Compared to their male peers, women employed at brokerages are sanctioned more harshly
A US study has found that women working at brokerages face harsher punishments and have more difficulty finding employment again after engaging in misconduct compared to their male co-workers.
In the comprehensive study published by the National Bureau of Economic Research, researchers covered disciplinary records of 1.2 million US advisors and brokers, according to the Financial Times. The records represented all the advisors and brokers in the database maintained by the Financial Industry Regulatory Authority (FINRA) from 2005-2015, covering about 10% of workers in the finance and insurance industry.
The authors — who teach at the University of Chicago, Stanford University, and the University of Minnesota — found that women are 20% more likely than men to lose their jobs at brokerages over instances of unethical behaviour. “The financial advisory industry is willing to give male advisers a second chance, while female advisers are likely to be cast from the industry,” they wrote.
On average, around one in 11 male financial advisors have engaged in some form of misconduct, as opposed to one in 33 among female financial advisors. On the other hand, only around 25% of US financial advisors are women.
The researchers reported that women were more likely to be dismissed for misconduct than men, and 30% less likely to find new employment in the industry within a year. Among brokerage firms with a higher proportion of male executives, there’s a tendency to punish female brokers more severely for misconduct. At companies with no women at the top, female brokers were 42% more likely to be let go over misconduct than men.
Broker misconduct and violations of investment rules have become a more serious concern among regulators, both in the US and Canada, as retail investor protection gains more importance.
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