Broadly speaking, women, not least because they earn less than men, also invest less. A 2017 survey by Bank of America Merrill Lynch found that while most are confident in budgeting and paying bills, only 52% are confident managing investments, compared with 68% of men. A majority of the female respondents also said that the financial services industry has traditionally catered to men. Funny enough, an abundance of research has shown that women make pretty good investors. They tend to be more cautious, patient, trade less (which saves on fees), are less prone to panic and thus outperform. As I’ve noted before, it’s no wonder that women share these traits with Warren Buffett, the world’s most celebrated investor. Even so, only 10% of fund managers in the U.S. are women, and they tend be put in charge of passive funds, according to consistently depressing but important research done by Morningstar Inc.
Corporate America has certainly placed a bigger emphasis on gender diversity and pay equity. But when companies brag about their progress, a closer look will often reveal that female leaders tend to be clustered around public relations and human resources. As important as that work is, those positions don’t put women on course to become the next CEO.
That’s why I found E*Trade so refreshing. Women are at the center of the company’s foundation: its technology, the “E” in its 1990s-throwback of a name. Having that diverse perspective and life experience will only help E*Trade and its new parent design products that appeal to a wider group of customers. (I’d be remiss not to mention Ellevest here, a robo-adviser that already specifically targets women and was founded by Sallie Krawcheck, who once ran wealth management at Bank of America and Citi.)
James Gorman, chairman and CEO of Morgan Stanley, said he’s considering calling his newly acquired business something along the lines of E*Trade Powered by Morgan Stanley, but that it’d be “completely nuts” to get rid of the E*Trade brand. E*Trade CEO Mike Pizzi isn’t going anywhere either. The bank would do well to keep E*Trade’s culture intact, too.
This article was provided by Bloomberg News.