Seitz Partners’ Monday Q&A This Week’s Focus: Gender Disparity in Institutional Distribution -
Q: Seitz Partners published gender diversity statistics related to all client-facing institutional distribution professionals, do you have a breakdown related to leadership positions?
A: After reviewing over 350 heads of institutional distribution roles (the top job), we found that women account for only 24% of those leaders. Last week, we highlighted that women comprise 35% of the overall client-facing institutional distribution community. Clearly, as pay grades and responsibilities increase, the gender disparity becomes greater.
Despite the historic inequity, trends suggest that women are being hired into institutional distribution leadership roles at increasing rates. Three years ago, women accounted for 21% of hires and promotions into head of institutional roles. Two years ago, that number improved to 27% of new hires. Over the last 12 months, 30% of hires and promotions into the top institutional distribution role were women.
The Breakdown: External Hires vs. Internal Promotions
Over the last three years, asset managers have hired more candidates into the head of institutional role from outside their firms than via promotion from within, though the gap is closing. Three years ago, over 80% of newly hired institutional leaders came from competitors. Two years ago, that percentage dropped to 75% and over the last 12 months, roughly 55% were hired from competitors.
Of those women hired into the top job, the percentage promoted from within also increased every year for the past three years. Three years ago, 82% of female institutional leadership hires came from competitors while 18% were promoted from within. Two years ago, 69% were hired externally compared with 31% via promotion. In the past 12 months, 60% were hired from competitors versus 40% promoted from the firm's leadership ranks -- demonstrating and increased willingness to invest in home-grown talent.
The year-over-year uptick in gender diversity is a function of several factors including, but not limited to, the following:
- women hired into these positions were strong distribution leaders recruited from similar roles at competing firms, while others demonstrated significant success at their current firms and warranted consideration for internal promotion;
- a growing number of boards, CEOs and heads of global distribution recognize the value of women in senior leadership roles;
- hiring managers, human resources leaders and executive recruiters intentionally push for improved diversity across slates of potential candidates;
- and firms are increasingly looking to their consultant relations and relationship management leadership ranks, in addition to institutional sales, to fill the top job.
This last point is significant. Women represent less than 15% of institutional sales leaders, so the pool of female talent in that distribution function is small relative to their male counterparts. Comparatively, 30% of consultant relations leaders and 37% of institutional relationship management leaders are women. As we established in previous publications, the importance of the investment consultant channel and the increasing demands and complexity in the relationship management function are yielding leaders capable of competing for, and landing, the head of institutional role. Expect to see continued hiring from these considerable pools of talent.
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