Women who work in the retail financial advice business have long faced sexual harassment and discrimination at the hands of their male colleagues, just as women have in other industries.
Wall Street's at times flagrant harassment of female financial advisers and employees has resulted in notorious scandals and multimillion-dollar settlements with female brokers. Remember the Boom Boom Room scandal at Smith Barney in the 1990s, in which male brokers at a Long Island branch office acted as if they were trying out for the sequel to “Animal House”? Or the $250 million that Merrill Lynch paid to more than 900 female brokers who brought claims against the firm during the 1990s?
“Those cases, among others, are from the Anita Hill era that showed that overt behavior was unlawful and not acceptable, and also demonstrated the willingness of women to speak up,” said Suzanne Bish, a partner at Stowell & Friedman, which represented Merrill Lynch advisers in the above-mentioned class-action suit.
“Such old-fashioned overt conduct may have lessened,” Ms. Bish said. “However, the economic discrimination against women is still going strong on Wall Street. Women don't have the same playing field and are often passed over for teams or when client accounts are divvied up. Also, the number of women financial advisers hasn't gotten better.”
With the history of harassment as a backdrop, fair compensation for women in the financial services industry remains a sore point.
According to a report earlier this year in the New York Times, in 2015 women filled 31% of jobs in the “securities, commodities and financial services sales agents” group tracked by the Bureau of Labor Statistics, but they earned only 52 cents for every dollar that men made, according to a study by the Institute for Women's Policy Research in Washington.
Some industry observers say conditions for women, particularly those serving as retail financial advisers, have improved. Securities firms now hold meetings focused on female financial advisers and also are assiduously courting women clients, they note.
Others stress that, while there have been improvements at the branch level and in the field, female representation on the boards of major retail brokerages remains woefully inadequate and true change in the industry cannot take place until women hold a greater number of board seats. For example, two of the nine directors at LPL Financial Holdings Inc. are women; at Morgan Stanley, two of 15 directors are women.
“I think things have changed dramatically, but not enough to my way of thinking,” said Rita Robbins, an adviser who's affiliated with Royal Alliance Associates Inc. and a founder of Affiliated Advisors, a large branch under Royal Alliance. “The rule was one woman per branch at Paine-Webber in the late 1970s. That stuck around for a really long time.
“When I was a wholesaler ... I had to go to the meeting at the New York Athletic Club,” Ms. Robbins said. “Women weren't allowed in the bar, so I sat in the lobby while men had drinks.”
Current statistics, however, appear to show that there has been a decrease in sexual harassment against women at financial services companies. In 2010, the total number of charges alleging sexual harassment in the financial industries was 200, according to the Equal Employment Opportunity Commission. Five years later, that number had dropped to 124, a decline of 38%.
There are two types of sexual harassment claims, according to the EEOC: quid pro quo and hostile work environment.
Quid pro quo means “this for that” and in this context, it involves expressed or implied demands for sexual favors in exchange for a workplace benefit like a promotion or to avoid some detriment such as being fired, according to the EEOC. Hostile work environment harassment occurs when speech or conduct is so severe and pervasive that it creates an intimidating or demeaning environment or situation that negatively affects a person's job performance, according to the commission.
DETAILS REMAIN HIDDEN
Attorneys and former Wall Street executives claim that those numbers should be viewed with suspicion, particularly because mandatory arbitration clauses in employment contracts block employees from bringing harassment claims to court. Instead, they are required to have their claims heard in private arbitration and the details of those claims remain hidden from the public.
“I feel like the firms want to change,” said Maureen Sherry, a former managing director at Bear Stearns turned novelist and writer. “There are diversity committees and they have written enough checks about this. The anemic numbers of women advisers and bankers are embarrassing, especially when Wall Street is so out of favor.”
The anxieties have deep roots, she noted. The threat of potential legal action from women who work in the investment business has made some men fearful of hiring women, Ms. Sherry said.
“Now they are looking at each other and asking, 'Why can't we get there?'” she said. “There is a subconscious bias. Men say to me, 'If I have a woman who is not working out in a position, I am stuck with her. There could be legal action against me for letting her go.'”