In conversation with Prerna Sharma, Stack’s financial expert extraordinaire and how she carved a way for herself as a woman in wealth management.
Two roads diverged in a wood-
And I took the one less traveled by,
And that has made all the difference
-Robert Frost
1. We’ve often heard dangerous misconceptions about women and our relationship with money. Women have historically been left out of the economic sphere, and while studies suggest an equal number of women enter the Finance workforce, only a few get to the top. With that context, what is it like being a woman in wealth management today?
Have we made any strides in making finance a more inclusive career for women?
Firstly, what's most encouraging to me is that the topic of gender diversity is on fire. While progress has been made in the past few years to make Finance/wealth management a more inclusive career for women, it remains too slow and there’s still a lot of work to do.
It’s no secret that this industry is very male dominated. I think women have a hard time breaking in because there have never been that many to begin with.There are inevitable ups and downs [during a career], and the downs always get magnified. Often women give up during that down time, partly because they don’t have the support infrastructure that tells them to keep going, because it will get better.Furthermore, entry-level women are less likely than men to have managers who act as their advocates and help them identify opportunities to pursue. Nor do they receive senior leaders’ advice on advancement or navigating organizational politics as frequently as do men.
2. People often like to suggest that the gender disparity in financial and economical job roles is ‘complicated’. That women are inherently not inclined to such professions. What is your take on this? How do you retaliate against someone who claims that ‘Finance’ is a male domain and women are primarily driven by emotions and creativity alone?
Like you mentioned, Money matters are often portrayed as a “male domain” and women are neither consulted nor involved while financial decisions are taken for a household or a joint family structure.A part of the answer lies in a complex socio-cultural web where women are discouraged from participating in discussions or decisions around investing.
I always keep in mind the saying, “You can’t control other people. Only your reaction.” It is better to let it go and save your energy for more important things. I have always been happy to use people underestimating me to my advantage. I have grounded my self-confidence in my self-awareness and successes; I know what I am good at and what I am capable of. Also, knowing that I do not know something or being corrected has never intimidated me or made me feel dumb. It has always just been an opportunity for learning.
It is important for women to break the common stereotypes of risk aversion, being less assertive and a dislike for complex mathematical or analytical problems. I see women every single day breaking those stereotypes and women leaders in the industry solving these problems.
3. Do you think women bring something special to the table, when it comes to finance?
A study by wealth-management firm Merrill is titled ‘Seeing the Unseen: the Role of Women in Wealth Management’, and it states that women wealth advisors bring a more holistic and less biased approach to financial planning? Do you think this to be necessarily true?
(Merrill's report found that on average, women rated their financial knowledge and understanding higher when engaging with a female financial adviser, and as a result were around 2.5 times more likely to say they were ‘very comfortable’ taking investment risks (2020, Merrill Bank of America))
It may be stereotypical but women are often more empathetic and better listeners in client meetings — two key strengths of a successful advisor. In general terms, women are much more adept than men at nurturing relationships. They intuitively understand when relationships require attention and consequently are better equipped to handle the complexities of family needs when shared wealth management is involved.
Perhaps because of the central role they play in their own families, women are also more collaborative by nature: they are more open to asking for advice and making joint decisions. As a result, women are naturally prepared to pursue agreement at every stage – and from all participants – an exhaustive and time-consuming process that is central to achieving a satisfactory compromise to match every family member’s individual expectations.
In my experience, women tend to build financial plans around specific life goals for themselves and their families instead of focusing predominantly on investment performance. Said differently, they are much more inclined to view money as a means to protect and care for their family rather than an end in itself.
As such, women also assign far greater significance to long-term goals such as retirement, education, and legacy planning. From an investment perspective, women are often considerably more risk-averse, hence they tend to be better diversified in their portfolios than men and typically place a higher premium on asset protection and preservation.
These important behavioral tendencies—patience, a goal-based perspective, and risk-aware diversification—comprise the essential foundational elements of any successful long-term investor.
Improved representation of female leaders will lead to a more rounded view of customers. This is particularly critical in financial services, given that more than half of women now control their household finances and are responsible for household savings and investing.
4. A lack of role models can be a real issue when it comes to motivating more female participation in STEM and male-dominated fields. Finally, for our last question, I’d like to ask what advice would you give young women who seek opportunities in Finance? Any tips to navigate biases and sexism?
The first thing would be to understand the importance of taking risk. All of us are brought up with the words “settle down”. I believe as women we should challenge the word “settle” and really learn to take risks in our careers and in our lives.You have to take those extraordinary and disproportional bets in your career. Don’t be afraid of failures. The path to a promotion is not always an immediate promotion; sometimes it’s gathering the right experiences in different areas. You may need to take a few lateral moves to get to where you ultimately want to be
Have a point of view and give your opinion. You have to take a seat at the table. Don’t assume that people know your point of view. It’s important to make your voice heard.
Be unapologetic in fighting for what you deserve. You can have a family and grow your career — don't feel that you have to choose one or the other.
Another thing I’ve learnt through conversations with peers and leaders, is how women in finance combat imposter syndrome. Imposter syndrome is inevitable during a person’s career and can be further amplified if you are a woman in a male-dominated industry. However, it is key to remember that most people have varying degrees of imposter syndrome and you are not alone in feeling it. It’s easy to get lost in the echo chamber of self-doubt, especially when you are new to your career and haven’t found your footing yet. But some advice to remember: check in with yourself – your thoughts are not always facts, and they can simply be the result of feeling uncertain.
My advice to young women entering this space is to always be hungry for more and to not hesitate to hit the ground running. Seize as many work opportunities that come your way as possible and listen to those around you on these initiatives, as you will learn a great deal from your teammates. Conversations you have with your co-workers, even if they contain criticism, will ultimately lead you to grow. Reflecting on past experiences will also help you to be more mindful and effective while moving on to your next project to only improve your work. Finally, it may be a journey, but learn the ability to self-advocate – you deserve to be here!
