In March 1994, in Invest–ment Executive’s research report on women in the financial services industry, a woman broker predicted that in “five or 10 years,” there would be parity between men and women in the industry. Would it surprise anyone to learn we aren’t there yet?

While Canadian banks have much to brag about — women represent, on average, 69% of their full-time staff and more than half of senior management — no other pillar or channel has even approached parity, despite the oft-stated conviction that this is “the perfect industry for women.” Progress in achieving parity can be slow, and the financial services industry is no exception.

In 1994 and 1996, IE compiled data from Canada’s brokerage firms, insurance companies, banks and credit unions, looking at the number of women on the boards of directors, among senior executives and among the foot soldiers — the investment advisors, account managers and insurance agents — of the financial services industry. There were modest gains each time. IE published its last Report on Women in Financial Services in Canada in March 1998, when we added mutual fund dealers to the survey. The tone then was optimistic. As one female advisor said on the front page of that issue: “Women have an advantage in this industry. Clients like women.”

That is not to say that after almost a decade, there isn’t an improvement. According to the financial services firms surveyed for this year’s report, women make up a larger portion of the population of the financial services industry than ever. There are more women in the industry now, in absolute terms, than there were a decade ago. There are more women on boards of directors, on executive committees, in retail sales and among top producers than there were a decade ago. In fact, the number of women among top producers has increased faster than the number of women in sales, confirming what we were told a decade ago: women do have an advantage in this industry.

Indeed, there are more women now compared to a decade ago in all distribution channels, and in every single category that we looked at but two.

So, why are we disappointed?

Because, fundamentally, not much has changed. The firms have changed. Remember Midland Wal-wyn Capital Inc.? L»vesque Beaubien Geoffrion Inc. or Canada Trust? How about Mutual Life Assurance Co. of Canada? But the broader trend has stayed the same. Women are generally in the minority in sales positions and among top producers, directors and executives — even though they are often in the majority for full-time staff.

Just as they were in 1994, 1996, and 1998, Canadian banks and credit unions are head and shoulders above the other channels for hiring and promoting women. Down from 70% in 1998, women now represent 69% of the banks full-time staff. But they are getting promoted. Almost half of senior bank management is female. Of the banks and credit unions who participated in this year’s survey, women represented 31.5% of the boards of directors — more than twice the 1998 figure and just shy of twice the percentage of women on the boards of directors at either the investment dealers or the insurers.

Insurance companies and the brokerage firms have long been perceived as being male-dominated —and they still are. But they have gained some ground on the banks since 1998. This year, women made up 34% of Canada’s leading insurance companies’ senior management on average, more than double the average a decade ago.

The brokerage firms have had uneven success in promoting women. For the five brokerage firms in our survey with women on their boards of directors, 28% of the directors are women on average. For the five other brokerage firms in the survey, the average number of women on the board is zero. That the overall average of 16% is up from 6.6% in 1998, is impressive. But, in the context of the overall research, it is only good enough to rank dead last.

On the other hand, the brokerage channel has had more success in promoting women in sales roles. Women comprise 22% of the sales force, up from 15% a decade ago, and represent 20% of top producers, more than double the 1998 figure.

@page_break@The insurance channel, however, has lost ground relative to the other channels overall. In 1998, the number of women on executive committees at the banks and the insurers were almost neck and neck, at 21.3% and 18.6%, respectively. This year, women make up only 22% of executive committees at insurers — surpassing, at long last, the bank’s decade-old figure.

But it is not just financial services in which the evolutionary pace is slow. Deborah Gillis, vice president for Canada with research organization Catalyst Inc. in Toronto, describes the overall progress in the number of women in corporate leadership as “frustratingly slow.”

Catalyst publishes biennial reports, alternately looking at the number of female directors and female corporate officers of Financial Post 500 companies. In its most recent report, Catalyst found that between 2002 and 2006, the percentage of corporate officers of FP 500 companies who were women increased only 1.1%, to 15.1% from 14.0%.

Given this slow progress, it is cold comfort that according to Catalyst research, the financial services industry — health and life insurers and banks and credit unions specifically — leads the FP 500 in advancing women in leadership roles. It turns out the industry’s progress is enviable. Food services and specialty retailing round out the top five sectors for women. “These are companies that tend to have the highest proportion of women as clients,” says Gillis by way of explanation.

The next Catalyst report on directors will appear this year.

Gillis maintains there is a “compelling business case for advancing women in an organization”: Catalyst research on Fortune 500companies, which appeared as Catalyst’s The Bottom Line for 2004 (see www.catalystwomen.org), establishes a “strong positive correlation” between women on executive committees and boards of directors and profitability.

In the survey, companies with the highest number of female corporate officers had 35% higher return on equity and 34% higher total return to shareholders than companies with the lowest number of women among their corporate officers.

The same goes for boards of directors. Fortune 500 companies with the highest representation of women on their boards of directors had 53% higher ROE, 42% higher return on sales and 66% higher return on invested capital when compared with companies with the lowest percentage of women directors.

Do women make better decisions? “Diversity and performance go hand in hand,” says Gillis. Does this apply to Canada? Catalyst has not looked into that yet. But Canada does lag behind the U.S. in terms of the number of women on boards of directors. Of FP 500 companies, 12% of directors are women, while 14.8% of Fortune 500 company directors are women.

If the financial services industry needs women, do women need the industry? Issues such as office-place harassment, dirty jokes and the “old boys club” mentality may be going the way of the dinosaur, but issues such as maternity leave and long hours are daunting for women starting a career and also looking forward to starting a family. That may be why women are gravitating toward positions with more consistent hours and pay, such as support staff and management, and not the demanding and inconsistent yet lucrative sales positions that boast the flexible hours and emphasis on building relationships that make the industry “so perfect for women.”

And, certainly, from the clients’ perspective, women do need the industry. They need financial planning. Chances are that baby-boomer women will outlive their boomer husbands and will have estates to worry about. Before long, their “echo” daughters will, too. Women also need independent advice in the event that marriage breaks down. Insurance products are a good fit for stay-at-home spouses and part-time workers who cannot count on disability benefits. Young mothers want RESPs and young professional women need RRSPs.

The boomers have already planned their retirement. Now it is time to start planning and saving for the next generations’ walkabouts, down payments, new business ventures and retirements. Women outnumber men in university graduating classes, in medical schools, in veterinary schools and in teachers’ colleges. They make up half the population, and a lot of them resent the fact that their fathers and their brothers bonded over the Report on Business.

The financial services industry may not have figured out how to employ women yet, but it will certainly have to learn how to serve them. And the industry is not one to overlook such an opportunity. IE