A new report on the financial advisory industry finds women are 20 percent more likely than men to lose their jobs following misconduct, and the rate of such discrimination is highest at Wells Fargo.
While women advisers have a lower incidence of misconduct industrywide relative to men, they face “large and pervasive differences” in how they are treated for bad behavior, according to the study, “When Harry Fired Sally: The Double Standard in Punishing Misconduct.”
The study, released this week by the National Bureau of Economic Research, is based on analysis of about 1.2 million advisers registered in the U.S. from 2005 to 2015. It comes at a time when the financial sector already faces claims of unequal pay and treatment of women compared with men.
The bureau is a private, non-profit that focuses on economic research. Key focus areas include developing new statistical measurements, estimating quantitative models of economic behavior, and analyzing the effects of public policies.
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“Our findings provide new insight into gender discrimination in the workplace,” the report says. “The financial advisory industry is willing to give male advisers a second chance, while female advisers are likely to be cast from the industry.”
According to the report, male advisers make up 75 percent of the financial advisory industry but are responsible for a “disproportionately large amount” of misconduct. Specifically, about one in 11 male advisers on average has a record of misconduct, compared with one in 33 female advisers.
The report also found male advisers’ misconduct is 20 percent more costly to settle for their firms. Male advisers are also twice as likely to be repeat offenders.
But after losing a job for misconduct, 47 percent of male advisers find a new position in the industry within a year, compared with 33 percent of women, the study says.
The Securities Industry and Financial Markets Association, a Wall Street industry group, has been critical of the authors’ methodologies in the past and accused it of “anti-industry bias.”
SIFMA and the Financial Industry Regulatory Authority, which regulates brokerage firms and brokers, did not respond to requests for comment.
At Wells Fargo’s brokerage arm, women advisers had the highest likelihood of losing their jobs for misconduct compared with male counterparts, among 10 large firms. Women were 25 percent more likely at Wells Fargo Advisors to be terminated for bad behavior compared with men, the study said.
Just behind Wells Fargo was A.G. Edwards, which Charlotte-based Wachovia acquired in 2007, the year before San Francisco-based Wells Fargo acquired Wachovia. Women at A.G. Edwards were about 25 percent more likely to lose their job in an instance of misconduct compared with men.
“Wells Fargo Advisors is examining this study’s assumptions and conclusions carefully,” Wells said in a statement. “There are substantial questions about the data and analysis that underpin the study. As always, our focus is on providing a diverse and inclusive work environment, while we continue to serve the needs of our clients.”
The report is authored by professors Mark Egan of the University of Minnesota, Gregor Matvos of the University of Chicago and Amit Seru of Stanford University.