers, the researchers found.
Despite their more lenient treatment, male advisers are twice as likely as women to be repeat offenders, and they engaged in misconduct that is 20% more costly for their firms to settle. The research also found that female advisers with no female representation at the executive or ownership level are 42% more likely to experience job separation than male advisers at the same branch following an incidence of misconduct. By contrast, firms with equal representation of male and female executives or owners discipline male and female advisers at similar rates.