I'm a fiduciary financial advisor (white male), and I largely agree with this article, and our industry is better on gender than race. This has to be the whitest industry in America. The Financial Services Institute (the industry's lobbying group) reported that advisors voted for Trump 71% to Hillary 19% and others 10%. The gender problem is nothing compared to to the race problem.
https://www.thinkadvisor.com/2016/11/29/financial-advisors-voted-overwhelmingly-for-trump/
9
When we had meetings with our financial advisors they ignored me and spoke only to my husband. If I asked a question, they had a very perfunctory answer, then went back to presenting charts and graphs to my husband. The irony is that most of the money they were managing came from my parent's estate. We both manage our estate now using Monte Carlo simulations and have done better than we could have imagined and without all the broker fees. My advice is simple: 1. Slow and steady wins the race 2. Don't try to keep up with the Joneses.
48
This is a truly silly article.
My family has used the same male broker for over 35 years. Who on earth would worry about his gender?
Bigotry on the Times' part.
25
As provocative headlines go the NYT is reaching for the stars with this one. How is it ok to say that someone should be fired based on gender? Or was the intent just to create a storm in a teacup?
20
My first broker was a woman who was pretty good, but wasn't responsive during the Y2K thing. Now I have a younger male broker who is terrific, listens to me (a female) and is very careful with advice. Not a testosterone-addled fool.
5
How about not hiring ANY broker? Totally useless and waste of money.
11
I want you to imagine any article in the Times suggesting you fire your female ( fill in the blank). Why is it acceptable to blanket group men together in a way in which no other subset would be? It is absurd. There are good and bad brokers and it is about their smarts, their ethics, and their ability to listen and understand their clients needs, not about their sex.
25
If a man wrote a column titled Consider Firing Your Female Broker he would be crucified.
82
If I know nothing else about a professional service - dentist, plumber, broker, whatever - I'll tend to prefer a woman on the assumption that she has had to prove herself in a context in which males still tend to have a leg up not based on competence. But only if I know NOTHING else, and it's easily trumped by things like online reviews or word of mouth.
3
What does 'roughly less than 20%' mean?
The discussion is interesting, however, how would the author react if the data were flipped?
Do either [female or male] brokers outperform [when commission fees are included] investments in index funds.
5
A broker may make you broker. A financial advisor will educate you, learn what’s important to you about your money and goals. A financial advisor will develop a personalized financial plan that considers estate planning, risk tolerance, tax implications and insurance needs. A financial advisor manages how you behave as an investor and saves you from your own worst instincts by building trust and reminding you that volatility can be your friend when accumulating shares in a long term strategy. If women outperform men at picking stocks by 1.8 percent, that completely misses the point.
9
There is something very repugnant about this article. Suppose statistics showed that white brokers outperformed black or Asian brokers. Should the blacks and Asians be fired as well, regardless of how well they performed individually?
Fire any under-performing broker, regardless of ethnicity, race, gender, or religious belief. But the theme of this article sounds like something my prejudiced parents would think up to justify their bias against blacks and Jews.
40
All brokers are a complete waste of time and money. Low fee index funds are all anyone would ever need.
24
Wow! This is fascinating. I have a male broker. Looks like I should perhaps rethink that.
2
I have to say, why I am not convinced, i believe there's some truth here. White American men are automatically competitive, they also tend to be automatic contrarians and poor listeners. They're guided by their gut — often into bankruptcy. Yet, I really have met a lot of dishonest professional females in the business world as well. I use to work in a female dominated field and witnessed a lot of blatant corruption on the girl's part. They're more likely to be passive aggressive, but that's a strategy, and still a form of aggression. They listen closely but they're not any more likely to swallow their pride or be convinced. Let's face it, your best guide to choosing a broker is to do so much due diligence as to who you're dealing with that you won't forget their middle nam or their kids birthdays. Strangers are never to be trusted, especially with your money and doubly if they're american professionals in NYC with all the credentials, regardless of their gender.
7
The default sexist assumption about money managers is that "of course" these people are mostly men, and men are "naturally" seen as more trustworthy, "straight out of central casting," as Trump would say.
The author calls into question this unconscious sexist assumption, then gets accused of [reverse] sexism--perhaps a valid argument. It's entirely plausible that women money managers are less likely to fall into the entitled frat boy "greed is good" subculture that leads to testosterone-fueled risk-taking and excessive trading.
The bottom line is--at least consider on an individual basis what qualities you want, and consider that, as likely as not, the woman might actually be a more competent professional!
4
Is the author also ready to advocate this philosophy where and when research shows men perform better than women? You can’t selectively be pro-research/data driven discrimination.
20
Ms. du Quesnay is directly on point. As a female financial advisor with 30 years experience, I view my job as one of the lesser considered "service fields". Woman still gravitate to careers in education, counseling, medicine etc, but many have the same perception of advisors and Wall Street that Ms. duQuesnay describes. They are not aware that this too is a "service field". For about 80% of my clients, it's not about the trading. It is about the goal setting, the strategizing, the educating and sometimes the handholding. I hope more women take this view and consider financial advisor as a future career choice.
7
Given the author's vast experience in the investment business, I think anyone reading this needs to take her seriously. After all seven years is a tremendous amount of time to collect enough anecdotal evidence to make such sweeping statements regarding the lack of talent men have for investing. I wonder though how she pays attention to her client's finances while she has accumulated 28,000 Tweets? Is she any relation to the President?
14
@Michael
Amen to this
1
Never seen so little evidence for such a bold claim.
18
As a (male) 38 year veteran of the financial services industry (now an independent investment advisor) and certified financial Planner (CFP) who has seen multitudes of client abuse and organizational mismanagement I mostly agree with the authors points.
However I take issue with her trying to link gender with performance, i.e. I have seen legions of good, competent and caring men who have handled multiple generations of family wealth in a fair and proactive manner, acting as fiduciaries, putting their clients interests first.
I have also seen many women brokers who are and were as driven and competitive as their alpha male counterparts in securing status as their firms "top producers", often traveling deep into the gray area to get the 'win".
I think what's important is to find true fiduciaries who will use their skill, knowledge and experience to help and vigorously advocate for their clients, puting their own and firm's interests secondary.
9
I'm one of the rare female brokers. I was buying bonds for retired clients in 1999 while everyone else was buying Enron or Worldcom. I know that I am different from my male counterparts - I truly care about my clients, so much so that they have told me I am part of their families. That's a huge compliment! It is not easy to buck the trend and do what's right for the client when first starting out in this business, but I have clients who started with me almost 30 years ago because I did the right thing for them. And I can sleep at night knowing this.
14
As a feminist and a male, if two prospective financial advisors were equal in every way in my eyes, I’d pick the female hands down, simply on the basis of the unbalance of males and females in the industry. It’s clear a lot men, and women, are not feminists.
5
Fire any financial advisor [male or female] whose compensation is derived from commissions on stuff he peddles to you.
If you hire a financial advisor, only employ one who only charges a fee based on time he spends with you.
Better yet invest in index stock and bond funds managed by a reputable company like Vanguard.
If you are tempted on your own to invest in commodities , recall the advice of one well known financial columnist
"If you invest in commodities you will lose money. That is all you need to know.""
5
The title says "broker"; the first sentence says "financial adviser". The former is a salesman. The latter ought not be, though people who call themselves advisors often are salesmen in fact. Many have financial connections to products they recommend, although they get no specific return from any individual transaction.
Professional societies for brokers and financial advisors alike lobby hard against assuming any fiduciary responsibility toward their clients. Keep your guard up.
12
So what if, over a certain three-year period, women investors outperformed men investors by 1.8% a year? If this is explained by the hypothesis that women prefer to invest in large-capitalization, less volatile stocks and men have a greater preference for smaller-cap, riskier stocks, there will be years in which large-caps will outperform small-caps, and years in which the reverse takes place, so neither strategy is necessarily or always better than the other.
Go to Portfolio Visualizer and compare an S&P 500 fund (VFIAX) with a smaller-cap fund (VEXAX, which includes mid-caps as well). Look at the period 2015-2017, which might be the period the Warwick study focused on. Large-caps outperform the smaller by 1.5% a year. But now look at 2003-2005, or 2003-2017, and there the smaller ones trounce the larger.
Consider firing any investment adviser whose data are confined to a single three-year period.
7
p.s. Ms. Francis at Barclays says, "taking a more long-term view about what to invest in, rather than picking eye-catching and potentially more volatile shares, is actually likely to provide a better return on your money." If that were true and publicly known, then investors would flock to the stodgier offerings, driving down the price of the high fliers until the expected returns of each came into equilibrium.
2
What happened to the dart-throwing monkeys? Didn't they perform better at picking stocks?
Economic growth and rising GDP has brought us an environment on the brink, with 12 years left to turn global warming around, and "democratic" systems in paralysis.
The financial industries play a big part in exacerbating inequality, and maintaining the status quo of capitalism. Good riddance to them when the chips fall.
6
First, ask yourself: Do I really need a financial adviser? What if I learned a little more about investing in stocks and bonds, and/or mutual funds?
8
Important article. I happen to call on Edward Jones as a life insurance general agent. I will tell you that here in San Francisco, 51% of their Financial Advisors are female in the footprint that starts at the Golden Gate Bridge and runs down to Carmel. This is progress. Additionally, the firm has a new Managing Partner (CEO), her name is Penny Pennington. Again, progress.
4
Statistics have shown, more or less irrefutably, that a portfolio consisting of a handful of dirt cheap index funds, with the dividends set to reinvest, will outperform more than 90% of professionally directed portfolios over any given ten year period. And that's before you factor in the all of the fees and expenses. The negative compound interest from those can reduce your long term returns by a third or more. That moves your odds of beating the index with active portfolio management into the realm of statistically insignificant.
Portfolio and asset management is a racket.
21
@John C.
"Portfolio and asset management is a racket." The big money boys are always timing and rebalancing and making money...
So racket for their clients, but not for them.
2
It's a very tenuous link drawn here between the returns of individual investors to advisers, which we have no data on, only that there's more males than females that are financial advisers.
Conflict is conflict, it doesn't know a gender. If you're hiring an adviser, the only thing that matters is that they're a fiduciary and use an evidence based process.
7
@Mark
evidenced based.....lol
The article states that investments by women outperformed those by men by 1.8 percent. This is a meaningless statement. It does not indicate a unit of time, say, per week, month, year, or ten years. Additionally, a few of the comments indicate that 1.8 percent is not that important. This is also meaningless. A quick check of the Warwick Business School link in the article indicates that the amount is 1.8 percent per year. A simple numerical example: $500,000 invested at an annual rate of 5% for 20 years grows to $1,326,648.85; the same $500,000 invested at an annual rate of 6.8 percent (5 + 1.8 percent) for 20 years grows to $1,863,781.76. For most investors the difference is not meaningless!
8
I am appalled by the NYT's brazen sexism in titling this opinion piece. Consider firing your male trader, huh? Do you even realize how you are playing into the hands of racists, sexists and religious bigots of all stripes? Regardless of the underlying causes (genetics, access to resources, being subjected to discrimination, etc..) there are racial, gender, or other classification based groups that may score lower or higher on certain metrics such as select domains of intelligence, athleticism, criminality, personality traits, etc.. Do you think it is a good idea to fire or discriminate against people based on these group differences? By publishing articles like these you are pushing men (especially the straight, white, and the native-born variety) further away from the progressive cause and rendering them more susceptible to the reactionary propaganda of Fox News and Jordan Peterson. I wonder what will it take for you guys to wake up. Re-election of Trump in 2020 perhaps?
39
@Steve
"Do you think it is a good idea to fire or discriminate against people based on these group differences?"
This article clearly supports this type of discrimination.
The NY Times having published this article even as an "opinion" piece does give it an endorsement.
8
@Steve
I wish I could recommend this 100 times.
2
The terribly sexist male-bashing has got to stop. The NYT Op Ed page now engages in the most sweeping anti-male generalizations on a daily basis. It is simply beneath a paper of the Time's stature.
This muddled, poorly-argued essay would be laughable if it weren't so typical.
And, for the record, nearly no one needs a financial adviser. Go to Vanguard or another no fee index mutual fund. In the long term, you will almost certainly get better returns on an after fee, after tax basis.
43
Why is the Times publishing opinion pieces that all for discrimination? Shameful.
36
Wow....you couldn't have scripted this better. Ms. duQuesnay, a female investment adviser, starts her article advocating for more female investment advisers, with comments about the issues of conflicts of interest in the financial services industry.
Is someone going to tell her or should we just let her sit on her throne of hypocrisy?
28
Men outscore women by 5% on the MCAT - I look forward to the NYT article suggesting that everyone fire their female Dr's and see a male Dr.
PS - yes - I know that is insane on so many levels.
43
Do male CEO s outperform female CEOs? Yes they do look it up. So therefore don't hire female CEOs? I don't think so.
25
Had the shoe been on the other foot and this article had been written by an old, white-guy broker, suggesting that investors divest themselves of their female brokers for the same reasons, it would have led to inexorable apoplectic language directed towards this misogynist. The feminists would cry hogwash and ask us to stop with the sexist remarks. The results are what they are and shouldn't be looked upon or tallied by a broker's sex. Ms. duQuesnay's remarks could be viewed as misandrous but I'll give her the benefit of the doubt and chose instead to view her as an amusing parlor room polemicist.
13
This article is a ridiculous leap of illogic, and says that one should choose the gender of their broker based on a study of household (non-professional) investors. The two groups are entirely different.
10
So is this the new standard? Let's compare performance based on sex in every profession and then only hire members of the sex that grades out best in the aggregate?
Wanna bet some professions will show men performing better based on objective metrics? Then imagine the outrage if this same standard was applied.
I get that the title was meant to be provocative, but it's also pretty dumb to advocate treatment of an entire gender not as individuals, but based solely on their chromosomes. Isn't that what feminism is supposed to be against?
30
I've seen the future and it's not female, it's sexist. Much like the past.
20
Can't see the bias many are writing about. The author quotes facts, checked by the NYT?, less than 20% of brokers are women and they out perform men by 1.8% a year. If you do not know this, 1.8% compounded over time is huge. Men trade more which generates fees for them and is generally unproductive. Seems logically.
5
The inflated egos of the Ritholtz advisors simply knows no bounds. How can this be viewed as anything other than a shameless attempt to drum up business, at the expense of a "scientific" study masquerading as reverse sexism.
The author's boss and/or supervisor should be ashamed at this opt-ed
8
Perhaps because the Times fired so many of it's copy editors there was no one available to save it from the headline and framing here. The subject is important -- gender discrimination in the financial services industry is a significant issue, as it is in corporate America generally. But the faux-provocative posture and anecdotal generalizations more undermine than support the case for women in the industry. While I agree that decades of acculturation lead men toward arrogance, bad advice is available from anyone, regardless of sex. Financial services companies could improve things for women -- clients and employees alike -- by identifying and abandoning the internal, everyday organizational structures that restrict women's access to leadership opportunities.
9
Consider firing the columnist who wrote this op-ed. Can you imagine what the reaction would be if the headline were to say something this outrageous about women, as a group? Or about a particular race, as a group? Why is it OK to have an open season on males? This is truly getting out of hand.
16
I, too, am surprised that female investors outperform men -- especially since it's been proven again and again (famously by the Financial Times, Vanguard, and Saïd) that the entire industry of investment professionals has consistently under-performed broad indexes. Not only. They lower returns net of direct cost, worsen risk profiles (Sharpe), and increase account turnover (padding their own wallets). How much does the consumer lose? 5%, according to Andreas Hackethal's notorious metastudy.
So... Go, girls?
I see we also fail to mention that women control 85% of consumer spending and make 70% of financial decisions. In the US, they control 60% of personal wealth and own the majority of stock.
As Forbes's Bridget Brennen reminds us, "Gender is the most powerful determinant of how we see the world and everything in it. It’s more significant than age, income, ethnicity." I'll be sure to add that remark when I forward this article to my black friends, who make up 7% of both STEM and finance workforces. (Women are 51% and 50% respectively.)
White families' median worth is $171,000. Black? $17,000. One in five of those is less than zero. But by all means, that disparity would have nothing to do with 2008. No, no, it's "testosterone-tinged frenzy."
But let's not mention race. No, let's compare classical music! Find me a good argument against that.
In other words:
Dear New York Times: I love fresh mint in my mojito just as much as Sarah Jeong does. But COME ON.
The title should be "get rid of your bad broker".
Having the gender bias is not helping anyone.
6
I would happily have a female investment advisor. And I'm all for more female brokers.
But this outrageously sexist and offensive piece tells us more about the times we live in than the relative strengths of male vs female investors. It is perfectly acceptable to claim that women are innately superior at something (anything). It is not okay to cite robust evidence that men and women differ in their interests, slightly in their personalities, or have slightly different cognitive strengths. But here the writer--on the most slender evidence--makes a dubious argument that just happens to coincide with her bottom line.
The author's behavior is transparently unethical, but as long as it finds the right target--men--it's fit to print in the NY Times. Yet another reason I will never renew my (former) lifelong home delivery to the Times.
13
The never-ending barrage of anti-male propaganda and self-serving "think" pieces such as this will only serve to push formerly-mainstream males out of the left.
That the answer to every question is to fire or prosecute a male has destabilized the culture.
And it looks like there's no end in sight.
10
This is a silly article, because it is clear that the skills necessary to be a high performance INVESTOR are different from those to be a broker, registered rep, financial consultant/adviser or whatever else one wants to call these salesmen/saleswomen. Maybe smart women in finance don't want this obsolete job, so who is left? Is the writer a broker? Or, is she a registered investment adviser, which is a different thing. If the former, she is just tooting her own horn.
2
Hire the financial advisor who works best and has your best interests at heart, male or female. Someone who listens to you, answers your questions, treats you with respect, and can boil things down to your level if you're unfamiliar with the terminology, whether they are male or female. It's like choosing a doctor or lawyer. Some doctors and lawyers who are women have the arrogant, dog-eat-dog competitive mentality, and some doctors and lawyers who are men have the more nurturing, helpful, cooperative mentality. The point is, don't generalize based on that person's gender; you could be completely wrong and selling them short.
3
this brings to mind Suze Ormond who is fond of telling how she broke into the business: A male broker treated her unethically and she decided that she was getting into THIS great business herself. Then she went on to become a TV star and launched a credit card business that ripped off legions of people who thought a woman would never play them like that...
1
The authors cites, “A study by the Warwick Business School concluded that women outperformed men at investing by 1.8 percent. “ That 1.8 % is additional return over the returns of the average for males. That is a huge number when compounded over decades. Pick a number like 8% returns, now compound the return at 9.8% over the same time period. I’ve spent over 30 years on Wall Street and this article is spot on.
2
What a flawed study and conclusion. If only 1 in 5 investment advisors are women, it means that we can only compare the track record a few women (20%) vs. the many men (80%). Given that, the few female advisors are likely better, or at least equal to their male counterparts, because they have to be to achieve their position as a minority. Obviously there should be more female advisors. Until we have more equal numbers of each gender's advisors, conclusions based on lopsided data will provide only lopsided results. In the end, the advisor who listens to you and provides high quality results, at a fair price, is the one you want. Vanguard can do already this with no direct advisor, or gender discussions required.
I look forward to an article in this paper identifying a profession that's predominantly female but claiming that men are actually better at it than women, and waiting for the inevitable cries of protest. But I doubt that anyone would even commission such a study at the risk of being accused of misogyny.
Encouraging women to become brokers and investors to hire them is appropriate. Suggesting that women are better at men in investing sounds like something that a female version of James Watson would say.
6
When I think of women, I think mainly of my wife, who in 40 years of marriage between us has rarely deemed it necessary to write a check, look at a credit card or bank statement, prepare our taxes, or scout out a stock for possible investment; preferring instead to leave these odious tasks to me, notwithstanding my considerable objections, first and foremost among which is the fact that I am not planning to live forever and would like her to be adequately prepared for that eventuality.
I have known a fair number of women who acted for years as if they were married to a man like me who took decent care of their finances, but later discovered that he did not. I wish many more married women made it a point to handle their own finances
2
Here is some much better advice, and it's free to boot!:
Things to avoid as an investor:
Active management/advisors of all kinds, regardless of whether they are male, female or any of today's myriad newfangled genders. They are very good at making money--for themselves, and at your expense.
Investing in individual stocks and bonds. No one, ultimately, is smarter than the market. Individual stocks heighten your risk but don't increase your expected returns. Stick with broad low-cost index funds.
4
@J.: I'm surprised to see the advice to avoid investing in individual bonds, if that includes government bonds. Corporate may be a different story, but what's wrong with investing in individual government bonds?
2
When I think of women, I think mainly of my wife, who in 40 years of marriage between us has rarely deemed it necessary to write a check, look at a credit card or bank statement, prepare our taxes, or scout out a stock for possible investment; preferring instead to leave these odious tasks to me, notwithstanding my considerable objections, first and foremost among which is the fact that I am not planning to live forever and would like her to be adequately prepared for that eventuality.
I have known a fair number of women who acted for years as if they were married to a man who took decent care of their finances, but later discovered that he did not. I wish many more married women made it a point to handle their own finances.
1
... to a man like me who took decent care of their finances....
1
This is great, it illuminates the fact that men and women sometimes perform differently in their work, and I hope that city government is thus inspired to take notice of data showing that female firefighters and police officers perform less well than men in the same jobs, and therefore should be promptly fired.
2
How refreshing to hear someone finally declare that innate gender differences constitute a valid reason to prefer to hire one gender over the other! Surely now we can dispense with the antiquated notion that equal representation in the workforce is necessarily just or desirable.
5
My brokers for years were men. I got transferred to a woman after a retirement and my female broker did more for me than any of the men. After she left I got handed back to men with suboptimal results. Again now back to a woman who contacts me and discusses options and so - back on the top again. She actually listens.
I think women try harder to obtain and more importantly, RETAIN, clients, maybe because they have to.
I am a retired physician from the days when it was a tough slog to get in and then you had to prove your worth. Not like now when men have deserted medicine because it is an expensive education that ends mostly in salaried work for a conglomerate and mediocre pay. So the men have moved to finance and tech and the women have filled the 50% gap in a now lesser paying and less prestigious profession.
No I think the women try harder because they want to gain a foothold in finance but they have to prove themselves first, so they make that extra effort Nothing is being handed to them.
4
I learnt in my late 20's that financial advisors offer very little and add unnecessary hidden costs. Fidelity, Vanguard and many other reputed firms offer all the self-help you need to save for your goals. Index funds with low costs with an appropriate mix of stocks and bonds can satisfy most people's needs.
6
Hiring a financial advisor based on their gender is not to be recommended--and isn't recommended here. But hiring one with the tendencies favored by female investment advisors seems to be a smart move, one that can pay off substantially over time. There's plenty of advice in this piece on what to look for in an advisor of either sex. Don't put up with nonsense from any of them.
Goodness, go modern! Drop the broker altogether, just decide on an allocation(equity vs bonds) and use index funds.
9
Identity politics: i deserve privileges and access because of my gender, color of my skin and because i am special. Also, the publisher and the editorial board of NYT support me:
"Whatever the paths taken, the future of finance should be female. .. Find me a good argument against that."
#OnlyMe
8
Who can imagine the NYTimes publishing an article with the reverse headline about considering firing your female broker? No one. I submit that this sex bias, acceptable under generally acceptable political correctness, helps explain why a lot of folks voted for a presidential candidate who made political incorrectness his signature trait.
12
Simple solution: Don't use a broker as a financial advisor. If you need a financial advisor, get one and make sure that they have a fiduciary responsibility to represent your interests. Also, make sure that they do not gain by selling you any particular financial product or gain commissions by buying and selling your assets. Another option, put your money in a total stock market index fund and take the market rate of return. You will do better than at least 50% of the stock pickers at virtually no expense. Also, don't be an idiot by buying high and selling low.
1
Articles like this are the reason he (you-know-who) won.
15
Dumping your money into a couple of total market index funds at Vanguard is almost certain to beat both genders handily. Boot your "broker" people - you can do this stuff yourself.
Robert Bradley
Author, Investing in Four Hours
8
After rereading this column, it is even worse the second time through. It is built on stereotypes (for example, men are reckless, women are thoughtful) that collapse under their own flimsy weight. I am surprised that the Times saw fit to publish this.
21
I don't mind receiving the information because I like data, but the click bait headline is seriously sexist.
3
wondering if there is a further breakdown by race? Are Black women better brokers than white women? If so, are Black men also better brokers than white women, or are they the same? Where do Asians stack up, by gender?
9
Sexist. Another shot fired on the war on men.
11
My sense is that there would be a regression to the mean, as more female brokers appear on the scene. I have nothing specific to back that up. And I have reason not to support more women entering the brokerage business.
@JSK
I meant "...no reason not to support more women..."
If you're trying to beat the market, you are a moron. If you're paying for a broker to actively manage your account, you are a moron. Don't be a moron. Get a (much cheaper) robo advisor like Wealthfront and sit back and let the market do it's thing.
3
What a strange opinion column. I thought the NY Times is against the idea of gender discrimination?
9
This opinion piece is deeply disturbing on multiple levels. While the author presents data in favor of a small statistical difference between genders, that margin is insignificant compared with her blatant, offensive, sexist, and self-serving advocacy of using female brokers like herself. The NYT should not allow this type of advertising while posing as an a data-driven opinion piece.
13
@Olympia Hand
That “small statistical difference” is an additional 1.8% return annually over the average return of males. 1.8% is a huge number when compounded over a decade or two.
2
Could you give a further breakdown based on race, religion, sexual orientation so I can make a more informed decision? Let's go full bigot.
15
NY Times editorial board- please knock off the reverse discrimination and identity politics. Thanks.
19
Come on, give the author a break. I don't see how she's being sexist. She's just reporting on a study by a third party. Which reminds me of a similar study a year or so ago about female doctors providing better outcomes for patients and their male counterparts. These are studies - they are not recommendations as to who you should do business with.
Also how about tying a broker's compensation to their clients performance? Right now, brokers are compensated even when their clients are losing money.
2
Is this serious? An op-ed by a female broker saying to fire men and hire her? The Times is becoming a self-parody.
20
That horse has already left the barn.
1
On the one hand, having read the NY Times for years, I don't think there's been any article about women that hasn't garnered its share of sexist comments and attacks, no matter the topic. It's getting to be dismally common place. On the other hand, the tone of the article could have been changed to incite less such comments.
In another comment I did write about using index funds, without advisors. However, I'd also add that it was Warren Buffet who stated that he was only deemed a "wizard" of finances because during his most active years, he only had to compete with 50% of the human race, since women were often barred/ discouraged from financial positions. And on another level -- board composition -- boards with more women have been shown regularly to have better returns on investments, less legal/ ethical entanglements, etc.
(I don't see this so much as women on average being better than men but when a company is more open to talent in general without meaningless barriers, they will pick up and retain those individuals who are just heads and shoulders above everyone, regardless of sex/ gender or other factors which really don't impact performance.)
3
Wow. I'm strongly reminded of the Southern Poverty Law Center's definition of a hate group: they "have beliefs or practices that attack or malign an entire class of people, typically for their immutable characteristics". I wouldn't be surprised if some survey found a 1-2% difference in performance in Black, or Hispanic, or Asian, or LGBT brokers as well, either positive or negative. But to assign that difference to some innate, immutable characteristic that defines the membership of the individuals to that group, rather than mere coincidence or societal factors, is the very definition of bigotry. Forget the specific performance of the individual in question, they must be subpar because, in this case, they possess a Y-chromosome.
Not to mention the self-serving nature of the author's promotion of herself based solely on her gender rather than her track record.
20
"Find me a good argument against that."
OK, here's one:
It is sexual discrimination.
21
We should probably note that the investment period of the research was a three year period ending in early 2018, (i.e., a bull market).
This would mean that if female investors beat male investors during this periods, it was because they were making riskier (higher return) investments than men were during that period, not because of some claptrap about family investments vs. lottery ticket investments.
3
Investing in anything besides index funds is gambling. And a you don't need a broker to invest in index funds. Actively managed funds (i.e. with a broker) do worse than index funds.
5
@Tundra Green, that's Boglehead theology, and mistaken. Index funds are great on the way up, lousy on the way down. I think you may get a chance to experience that fact in the next year or so. Watch what the more risk-averse actively managed funds do ... and weep that you kept holding your glorious market-cap index.
Second, you think you have to employ a broker to invest in actively managed funds? Hurry on over to Investment 101.
The liberal need to perceive low-income people living in rural areas or with moderate politics on social issues as racists (the "real 47%", etc.) may have helped itself along through precisely all of that sneering. People tend to react, sometimes poorly, to ugly stereotypes. It's easy to poison a republic. This article oozes an all-too familiar addiction to sneering. So maybe I'll draw my own ironic conclusion: could it be that the author would like to see the re-election of the guy responsible for that tax break?
1
Fire your broker, period, The (male) broker who handled my investments for a decade called me “dear” and talked about himself incessantly when we were supposed to be talking about my money. He told me what he was going to buy and sell, rather than suggesting. He placed excessive trades for the commission. He talked over me if I questioned him on anything. He explained nothing. Ever. I fired him after he lost me tens of thousand of dollars on several stocks that tanked rapidly (two of the companies went bankrupt) while he wasn’t paying attention. I should have fired him years earlier. This is a business that is brimming with charlatans.
101
@Passion for Peaches The guy sounds like a dope. But you should be glad you have enough dough to throw around in this fashion.
4
@Passion for Peaches
Sounds like he did his job well - making money for his company. And you fired him for that?
3
You are promoting gender discrimination and seem totally okay with it.
To be honest - I'm totally okay with it. It's exactly what people and companies should do, even if it means google hiring only male engineers because they are better at it based on scientific studies (I'm not stating it as fact, just using it as an example). I just find it strange that any time gender discrimination is talked about in the major media, it's about how we can never use data or scientific studies to justify why men can have an advantage over women, but now it's okay to use the same to justify women having more power over men.
Perhaps we've finally come to the point where we can just talk about it openly and honestly and finally admit that men and women are better at certain things, but I doubt that.
3
The author is confused at the difference between a Product Portfolio Manager and a retail Financial Advisor. The Guardian article that she references shows research about fund managers, those that pick stocks on an institutional level. She then draws a direct correlation to Financial Advisors who are responsible to help retail investors buy products through a brokerage. The author is misunderstanding the very basics of her argument and makes it very hard to follow anything further. Invest with someone that you trust at a brokerage that you trust. That's the answer.
3
@Peter
.... then she cites Neil Stewart's "research" that references returns of individual investors (i.e., neither Financial Advisors or Portfolio Managers).
It's like comparing apples to oranges to pianos.
2
My husband and I have had the same male financial adviser for over 20 years and have been completely satisfied with his integrity, his performance, and the performance of our investments. I am a feminist and support equality in the professions, but I also resist sweeping generalizations when my personal experience does not support them.
270
@Rebecca Hogan You do realize that these conclusions are based on data that shows higher returns from female brokers, *not* personal anecdote? Anecdotes are not data. It's great that you've had a good experience with your male broker. But these are not sweeping generalizations based on nothing. By all means stay with your broker since you have found a good one. But also listen to the data--it is meant to *challenge* generalizations (the one in which men are by default seen as better at financial matters).
89
@Rebecca Hogan Anecdotes are not data, which the author cites in spades. Also, have you actually measured the performance, after fees and taxes, of your investments against benchmarks? I know lots of people who claimed to be satisfied by their brokers but when pressed it turned out they were paying high fees for sub-par returns.
34
@Daniel
The data is a 1.8% difference among a smaller sample size. This is not statistically significant.
And it is a sweeping generalization to state, "While gendering any ability or trait can make people uncomfortable in these forward-thinking times, which sex seems better equipped to help families nurture and protect their nest egg?" (And I love how she provides a disclaimer in the first half of the sentence in order to give herself permission to promote gender stereotypes is the second half of the sentence.)
37
FYI.
I had a female broker, for a short period of time.
She hardly ever answered questions.
She had no idea of what was going on.
She became angry when I asked pointed, relevant questions.
After a few months of weasel wording, I cancelled her, and went w a different, male, broker!
45
@westerner246 maybe it wasn't about male-female, just bad or good brokers
4
I read essays like this watching like a hawk. But except for your overly broad conclusion, “... the future of finance should be female”, I don’t have much of a problem here. Even that conclusion riffs on a phrase from popular culture, so you may have phrased it for effect rather than meaning it literally.
Hopefully you’d agree that, with amoral buccaneering, the amoral and the buccaneering can be analyzed separately.
Start a brokerage. Advertise good customer service and a contractual commitment to transparency and fiduciary duty. Hire talented women and men who are committed to those principles. Have men and women analyze risk together and agree. My blessings.
Analogously, I think American physicians today (if not rushed) often communicate better than the men born 1900-1920 who practiced medicine circa 1950 - 1975; I think more female doctors is one reason, but both male and female doctors generally communicate better nowadays.
Contrast this essay with Jill Filipovic‘s latest. There’s the subtle pattern: the true statement, a few paragraphs on a plausible unproven assertion, then the pivot point associating something good with women or something bad with men. Next thing you know we’re reading about authenticity, self-aggrandizement, and the relationship between individual effort, group effort, and the knowledge and infrastructure we’ve inherited from the past in gendered terms. Oh please.
1
So what? Wall Street remains a sewer/casino rigged against small investors and anyone else who naively trusts it to be an honest enterprise. It doesn't matter the sex of your broker, sooner or later you will lose your money anyway.
2
I wish Ms duQuesnay had supplied more information about how she reached this conclusion. I actually follow links to try to get to the original study or, better yet, the raw data. I followed the link to the referenced "study by the Warwick Business School" (https://www.wbs.ac.uk/news/are-women-better-investors-than-men/), which provides another high level summary of the research, though it does have more information. I wasn't able to get at the raw data or methodology but it appears that this study tracked male and female investors at Barclays over an unspecified 36 month period. The name of the publication or study not provided.
I tried going to Neil Stewart's publications page. Unfortunately, it isn't obvious from the titles what publication reaches this conclusion about male and female brokers (perhaps this wasn't published formally?)
Unfortunately, I can't get answers to even basic questions, like whether women are getting a 1.8% high return on stocks, or whether women are getting a return that is 1.8% higher (is it WR = MR + .018, WR = MR/1.018, neither?). I also am unable to determine if stock performance in this 36 month window was unusual, which could be relevant (was it an unusually good time for conservative investing, risky investing, neither), or whether Barclays investors are typical of how Male and Female brokers invest more generally.
The research could be good, I really couldn't say, and the NYTimes isn't much help here.
7
Talk about an archaic approach. Choose your advisor by gender. Everey investor should review their results anually, if there are consistently poor results, that can't be explained then make a change. Gender, race, sexual orientation should play no part as to who you decide to do business with. I'm surprised the editorial board allowed this self serving, free advirtising to be published.
4
While I am sure some or most of your arguments put forward are reasonable and likely true, I find very troubling this flagrant piece of self-promotion. It is both shocking and truly remarkable.
That said, I was on the "front lines" for 23+ years in securities fraud and SRO arbitration (am now retired). I have not only heard of "horror stories" I lived them with my abused clients on a daily basis.
I concluded some years ago, and wrote extensively, about the commission chase that caused too many brokers to fail to put the interests of their clients first.
Changing the way in which retail-based financial professionals are paid would go a long way to limit investor abuse irrespective of gender.
6
@Paul Young You are shocked at someone from Ritholtz self-promoting? Say it isn't so!!
My advice would be this: If someone urges you to discount a huge number of potential investment advisers based purely on their gender, on the strength of a study that shows a 1.8% differential in returns, that person may not be the cleverest person around.
18
If financial advisory firms hire the top 20% of women and the top 50% of men, it is a mathematical certainty (if men and women perform equally) that the women hired will, on average, perform better than the men hired.
But the fact that someone is a woman is no guaranty that she will be good, nor does the fact that someone is a man mean that he won't be. Anyone that hires a financial adviser based upon race or gender is likely to get what they deserve.
13
This is helpful advice, but you could make these important decisions easier with more info. For example, even though the headline advises me to consider firing my male broker, it offers no advice about my broker's ethnicity. Please let us know which ethnicities make the best financial advisors. Oh, and what ages are those who have the best track records. Also, do meat eaters have a better track record than vegetarians?
19
It seems fair to say that this self advertising letter to the editor should not have been published by the NYT. There may well be something to the issues raised here, but even if true, the basis is not known. Maybe the smaller number of women who work in this area reflect higher barriers to acceptance, making them superior. However, on general principles, this type of self promotion is not acceptable outside paid advertising. Many have pointed out that if the article claimed that men were better at this than women, it would never have been published. What if it had claimed that only advisors of Maylasian descent or perhaps transgender individuals were good at this, would we see it differently. The success of absurd claims, followed by anecdotal confirmation, "yes, we have been investing with a one-legged fellow who smokes weed all day and we have never been happier" should make us all suspicious of such light fare.
12
@WHM
WHM: Disparaging trans individuals? There's still daylight left for you to comment on other articles to needlessly work them in.
Never fired my male broker because I never hired one. Mine was, is, and always will be the woman I know and trust to help me manage my investments. Sorry, dudes.
2
Hiring a broker based on gender is the riskiest bet of all.
11
@Alex Mozell I didn’t hire her based on her gender. I hired her because of all the financial advisors I interviewed (10 to be exact), she was the only one who asked me -- before anything else -- “What are your goals for your investments and how comfortable are you with risk?” All the others I interviewed (who just happened to be men) said “Oh, that much money, eh? Well, you should go into bonds/equities/munis/mutual funds/etc.” without asking me anything. One guy talked the entire hour that I sat in his big, fancy office never asking me one question other than how much I had to give him to manage. I wrote a letter of complaint to his manager who promptly tried to lure me to HIS client list. One even suggested that I not worry my pretty little head about complicated stuff like the stock market (I have an MBA in Finance and work in the field). So, yes, my advisor is a woman. Not because she is female but because she is my respected and respectful partner in my financial future. Sexist? No. Smart? Yes.
I just read an article that said monkeys are better at picking stocks because they chose randomly so I am looking for a monkey investment manager.
12
Back in the seventies - when I had just graduated from conservatory - I began working as a musical contractor for small groups and organizations --
They would engage me to hire a compliment of players - usually a small orchestra - to provide instrumental music at a concert or gala event --
It was my job to personally hand-pick and hire each individual player for a specific chair in the ensemble --
Having just graduated - one could understand that most of the players I knew were friends and fellow-students I knew from school - and was inclined to use that pool as a source for my musicians -
The problem arose when one of my close friends played an instrument I needed - but I happen to know someone else who was a much stronger player -
As I grappled with this personal conflict - worried about how my "friend" would feel being left out of the job - I mentioned it to another musician who had many years of experience ahead of me - and whom I greatly respected -
His advice was simple, direct, to the point - and unarguably logical --
He told me -
"You hire the best player available." --
As much as I wanted to hire my friend - I did hire the other, stronger player instead - and have stood by that ideal since then -
Sometimes the better player may not available - so then you have to go to Plan B - but you always begin with Plan A -
I should be quick to point out that many of my "better" players were - and still are - women - who's playing raises the level of the ensemble...
2
"The research indicates men regularly exhibit overconfidence in their ability." The key word is "indicates"; I don't know how researcher can demonstrate that it's specifically their gender that makes them do this, but unless and until such work is done, there's a confirmation bias at work here.
4
You're on dicey moral ground when you start with a statement like "Research shows that, on average, people from group A are better at such-and-such than those from group B" and then suggest that people make decisions on the basis of that statistical research. We are justifiably appalled when such arguments are used against women or ethnic minorities. For the sake of consistency, we should not allow it to be used against men, either.
37
@Mike
Stewart's research isn't published or peer-reviewed, which makes the claims even more suspect. Sweeping conclusions like the ones in the article require deep skepticism and scrutiny and unfortunately, it does not appear this has taken place.
17
Interestingly, neither of the studies that are referenced referred to brokers or advisors at all; they reference clients investing their own money. The extrapolations to brokers and investors (and the related anecdotes) are not supported by the research cited.
9
@JSD But are you certain the correlated research would NOT support the extrapolation? Before you slam one set of data as false, be prepared to present another that prove your case!
@Debussy
I'm not claiming anything other than that the research does not support the author's conclusion.
Who knows? Maybe it's true and we could devise a study to test it; however, the evidence presented doesn't tell us one way or another.
4
Don't hire a broker at all, and dump your dough in low-cost index funds from Vanguard (or Fidelity, etc).
7
@J:
There is a cult of "Index Fund Investing" which is based on misleading statistics.
In a nutshell: Index funds are promoted as low-cost vehicles which save money by having low fees because no research is required; they just follow a selected index. Managed funds cost more because there are stock picking and trading costs. Which is better hinges on whether the low cost more than compensates for the expertise (and cost) of the fund manager.
Some of the claims supporting index funds which I have most often heard are that index funds beat most managed funds in most years and that there are no managed funds which always beat the index.
While both statements are statistically true, they are irrelevant. Most investors are in it for the long haul as their money is in retirement accounts. Managed funds do not have to beat the index every year to return a better result for investors; they just have to out-perform the index funds often enough to be positive over time.
My wife and I have two managed funds in our retirement accounts. The first we selected 30 years ago when we started investing because my wife liked their investment strategy. The second I selected 25 years ago because its investment strategy seemed more stable.
Neither fund beat the index every year but over the years that we have owned them, they have equally well outperformed the index fund which we have in our taxable account.
1
@Allen
Show me any manager who has consistent alpha over their index. It doesn't have to be every year; just an average better return than a passive fund. I know they must exist by naked chance alone, but guaranty that they comprise less than 1/(2^N) of the industry (N being the periods above the benchmark).
BTW, wouldn't you expect accounts that don't have to make tax-sensitive investing to outperform taxable accounts (passive or active)?
3
I have a female investment advisor. However, I have always made my own investment decisions. I avoid mutual funds/index funds. I prefer to buy single stocks and stocks with dividends. I've done okay.
I get a Motley Fool newsletter. They are excellent stock pickers.
1
Before investing, understand the market. When invested do not blindly trust your broker regardless of sex. Ask for detailed summaries. Keep track. Read the news. Understand volatility. But most importantly--if someone promises you a return to good to be true...it isn't.
2
I'd like to think that in 2019, I wouldn't see an article in the New York Times that directly, explicitly encourages discrimination. Apparently that's too much to expect.
The commenters have much better insights than the author. The study cited only shows a small differece among *investors*. It may not be statistically significant, and investors are different than pros. If the difference is real it is still an average saying nothing about an individual's ability. It is wrong to make hiring decisions based on stereotypes. It's amazing the author could be this oblivious to the irony of her advocacy of gender bias in hiring? And finally: about 95% of active investment managers do worse than the S&P 500 index, by that logic you shouldn't be hiring men or women for (inferior) active management. An algorithm that by construction takes no risks at all beats nearly every active investor - for reasons having nothing to do with who has the Y chromosome.
10
I grew up in this industry, as a child in the late 60's and 70's I had a birds eye view. Despite the evolving discussions over gender and bias, much of this article is spot on. A close female relative who worked for years on the operations side of the business and therefore may have been more qualified was consistently turned down for the opportunity to be a broker herself. At the time the branch manager had power to say whether or not an individual could sit for the exams. Women were encouraged to look pretty and bring coffee to clients.
People would likely be surprised to know that it is not much different today. One cannot just decide to go into this business. One must be sponsored by a brokerage house, see how tight the control of who gets in is still in place?
The power structure of men over women then within the local office let alone headquarters of most name brand brokerage companies made the Me Too movement look like child's play. Attend a 5 day brokerage company meeting at a 5 star resort today and you'll see one woman for every 50 men. The female relative was permitted to sit for the exams after the manager retired, and she killed it, became a top producer in the area and her clients of 30+ years over flow her mailbox during the holidays.
5
In the age of Schwab, index funds and internet trading the need for a broker has greatly diminished. Everybody should educate themselves about markets, by reading financial
Periodicals ,watching financial tv shows etc broker or no broker. The best thing a broker can do is to prevent you from doing stupid I.e.
Putting all my assets into marijuana stocks. A lot of people when left to their own devices will
Harm their portfolios. A broker WITH ENOUGH
EXPERIENCE in the markets may prevent that.
Easy fix: do you OWN research & investing. Cut out the middlemen. You don't need brokers (and I WAS one in a previous life). You need to educate yourself (thanks, Internet!) about your options, stop trying to time the market (it never works) and don't fall for fast bucks schemes (they never work, either).
7
Aside from the obvious sexist slant, I'm surprised anyone still uses a broker. I thought they were pretty much automated away by Schwab and Ameritrade in the 90's.
6
The correct answer is fire all brokers regardless of sex. Go index funds Low cost. Tax efficient. Brokers add less than zero value. They cost money with no return
10
Just fire your broker. Period. While female investors might outperform male investors, there is no empirical evidence that brokers of any gender play a positive role in performance.
12
Just about everybody commenting seems to be getting up in arms about identity politics and whether there is bias in the article instead of the real issue that financial advisors and their high-expense funds always under-perform the indices over the long run, with or without their trading costs and fees. Fire your financial advisor, regardless of his/her gender, and put your money in stock & bond indices.
4
The simple fact is that no matter who your broker is you should probably fire him or her.
Brokers charge a fee, typically 1% to 3% of your portfolio, per year. Research has shown over and over again that most stock pickers cannot outperform the market, and if they're taking a bite as well you're losing a lot.
Investing in index mutual funds or ETFs with very low expense ratios (<0.5%) will give you a tremendous savings which can be reinvested, and you will usually perform at the index, which is fine for most people.
It's a dirty little secret in the wealth management industry: What do brokers keep in their own retirement and investment accounts? Often, it's a lot of low-cost index funds :)
10
@Ben
I think you are thinking about investment advisors with wrap-fee programs. Brokers charge commissions per trade, not periodic fees.
1
@Ben "A stock broker is one who invests other people’s money until its all gone.” — woody allen
2
All excellent points.
However, my wife and I don't rely on a broker or financial advisor; we prefer to make our own investment decisions. Our accounts (IRAs and otherwise) are self-directed. Might we have done better with a woman financial advisor? Could be, but we're happy where we are (and I retired a year ago and my wife and I all moved our accounts to Fidelity where all our accounts are self-directed.)
But I understand that not everyone has the interest and time to be comfortable making all their own decisions.
2
Facts and clarity matter. Is the reported 1.8% better performance 1.8% more return on principal, which would be excellent, or 1.8% more return, which would be insignificant?
1
@RayU
It is percentage above the FTSE 100. You should note that Professor Stewart's research suspiciously has both genders beating the benchmark average, which clearly cannot be the case. It makes you wonder about the research and sampling methodology.
2
@JSD
Thanks for your answer. That does help, and I see that some this information is supplied in the link provided from Warwick Business School (though the baseline itself is not provided, and because the specific timeframe of the study isn't provided, we lack context for the difference in return).
One thing - the study was limited to "male and female traders at Barclays" (no further information is available on how many were studied or how they were selected), so it is possible for both male and female traders to beat the benchmark average. Though this does of course raise the question as to whether this is a representative sample of male and female brokers in general.
Also, this was limited to a 36 month period, and dates are not supplied (so we don't know if the market favored on style of investing over another during this period of time).
@Jeff
You are correct that theoretically a sample could beat a benchmark over finite period. However, he is claiming this for a sample of thousands (over 36 periods). If my statistics are right (and it's been a while) that is somewhere in the 4-5 sigma territory (.0001% territory). Also, if you factor in commissions, it would contradict most everything we know about managed v. passive.
In other words, if it were correct, we should basically just close up the investment advisory industry and follow Barclay's clients.... Or better yet, arbitrage the FTSE by shorting it a gazillion times to long the Barclay's customer index.
Occam's Razor may suggest that Prof. Stewart chose a funky sample to draw his conclusions.
2
My default for any professional role is to hire a woman. Doctor, accountant, dentist, etc. Obviously there are individual variances, but on average I believe it's more likely an equally qualified woman will listen more carefully than a man.
8
@Scott Douglas
That seems a very prejudiced approach. What is your default for hiring a black vs white. How about Jew versus Gentile?
3
You have to wonder if Sarah Jeong approved this op-ed for publication.
13
It’s gonna be a wild and overdue and, frankly, enjoyable ride watching every aspect of our systems of living be reviewed, rethought and rebuilt, hopefully, outside the patriarchy and in a more realistic reflection of reality. Not to punish men, not to boost women but to give everyone a chance to be all of themselves regardless of sex.
9
How would this play, if the headline instead recommended, "Consider Firing Your Black Broker" or "...Your Jewish Broker"?
The op-ed is precious, the self-serving marketing blurb of a bigot fishing for business. A fine job of mansplaining, by a woman!
59
I read this column twice. I work in the business and support a multi million dollar team of 2 Financial Advisors both men. Not a word of what's written here comes close to the team I support. If anything the wives are always included when financial decisions are being made they also take part in F2F meetings as well. In fact we insist that the spouse's are present and fully understand what is going on. As for the widows. We hold hands, become their sounding boards and support them fully. I'm sure there are advisors out there who fit the bill but in my 25+ year experience in the industry I have yet to see this type of behavior.
6
@Margo Channing "If anything the wives are always included" Are husbands included too?
Who needs advisers except to hold your hand?
Warren Buffett, the world's great investor (by results), has said for his widow (who has no financial expertise), he would recommend her trustee buys as S&P 500 index fund, which has a very low overhead 0.06% where advisers charge 1-5% of the investment or else $100s/hour.
Many good studies show on the average no broker can consistently beat the market.
90 years an investor asked has his broker at the yacht club "where are the customers yachts?"
Females are not as greedy as males.
6
Anyone who has the sense to hire a female broker to avoid aggressive over-trading and the other abuses described here will have the sense and knowledge to avoid brokers and their high costs altogether and invest in index funds. Ms. duQuesnay suggests that there is a binary alternative, ignoring the fact that female brokers are in fact the middle path between two extremes, the hyper-aggressive (usually male) active investor, and the boring passive investor who invests in indexes and minimizes costs. There are relatively few investors who want the middle option, the active but conservative broker.
.
So there's your argument against female brokers. If you don't have inside information (which would be illegal), an investor will make the maximum returns bypassing all brokers and investing in low cost passive index funds, either as mutual funds or as ETFs. If I had to have a broker, I'd want a female one, but I choose to avoid brokers and their fees altogether. Brokers are paid, by those who chose to employ them, to pursue the testosterone-fueled mirage of a quick and easy buck; how appropriate that most are male.
6
The slight performance edge, might also be due to the author's own statistics. If 80/100 advisers are male--that's a much higher probability you will get a bad one. The 20/100 women are those that REALLY want to be there and succeeded. I don't buy the fact that the industry still discriminates ridiculously against women anymore. I do however, totally buy the argument that financial services careers just aren't as attractive to women in larger percentages than men.
8
Fire your broker regardless of gender. Women may outperform men, but neither, on average, outperforms the market.
1. Figure out your risk tolerance by imagining your equity position down 50%. That's your equity versus safe stuff allocation.
2. Buy the broad market as cheaply as possible.
3. Put the rest in short-term treasuries, CD's, cash.
4. Rebalance on a time basis, out-of-balance basis, or both. This is not so easy as you will be buying when others are jumping out of windows, but carry on.
5. Ignore the financial press and live your life. The financial industry is just a sales and marketing exercise.
Disclaimer: This advice carries no warranty. I'm not a financial expert, but I've read plenty of them: Swensen, Bernstein, Phau, etc. and don't forget Michael Lewis for the inside scoop on how corrupt the industry is.
17
@Xmeyer,
Very well stated!
@Xmeyer Not to say that there is no corruption on Wall Street (or anywhere for that matter) but Michael Lewis is a great fiction writer.
Stocks follow a random walk. There is a lot of other research that a person cannot *consistently* beat the market. According to the study, women have beaten men by 1.8% over the last three years. If women are more cautious when investing, it is likely that safe stocks have returned more highly during this time - but the pendulum will inevitably swing the other way.
A better idea is to fire your broker and get into ETFs.
2
How does one educate the public to understand that using short-term returns as a metric for an investment advisor's performance treats the stock market as a casino? These short-term metrics of performance are worthless. They are also what make it hard to have a rational discussion with Jane or Joe Q. Public about investing in stocks and whom to choose as an investment advisor. Deplorable basic math skills nationwide aggravate the problem.
The mantra needs to change: Investing for the long term is not any kind of bet. It is an understanding that the world's population will continue to grow (demanding more products and services) and that said population will continue to seek more and better products as a condition of the human existence. If one buys and holds for the long run in preparation for retirement, one is going to make well above average returns.
2
You only need a broker if you are going to trade stocks. Trading stocks is a mugs game. No fee mutual funds are cheaper and better. (I use Vanguard, and I pay around 0.18% a year in fees.) An occasional visit with a fee-for-service financial planner might be worthwhile, although there are plenty of books on how to write your own financial plan.
Maybe there are fewer women brokers and planners because they don't like the slease.
7
1.8% better as in on $100 invested, I make a 3.8% return ($3.80) compared to the male schlump who only makes 2% ($2.00), or 1.8% better as in,compared to the male schlump the woman pulls in $2.036 per hundred bucks, instead of $2.00. Inquiring minds want to know. Either could be statistically significant, but $3.80 compared to $2.00 is a huge difference (the woman broker is earning 90% more) versus a very slight and possibly only statistical artifact.
1
@gnowell I would also remark, on my own comment, that if we are talking a 1.8% return difference of $2.036 versus $2.00 and the apparent cause is increased trading, that this gender difference is probably concentrated in a small number of the male account managers. As for the derogatory comments about male managers, on vacation with second wife etc., I don't know whether to applaud out of a desire to critique the parasitic paternalistic bourgeois financial leeches and their second wives or whether this is journalistic grandstanding designed to make all men feel like jerks. Apparently we'll never get ripped off by financial advisors in skirts?
2
My wife (of 40 years no less, yeah!) is a physician/executive who, after 30+ years contributing to her 401K has a portfolio of 7 figures. Her investment advisor is a woman and she is very comfortable / trusts with her, my need to give her some emotional support after seeing her losses over the last quarter, not withstanding. More importantly, her advisor works on salary and not commission, so in all these years she has never felt there was a conflict of interest in their relationship. I hope to meet with this woman soon, to organize/centralize my retirement positions.
3
What would her balances be had your wife not paid all those fees and instead, had those same dollars invested?
2
@Blue Stater I just hope for your sake that her investment advisor is not a female Berne Madoff.
I've been with the same female broker since 1993 and have stuck with her as she moved from one brokerage to another. Now her niece is my main broker, and J just takes up the slack when the protege is unavailable. We used to talk about our kids but now we talk about our grandkids. Both women take a lot of their investment cues from the brokerage; sometimes they are right and sometimes they are wrong. I invest in what I think are good bets. Sometimes I'm right, sometimes I'm wrong.
Male or female, the investment game is rigged in favor of big investors with buy-sell algorithms and huge positions. If your broker is giving you a few points over passbook savings, you are doing OK.
I have another "broker," male, actually an account manager, at a firm which has been making me money on a managed account. He's OK, but I haven't a clue where my money is or what it is doing. I talk to him about once a year.
If you like hands-on investing I think a broker who knows you and has time to talk about things other than money is a good thing. That person can be male or female, but if you can talk about your kids chances are you are with someone who doesn't just see you as a source of cash flow.
3
Why is the author advising people to use particular brokers, who earn commissions based on trades, when she’s a Registered Investment Adviser Representative who earns based on the amount her clients’ assets under management? She knows, or should know, that the industry is moving away from brokerages and towards the RIA model.
4
I'll admit it. I didn't read the article. But the title alone is just fuel for the alt-right populist fire. I wish I could say I'm shocked that a mainstream, well-reputed newspaper would publish something like this. But I'm not.
Please, consider toning down the identity politics – better yet, consider abandoning them entirely.
72
@Matthew
This is one person's opinion.
@Just paying attention. Yesterday there was a column comparing "honest" women to men who claim to be "self-made" like Trump. It also engaged in the most sweeping anti-male generalizations. Nearly every day there is a column that bashes men. It's a deeply ingrained pattern that many people are noticing.
5
The writer doesn't mention Iceland. The only investment bank in Iceland that escaped collapse in 2009 was the one bank run by women. They refused to buy credit default swaps and derivatives because they just didn't feel comfortable gambling with other people's money in such poorly defined investments. I think women are generally cautious but there's a bell curve just like anything else.
Universally, however- women are under much greater suspicion and scrutiny than men are. There is little tolerance for women to make mistakes. In every job I've ever had- a man is assumed to be competent till he proves otherwise whereas a woman is assumed to be incompetent till she distinguishes herself! This has a tremendous effect on curbing those women who are naturally more inclined to take risks and be more bold than the average woman.
My sister studied for her series 7 and trained a many fledgling male brokers to do their jobs and as she turned down sexual advances from the ranking brokers in the office she found herself reassigned from the brokers who wrote her bonus checks to those who did not. She eventually joined the class action sex discrimination case that was won against Smith Barney! But it ruined her interest in the financial industry and she never went back.
17
@Geraldine Iceland was ahead of the gender equality curve with a female president decades go. Of course many of the women there do tend be frigid a good part of the year.
@Geraldine, from Wikipedia: “Relative to the size of its economy, Iceland’s systemic banking collapse was the largest experienced by any country in economic history. The crisis led to a severe economic depression and significant political unrest.” Are you thinking of another country?
@Geraldine
Uh.... Credit default swaps are a form of investment insurance, which means if you weren't buying them in 2008, you were taking more risk than those that tried to hedge their CLO exposure with them.
The problem behind the AIGFP credit default swaps was that AIG didn't have the ability to pay the swaps out when they all came due at the same time, meaning that the people whose investment risk relied on them were left in the lurch.
2
The gender of a broker should not determine an investors choice. Their proven performance should.
12
What hogwash, don’t try to reverse discriminate by doing so you are just adding to the problem. Select based on performance not selective stats.
15
An ugly biased article. I can only imagine the backlash if the genders in this article were reversed. Brings shame to the NYT.
35
If you didn't like this column, you will hate this one :) https://www.investors.com/news/women-investing-stocks-outperform-men-studies/
Even though this evidence is compelling, I'm hesitant to conclude that female brokers perform better because of innate female traits. There was a similar study that found that female computer scientists are generally more talented than their male counterparts, but they determined that this was because only the most talented women were able to survive in a field with so much gender bias. I'm willing to bet that's going on here too, undoubtedly there must be a 20% of male brokers performing on par with the 20% of women, but their average performance is dragged down by the rest of the men who ended up in the field because they were over confident in their abilities. The similarly untalented women were either discouraged from joining the profession by sexist mentors or had lower self esteem.
20
@E B Sounds like the "screening process" you describe in either profession would suggest that having a female doing the job would provide better results. Unfortunate as that sounds...
@E B I had the same thought but so how do we get rid of the untalented brokers across the board? There is nothing worse than seeing people rewarded for sub par work.
@Joanne
I don't know, we could try to address some of the sexist attitudes by education senior staff about their unconscious biases (might prevent them from discouraging women). We could encourage firms to cast a wider net during recruitment, maybe offering internships for female college students so that they become interested in that as a career. If we bring the gender ratio to 50/50 the hope is that the new 30% of women, while possibly mediocre compared to the original 20% of women, replace the lowest performing men. We can't raise the average talent any higher than that without doing things like offering higher pay and poaching smarter people from other lucrative fields. Honestly it's hard for me to treat this problem as pressing when most people (myself included) don't have enough wealth to need a personal financial adviser. There are a lot of other fields like teaching, social work, and elder care that we should be trying to attract higher quality workers before worrying about the poor financial sector imo.
Even taking this questionable study at face value, it doesn't speak at all to the gender a person's investment advisor, but the investors themseves. The argument made here would be analogous to stating that you should go to a female doctor because females have longer average lifespans.
4
This is no different from school performance. The average female will do better than the average male. However, things get stratified by sex at the tails. There are more male dunces, and more male geniuses. That's what James Damore was trying to communicate, and got fired by Google for his trouble. For a good advisor, more females. For a superb advisor, more male. In all cases, the numbers will tell the story.
5
@Observer of the Zeitgeist, but bell curves have two ends. For a truly terrible advisor, also male.
1
I don't use gender to choose a professional I need to hire. I check with personal references. My financial adviser happens to be a male. He was strongly recommended by a female friend of mine and I've now worked with him for over 25 years. I couldn't be happier. These decisions should be gender neutral.
15
Women make terrible investment advisors. Of course men are even worse, as the author correctly writes.
The problem here is that the financial advice game is a scam, in which well-scrubbed empty suits trick people into thinking that said suits can predict the future for the low, low price of 1% per annum of everything you own. But they can't. (I will allow that advice can be useful if you're doing something specific like looking into tax strategies. But those should be one-off deals, not yearly bloodletting. And you're better off consulting a tax lawyer anyway.)
At best the suits can tell you to invest in some stock and bond index funds, maybe some dividend-paying stocks if you want to get fancy. At worst they will churn for fees.
Get your division between relatively safe and relatively risky assets right-which, contrary to the advice your male or female advisors give, is a purely idiosyncratic decision based on who you are as a human being-then move on.
The amount of information you need to master to invest successfully over a lifetime is less than the amount you tried to master to get that B- in algebra 2. Investing is an emotional game, not a cognitive one. But don't expect the lady or gentleman to tell you that.
Watch the first 34 seconds and only the first 34 seconds of this video : https://www.cnbc.com/video/2016/03/04/warrens-wisdom.html
Do not watch anything else on the network.
It's a scam folks. You can invest on your own.
7
Did you run this article past a lawyer? You might be advocating per se illegal discrimination.
14
I am sure that the author knows that it is a common practice to measure performance of an investment strategy not in return but in Sharpe Ratio, i.e. risk adjust it?
2
People still use brokers?
9
Instead of ordinary brokers who at least do some job go after the C-suite at companies like Bain, Mckinsey, BCG, Deloitte, PWC. Consulting companies often promote on terms of fit which often means good ol frat boys discussing baseball and basketball statistics. Consulting companies are the very ones where a Steven Covey or someone similar will claim to be a feminist and then go back and mysteriously promote a male consultant. They are the shadow rich and powerful who hold no accountability, are leeches and the true perpetrators of male power. They might argue that they have women CEOs who tend to be figure-heads while all the deal making and strategizing is a bunch of whiskey drinking men who know exactly how things operate. A financial broker is just small fish here.
@AnotherPerson
I don’t think too many people are feeling sorry for people who have not become executives at those companies to earn seven figures. People who have the talent to work in those positions, but have not done so, are free to start their own companies.
1
It is impossible to overlook the media's hypocrisy with running such articles, which is not limited to the NYT, particularly with such a sensationalist and obnoxious headline. As is often the case, this one makes dubious use of inapt data to support what amounts to overt discrimination. Of course, so long as the author attacks the "correct" target, our journalistic elites approve. Otherwise, no article like this would EVER be published, or its author and would be fired and banned from all public life.
55
Not surprised, sadly, at all the comments emotionally (by men as well as women, it appears) expressing utter shock and dismissiveness at the idea of women handling investment decisions differently than men. I wonder what the reaction would be if the article's byline were male. I, for one, want to hear different view points, especially when it comes to my hard-earned money. In the end, it's up to me to decide who my broker is but I certainly am not going to listen to people who immediately dismiss the notion that women handle investment decisions differently.
2
Discrimination is bad period. Relentlessly attacking and demeaning one group is destructive. I can find stat that would show males are superior in many activities than women but what would be point.
7
Does Blair duQuesnay also break down financial advisor performance by race? Would the NY Times publish her recommendation to invest with whomever that study revealed to outperform investors of differing racial characteristics?
Maybe the shape of investors' skulls can reveal important information about performance as well?
50
Wow. Really stepped on some toes, or something.
Excellent.
6
Here will go again, another incredibly biased gender story.
What is next for the NY Times, studies showing that the world can get along just fine without men?
Women have shown that they can be just as good and also just as bad as men in any field they go into.
Yes, some male brokers will help you lose the shirt of your back but many will put you into good investments. Also some firms are risky, others are not like Vanguard, Fidelity etc. Also women brokers may tend to get you into safe but low return funds.
Women brokers may be less likely to lose your shirt but also less likely to make you are decent return because they take less risk.
The bottom line is don't look at gender. Look at qualified people, in qualified firms that fit your goals.
When you play the identity politics game, you hurt everybody.
22
I worked as a broker for a number of years, another career and a lifetime ago. More women are needed, yes. More people of different backgrounds as well. (I noticed that a significant percentage of investors, particularly novice ones, were much more comfortable working with someone who looked like them.) But let's not exclude the need for a different kind of man. The personality type attracted to this business creates and perpetuates the cultural faults correctly identified by the author.
5
Every time I read the NY Times op-ed section I get angry.
I'm liberal. I voted for Hillary. I hate Donald Trump. It's not a good sign that your op-eds enrage me.
Stop publishing this deeply weird, fringe-left, identity politics, cultural war gibberish.
253
@ted
I wouldn’t classify this as fringe left. The author probably also supported Clinton in the 2016 primary, in addition to the general election. People like her were part of Clinton’s base- white collar, white women who complain that they aren’t getting enough of the leadership roles in various kinds of businesses. It’s not as if they’re concerned about other people or any form of income redistribution. The author is probably more like Sheryl Sandberg, not fringe left.
7
I’m with you, ted.
17
@ted. I wish I could recommend your comment 1,000 times.
5
Risk aversion is one of the best documented biological differences between the sexes (females are much more risk averse than males). It also makes prefect sense evolutionary. It explains why men dominate top CEO positions and are much more likely to end up in prison.
However, this biological difference belongs to the growing body of "prohibited knowledge" in our PC culture and can only be safely applied by the feminists for the purpose of over-generalizing. Like with any other statistic, one should only generalize when no individual data is accessible. (When it comes to hiring, housing, etc, it is illegal to discriminate no matter what - and it should be.)
So when choosing the best broker for my stock, I research their historical performance and compare it to others. Then I match their strategies to my personal investment goals and risk tolerance. I don't need to know or consider gender, race, religion or ethnicity of my broker to do that.
5
Index funds ... by pass brokers of all and any gender.
15
@BD
Which is, as I’m sure you’re aware, what more people are doing now. It’s unclear why the author is even promoting the use of brokers.
3
It's fun that women outperform men in this area. Frankly, I have no trouble believing it.
The facts, however, are that active managers have a very -- VERY -- difficult time outperforming the market *regardless of gender,* and a few well-placed, low-fee index funds (or one well-conceived "total market" fund) will put most people ahead of the game.
If you're hellbent on having a investment advisor then, by all means, hire a woman. But people should look very closely at whether they need one at all.
15
This article is blatantly sexist. Shame on you NYT.
66
@Brad It's a letter to the editors, Brad. It's the writer's point of view alone. The NYT has nothing to do with it.
7
@Geraldine wrong. NYT letter policy claims to prohibit racist or sexist rants. Apparently, that standard is not applied to all.
11
@Geraldine This is not a letter to the editor (those are printed as "Letters"). This is an opinion piece that the Times chose to print, as a view, in their minds, worth publicizing.
8
Not sure this is a serious article? Choosing financial advisers (or any service professional) based on gender rather than evaluating the person's performance, style, ethics, and other attributes of value to you makes zero sense.
19
@Skeptical Observer
More often than not, so do the other criteria.
1
@Skeptical Observer
I like reading and listening to Barry Ritholtz, head of the author's employer. I can't imagine his signing off on this piece.
1
What happened to learning about finances before blindly trusting anyone, male or female with managing your money? This is a question of psychology and education. First of all, people should be taught in high school about personal finance. Nobody should finish 12th grade without knowing how to balance a checkbook, make a budget and how a loan such as a student loan works. They should know the value of compound interest and the costs of expensive easy to obtain debt like credit card debt. Secondly they need to understand enough probability to evaluate what investments are risky and what are prudent. This way they are not vulnerable to investment schemes that play on the emotions of fear and greed. If they had that level of preparation they would be ready to evaluate whether a "financial advisor" has a conflict of interest. This is not a gender based idea.
10
Yes, fire your male broker. But then fire your female broker as well. I did, years ago, and never considered another broker. Churn 'em and burn 'em is their motto. Buy low cost mutual funds, especially indexed funds.
32
I look forward to an upcoming op ed piece by Elizabeth Holmes on how women make better tech executives
31
It seems blatantly sexist to use statistics indicating that one gender under-performs the other gender on some given task and to suggest that as a reason to act with prejudice against individuals of that gender.
35
Face with the choice of a broker from a group that is outperformed by an index fund 99.86 percent of the time and a second group that is outperformed by the index fund "only" 98.06 percent of the time, I'm going to go with the index fund and no broker.
16
So, the NY Times is now advocating open gender discrimination on the basis of a puny 1.8% difference.
Looking closer, it appears that the difference is tied to differences in the willingness to take risks...so, um, wouldn't that suggest that men who are less risky are a better bet than women who are more risky?
Those of you familiar with Eugene Fama's classic study on the subject knows that generally, you can't beat the market--because information is known by enough people, quickly enough, that the window for getting in on a great deal is minute (unless you've been doing some insider trading). So, the best strategy is usually to be conservative and diversify.
How about this? Just find brokers who are conservative, understand the market, and have your life goals and plans in mind. Rather than being lazy and discriminatory.
I know, I know. duQuesnay is just trying to make the case that there should be more women brokers. I wholeheartedly agree. But I think this could have been done a little more thoughtfully.
166
I believe that 1.8% difference is per annum. Over 15 years, this translates to the wealth of all those using women advisors being 30+% higher (1.018^15 et cetera) than the wealth of all those using male advisors. For example, those using women advisors would have $130,000 after 15 years whereas those using the male advisors would have $100,000.
One other thing: This difference of $30,000 is paid to overwhelmingly male corporate America. I can think of better charities.
16
@MA From the actual study:
“While annual returns on investments for men were on average a marginal 0.14 per cent above the performance of the FTSE 100, annual returns on the investment portfolios held by women were 1.94 per cent above it. This means returns for women investing outperformed men by 1.8 per cent.”
So not only is 1.8% not measly, it’s almost the entirety of ability to outperform the market.
17
@MA "So, the NY Times is now advocating open gender discrimination on the basis of a puny 1.8% difference. " The New York Times is not "advocating" any such thing. The writer, who is not employed by the NYT, has written an opinion piece.
13
A few thoughts here.
1) It seems like a shockingly self-serving column
2) It is sexist to argue your gender is "better" at this activity than the other.
3) It seems odd, to me, to argue that gender should even enter into the decision over whether to hire a professional. How about checking out their history, qualifications, philosophy, process, recommendation? And how they are paid? Or is that just too hard?
4) The data she presents are dirty because they aren't about financial professionals. They are about the investors' results, which include many self-directed folks too. Especially the "Boys Will Be Boys" paper, which analyzed "account data for over 35,000 households from a large discount brokerage, we analyze the common stock investments of men and women from February 1991 through January 1997." Discount brokerage implies self-direction.
29
Enough of this divisive borderline hate speech.
We have enough problems w Russia and China dividing us. Why jump in and make it worse?
25
Adviser for what? Neither sex outperforms an index fund that tracks the overall stock market..
22
This is a terrible column. First, it confuses brokers and financial advisors. As Mr. Trump often demonstrates, it's hard to win arguments when you confuse the facts. Second, it is terribly sexist. If you switched the sexes/roles in the piece, there would be outrage from women's groups, and rightfully so. Most everyone would agree about the need for equal opportunity and merits of diversity. But to suggest that one sex, gender or ethnicity is inherently "better" than the others because of their DNA ranks with the white supremacists. Who will we see next on the NYT op-ed pages: Rep Steve King?
107
But you couldn’t switch the sexes, because that would be against the actual facts.
It's amazing how Larry Summers could give a speech using similar arguments in 2005 that prompted liberal outcry and led to his resignation as President of Harvard, while this is trumpeted to the world by the New York Times.
https://www.harvard.edu/president/speeches/summers_2005/nber.php
53
@RAS
This is amazing to you? We live in a world of double standards. Just ask any woman.
Ms. deQuesnay and the NYT clearly wish to perpetuate those double standards, but this time to a woman's advantage. Who needs justice when you can advocate reverse discrimination?
6
@RAS I read the speech and there is no similarity at all. This is an article based on fact. The headline is just sexist and cliche. The article insightful and probably accurate as well. It is making me think of making a change. I am pretty tired of the man knows all attitude of my advisors who really arent that great.
This is a funny way to advocate for equality, denigrate one sex with negative stereotypes while only looking at another virtues. Seems rather retrograde.
63
If women outperform men at investing by 1.8 percent, then every hedge fund manager in the world should be a woman. If such an astonishing edge can result purely from being female, then one would think that it would have become widely known by now.
9
@Shiv - And if women are underpaid compared to men by 15% (according to that bastion of unbiased information, HuffPost among others), then every open position in the world would hire a women to fill it.
And yet that hasn't happened. Hmmm....
3
I expect better than this from the NY Times.
68
I’m considering firing all my WHITE female advisors. After all 53% of them voted for Donald Trump and given the appalling consequences of that judgment call, I don’t see how I can trust white women with my affairs. That’s the lesson for this sexist article.
43
While I do not dispute her data, her conclusions are a prime example of the same kind of fuzzy thinking that underlies much of identity politics.
43
I never thought the NYT would publish such a blatantly sexist piece. Consider me WOKE.
51
Consider me post-woke, and part of the backlash against this sort of nonsense.
22
The issue is not whether women are more empathetic investment advisors, or that men are prone to testosterone-fueled risk-taking. The truth is that without the voices, opinions and experiences of all genders, ANY organization is diminished.
That goes for financial firms, tech companies, and, yes, governments. We all do better when everyone has a seat at the conference table.
8
We figured this out a while ago. Brokers not only were paid on commission, but the commission was paid based on "churning" the account. Buy, sell, buy, sell, that's how the broker get his money. Instead, we now have great confidence in Schwab, where Carrie Schwab Pomerantz is chair and Liz Ann Sonders is the chief investment strategist. Their employees are loyal...in 20 years, we've only had two account managers, both very sharp women. Time for other companies to follow suit.
9
@Anne
True. Fidelity is also owned by a woman.
So maybe the whole index funds/etfs movement has been allowed to grow thanks to women who didn't buy into the me-first philosophy of male brokers.
@Anne
Uh.... Brokers can't churn unless they have investment discretion. Literally every broker-dealer has a non-discretionary brokerage offering. This is not unique to female-run firms.
Ms. duQeusnay's registration with FINRA is under CRD 4823176. It reveals the following;
Ms. duQuesnay is technically not an Investment Adviser, her present firm is and her role within that firm is Investment Advisory Representative, IAR.
As to firm's and licenses, Ms duQuesnay has a basic license in general securities, a Series 7, and a most basic license, a Series 66, that affords her the status of IAR. She has worked for six (6) firms, brokerage and Investment Advisers, since 2004.
Her advanced licenses are not technical but in Sales Supervision, a Series 9 in General Securities and a Series 10 in Options. Those licenses are administrative and have nothing to do with technical.
How did the NY Times let this happen to the readers? NY
Times - Please do your job!!!
74
@Dale C Korpi
Let disclose some facts to this click bait response:
An Investment Advisory Representative, or IAR, is a person that works for an advisory firm. For instance, Fidelity brokerage would be the firm and every adviser, no matter how qualified or how many years served, would hold the FINRA designation as an IAR.
The Series 7 and 66 licenses are the SEC recognized licenses for investment advisers. There are some specialty certifications and accolades you could go for, like your CFP (certified financial planner), but based on your career path, or success with clients, it may not be needed. Does a professor need to complete their PhD in their field to be an effective teacher? Possibly, but definitely not necessarily.
Also, the Series 9 and 10 are for brokerage managers and have a large compliance aspect to them which could add a larger scope of knowledge to an adviser. Those licenses are also needed by the SEC in order to review and approve trades for other brokers - basically a check so less experienced brokers are not doing anything not in the clients interest. More knowledge is never a bad thing.
I don't know how quite to respond to you saying she's been in the industry since 2004. Is 15 years of experience a bad thing?
16
@Dale C Korpi
This is baseless criticism. She is appropriately licensed to assist a large percentage of the investing public.
12
@Adam
If you’re going to correct others based on terminology, be accurate. Those who are registered with FINRA and work for broker dealers are Registered Representatives. Those who work for Registered Investment Advisers are designated as Investment Adviser Representatives. A brokerage is not an RIA. They may be affiliated, but they are not the same.
2
Blair duQuesnay, for all her "reasoning," is a living, breathing example of bigotry. Decisions for most things in the business world should not be based on a person's sex any more than it should be based on their race, but here we have a writer doing just that.
130
@Gene Seems like the greater point is that thus far through history everything has been decided based on sex. How we actually reconstruct things so that there is equal access is the point of the author. Just because she didn't offer every single caveat to make everyone calm enough to stay present for the debate does not make this one single perspective invalid. It's a perspective and information, not a doctrine.
2
"...the future of finance should be female. It wouldn’t just be more fair. If the years of data are any indication, it’s a future in which all of us would make more money. Find me a good argument against that."
Easy! You advocate sexism. The solution is to ensure that brokers act in their clients' best interests and do not act in their own self-interest.
38
I agree with the 'generalized statistics' you present as they are inarguable. Women investors are typically more conservative then men and don't try to hit the ball out of the park with each new trade.
However, some male investors (like me) prefer ETF's and understand investing enough to know 'stock picking' can be a dangerous game. Moreover, two good friends of mine are financial advisors are they could not be more careful with their clients money. Both men; they are the exact oppositve of the 'broad brush' picture you paint of the conflicted money manager.
Lastly, you stand to benefit from your opinon piece as you sway women investors to flock to female financial adivsors (such as yourself).
9
"Whatever the paths taken, the future of finance should be female. .. Find me a good argument against that."
No argument, duQuesnay may be right. What she says is that #MeToo leads to #OnlyMe.
It was just a matter of time and here we are.
31
Sexism at its worst anyone?
76
@Peter Broen Not even close. The Kavanaugh hearings were much worse and had lasting consequences. See: Thomas, Clarence.
2
I am disturbed that the Times would allow an opinion piece that encourages favoritism along any lines, be it gender, race, religion or any other status. Did any thought go into this? This is atrocious and should be completely and utterly denounced. Shameful.
95
Consider firing your self-interested, conflicted, and almost certainly underperforming broker, male, or female.
24
@Jeff
Yes, and perhaps, the editorial staff at NYT for passing on blather. Also, there is a market that is much less volatile, the bond market. Sorry, no glamor there, just steady income and steady, modest growth over time. Schwab trades are painless and reasonable/no churning.
5
What an absurd notion! Is this where our nation is headed as women claim greater roles in government? This type of nonsense is precisely why Trump now occupies the Oval Office.
82
@Misterbianco
Yes, because he is so mature and level headed, a true leader, how did the United States ever survive without him?
1
@Just paying attention I think you’re missing the point. Trump was a reactionary protest against leftist nonsense like this.
11
This misguided essay relies on sweeping generalizations and stereotyping, the very things that feminism sought to sweep into the dustbin of history.
57
@Mark Siegel - Not for everyone, Mark. Just for them.
2
The idea that you consider firing your "male" investment advisor is really pretty dumb. If there is any job that is measurable in purely objective terms, it is investment advising. You should consider firing your UNDERPERFORMING investment advisor regardless of gender, ethnicity, religion or any other personal characteristic. You should also consider hiring an investment advisor without regard to those same characteristics. Any claims that one gender or the other is inherently better at that job are absolutely sexist.
10
The Times should be ashamed of publishing this article. It is plainly divisive and a mirror image of the kind of thinking that good people abhor from right-wingers. Is it OK to favor one group over another if a study supports the notion? Where would that kind of thinking take us? I have a female financial advisor, but I selected her because she was the best individual I could find. And that’s the only fair way for our society to operate.
62
One word in response to this frustratingly foolish opinion piece: yikes.
39
A broker, whatever the embellishment of the job title, is a salesperson. Many of us assume that a salesperson magically has our best interest at heart; whether in real estate, cars or financial advice. Never been true, and when your source of advice actually makes money on what you buy, cannot be true.
Sure, there are lucky bets, on stocks, on companies, on advisers, but these are vastly outweighed by poor bets and dead average ones. Something the middle-class investor is just beginning to learn. Do you wonder why index funds consistently outperform the average of managed ones? Do you ever tote up the actual fees an adviser charges? Do you wonder why the ‘standard’ advice concerning percent allocations as a function of your age never varies, even though it’s obviously long-outdated? Market’s up- let’s buy in, sayest your guy. Market’s down, let’s buy in, she says. Tech today, utilities tomorrow. Tulip bulbs next week.
Yes, the salesperson does know much more than you ever will, but that isn’t going to help you put food on the table in the long term.
8
For the average investor, using a broker to invest in the stock market is a bad decision. An indexed mutual fund which replicates the S&P 500 is an excellent option.The S&P 500 is a stock market index that tracks the stocks of 500 large-cap U.S. companies. It represents the stock market's performance by reporting the risks and returns of the biggest companies. Investors use it as the benchmark of the overall market, to which all other investments are compared.
Over the last 10 years, it has returned 9.49 percent per year. In 2017, it returned 21.83 percent. S&P stands for Standard and Poor, the names of the two founding financial companies.
Most brokers, whether male or female, will have difficulty recommending investments which match the S&P 500 index.
24
@tmonk677. The Total Stock Market Index Fund which covers the entire market and is generally the default stock index fund now.
If you're paying someone, male or female, for financial advice, you have not been paying attention. Active management has been debunked over and over for decades. Index Funds, created in the 70s by John Bogle, rendered most of those financial positions obsolete. They subsist nowadays because too many people still conflate investing and gambling.
Do yourself a favour and pay attention instead of ludicrous fees in exchange for the disservices of a active fund manager.
https://www.ifa.com/videos/index_funds_the_movie/
30
@mq Since you seem to be a Boglehead...let's educate you. 1) Vanguard has numerous actively managed funds; 2) There are sectors of the investing work where you definitely want "boots on the ground" active knowledge of market (such developing markets); 3) He (Bogle) himself stated in an interview at the last Berkshire Hathaway meeting that there IS a limit to indexing, in that if all investors were passively invested in index funds it would bring an end of an active market of buyers and sellers (armed with equal information). 4) the passive people love to trumpet that "75% of active funds fail to beat their index"! ("don't be sap and get ripped off").
However they also miss the point.."What about the 25% that do"? Case in point - you could have invested 10,000 in Berkshire Hathaway 20 years ago and $10,000 in the Vanguard S&P 500 index fund and paid almost no management fees (as you would with Berkshire). net result - you would have about 2-3X more today in Berkshire (an actively managed company that owns other companies).
@dano50
Ha! Knowledge and arrogance are so rarely seen together... and your case is no exception.
1) Of course they do. People should have stopped buying them decades ago, but since they are so intent on pursuing suboptimal behaviours, they might as well offer the customers what they demand.
2) Do you have anything to substantiate this claim? I frankly doubt it.
3) There is no way that all investors are going to go with indexing, because there will always be a sizeable amount of people who either don't know what an index fund is or they wrongly believe they can do better. It's been historically like this and, unless the human mind changes somehow and moves away from cognitive biases, it will stay like this.
4)
"What about the 25% that do?"
The 25% are, as you might have noticed, a minority. So in a game of picking the right active fund, you are more likely to fail. What is worse, the winners of today are tomorrow's losers, so you would be betting over and over again, paying fees to move the money from one failing fund to another. A great strategy for dilapidating one's wealth and miss on the market return.
"you could have invested 10,000 in Berkshire Hathaway 20 years ago".
Yes. The way to consistently beat an index is to predict the future. I agree with you on this point. Can you predict the future or know of anyone who can? Am I being sufficiently sarcastic here?
Are you a financial adviser? Have you spent vasts sums on one? You certainly sound like one.
"While neither sex is immune to shoddy behavior, research has shown that female investors are more likely than men to focus on a family’s financial goals over their own absolute investment performance."
Consistently shoddy has been firing anyone based on their gender, their age group, their race, their faith, or their sexuality, especially based on what "years of research" show. Curious - in what areas has research shown men outshine women, Ms. DuQuesnay?
Before you tell us what years of research say about the performance of black investors vs. that of whites, maybe some introspection is in order.
15
Broker? No thanks. Many would be better off using fee-based independent financial planner instead who works for you and looks at your entire financial picture. There are some good ones out there and many are women.
19
@Lawrence
True. And many are men. Ms.duQuesnay fails to divulge her investing performance metrics for the past 15 years, why is that? What are her fee schedules/trading costs? Is she a fiduciary?
3
I have had the experience of being blind sided by male and female alike in the financial services business. Maybe it's the business that has problems. Maybe there is a movement to change the very aggressive greedy behavior of people who want to advise you about your money, but I doubt it very much.
88
Women outperform men in many areas. Men have not had to compete on a truly level playing field; perhaps that is what the Steve Bannons of the world fear.
9
@kat perkins Do I detect some sexual bias here?
3
This is a self serving article as the author is a female. All statistics can be manipulated. In the end it is not the averages that count but the individual.
39
Hire the financial adviser that works best for you, regardless of their sex. It's that simple. Isn't that what we're striving for in all occupations?
There are fewer women advisers than men, but that's a whole different conversation.
Telling people to hire anyone based on their sex is wrong.
(I am a woman).
251
However, I think telling people why women advisers on average do better than men on average is right.
7
@chrisinroch
"Hire the financial adviser that works best for you, regardless of their sex. It's that simple."
That's simple?
4
A bit of disagreement with the reference to CFAs. This is a highly focused certification most commonly found at an investment bank, insurance co., trust department, etc. CFP (Certified Financial Planner) is a designation that covers retirement & estate planning, insurance, taxes, as well as investments. Not as heavy on investment skills, obviously, but a wider horizon. Also, pay for her time in preference to by commissions. And try to stick to index mutual funds. (I know I'm making myself popular here.)
5
My wife and I did this years ago. The women we now invest and work with are beyond expectation and superb at their communication and execution of our goals with investing.
12
According to Forbes only 5% of financial advisers beat the s&p 500. Fire all brokers and use an indexed fund and you will have a 95% chance of coming out ahead.
208
@Pat As a woman, I agree. No doubt there are a small % advisors who do really well and no doubt there are certain investors -- often high net-worth individuals -- who get to invest in special funds with high minimum requirements and good returns your average person cannot.
But for the 99%, an indexed fund with no/ low fees is often good enough. The biggest first step -- which a lot of people, especially younger women don't do -- is to simply review and be honest about your finances and invest early/ consistently even if only a small amount. People in my peer group were astounded to learn that I had begun investing as a woman as soon as I got my first decent job out of college. I was not a business major but knew enough about the value of time.
If you really want an advisor, get one who is fee-based and not commission-based. Google and read the book by economist Harold Pollack and Helaine Olen.
7
@Pat
And every year it's a different 5%. Someone will always "beat the market," even a monkey throwing darts, but the real trick that nobody has ever demonstrated is the ability to do it consistently.
13
@Pat & ms:
There is a cult of "Index Fund Investing" which is based on misleading statistics.
In a nutshell: Index funds are promoted as low-cost vehicles which save money by having low fees because no research is required; they just follow a selected index. Managed funds cost more because there are stock picking and trading costs. Which is better hinges on whether the low cost more than compensates for the expertise (and cost) of the fund manager.
Some of the claims supporting index funds which I have most often heard are that index funds beat most managed funds in most years and that there are no managed funds which always beat the index.
While both statements are statistically true, they are irrelevant. Most investors are in it for the long haul as their money is in retirement accounts. Managed funds do not have to beat the index every year to return a better result for investors; they just have to out-perform the index funds often enough to be positive over time.
My wife and I have two managed funds in our retirement accounts. The first we selected 30 years ago when we started investing because my wife liked their investment strategy. The second I selected 25 years ago because its investment strategy seemed more stable.
Neither fund beat the index every year but over the years that we have owned them, they both have almost equally well outperformed the index fund which we have in our taxable account.
3
Not disagreeing with the article's premise at all, but if you're "broker" is only trading stocks and investing in market based investments, no load, index, or otherwise, then you have an "investment advisor" not a "financial advisor". Almost every person needs low risk investments, as well as advice on loans, generating income, risk management, and insurance. A true financial advisor covers those areas and more. Many of those aspects of your financial life have nothing to do with maximizing returns.
As the general disclosure on any securities sales material states, "past performance is not indicative of future returns". If your primary decision point is historical returns, you're making a huge mistake.
5
I fired my independent male financial adviser/planner after several years and replaced him with a female one that works for a major investment firm. The male adviser was fine until I felt his interactions with me did not mesh, i.e., he took charge, made decisions and while that was fine in the beginning it didn't change after I became more learned about finances in general. In contrast the female adviser I have now is everything I was looking for - attentive to my needs, a good listener, cognizant of my needs and most of all a communicator. And over the last 10+ years my wealth has increased exponentially. Plus she has a great office administrator that keeps things working. This is not to say my male adviser was all bad - rather I felt he heard me but wasn't listening. He's not the only male business person that has impressed me in this way - I have a male CPA and he does a good job but not the greatest communicator. As a female client I recognize my needs - someone who listens well, communicates effectively and makes sound decisions. I am sure male advisers can do all these but in my experience professionally, women have been better at it.
22
Great piece. In my decades of life on this earth, I have seen women consistently be good stewards of the lives and the work projects they encounter. I have seen men do this as well, but it's not nearly as consistent; and men often let ego stand in the way of prudence. I would certainly hire only women as my financial stewards if I had a choice in the matter.
12
I was advised many years ago by a fellow individual investor that "everyone needs to be his/her own broker" in order to optimize one's results. I believed him then, and it's paid off. One gets out of saving and investing what one puts into it. If you're going to "trade time for money" in the work world, your second most important responsibility is to pay attention to how to manage the fruits of your labor. Those who work are the architects of their own financial future. It's also a good idea to get a second opinion from a professional financial advisor to determine any gaps in one's plan and to keep up with the continual changes in the tax laws. Not everyone on Wall St. is a crook or gambler, but the best active money managers do not advertise and only do business upon referral. Think about companies which do not generate negative headlines. Now there's an interesting challenge.....
5
@EJ: Bernard Madoff was well respected until he wasn't.
2
"While gendering any ability or trait can make people uncomfortable in these forward-thinking times, which sex seems better equipped to help families nurture and protect their nest egg?" It is disturbing that an article `gendering' something technical like being a stock broker is published, while a similar discussion would be squelched if it, say, were on a topic like how, at the high end, boys significantly outnumber girls in spacial reasoning abilities, and so one might expect this to be a factor in the demographics of some fields like research physics and mathematics, that rely on such abilities.
137
Sorry a broker is not an investor. Broker is a sales person, not a professional investment manager.
78
@Tom, I agree. Brokers' interests are not the same as the clients' interests. Many people recognize that a car salesman does not necessarily act in a client's interest, but they fail to recognize the same fact about brokers.
If someone feels that they need advice, then they should go to a fee for service financial advisor and not to a broker who is masquerading as a financial advisor. At a minimum, I would require that the financial advisor had been astute enough to warn clients that the market and the economy were about to collapse in 2007, due to the housing bubble. Many of Blair du Quesnay's points are good, but it disturbs me that she does not recognize the role of the housing bubble in the great recession, and it causes me to call her judgement into question.
7
@Bruce That’s a mighty tall order and I’m not even sure it’s possible. In 2008, I worked at a fee based firm for VHNI’s. I didn’t get worried until the March blips- even then the senior partners thought I was ridiculous and were calling it a small correction.
The only people that might have known were the people making all the subprime deals and packaging them in a fraudulent way. Ie: actually in on the con. And you definitely don’t want to hire those people.
@AMarie, this was very easy to forecast. At the time, economic growth was being fueled by consumption that was based on an unsustainable housing bubble. Many consumers were using their houses as piggy banks. CEPR economist Dean Baker noticed that house prices were rising much faster than house rents, which indicated that there was a housing bubble.
http://cepr.net/publications/reports/the-housing-bubble-and-the-great-recession-ten-years-later
I'm fortunate that I did not depend on a financial advisor, or I would have suffered through large losses in the great recession. It's bad enough that many financial advisors did not recognize this at the time, but as your comments and Blair duQuesnay's op-ed indicate, many financial advisors still do not understand why we had a major recession. I'm not singling you out. As you indicated, senior partners at your firm had less of an understanding than you did.
Index funds work for most investors. If you work with a broker and you're not super rich, you've already made a bad choice.
Given that, the balance is between risk and reward. More risk = more potential reward. Throw in a casino aspect and Wall Street attracts certain types: gamblers. Those types can be men or women. Most investors should stay away from gamblers. If it sounds too good to be true, it probably is. If you can't afford to lose it, don't wager it.
Finally, as for the question of blind auditions. An increase of 15% over 23 years (so, for an orchestra of 100 which had 5 female players, now has 6, an orchestra of 100 that had 20, now has 23) isn't much to make hay about. Blind auditions are certainly better, but the bias, such as it is, seems less relevant than we're led to believe.
31
@OneView
a) you still need to choose which index funds, and how often/when to buy and sell. some people prefer to have a professional do that for them.
b) yes 15% is only a handful on a small base; that is why the study looked at 5 orchestras over 20+ years and recorded a significant increase.
7
@OneView
Well, your orchestra analysis is lacking context. The major orchestras have very little turnover, so a change from 20 to 23 represents a very significant increase in the percentage of open jobs that go to women.
2
@OneView as a musician I can tell you that blind auditions have significantly changed the landscape, not only getting more women hired, but especially increasing the likelihood of Asian musicians getting the job (not 15% -- I don't know the statistic but it must be much greater than that). This is true not only in the top orchestras but also regional ensembles across the country and across the world where blind auditions were adopted. Some orchestras in Europe that don't have blind auditions still barely hire any Asians.
Orchestra musicians are usually tenured, which means that it takes time for the change to become apparent.
Stockbrokers can be measured based on their track record, and most of them, men or women, aren't any good at their job. To favor female brokers is financially irresponsible advice -- you should carefully take your time to find a good one, male or female. And, unless you're very rich, you're much better off investing on your own as long as you are careful and don't buy or sell a lot.
2
I'm not sure that the great struggle for social and economic equality really needs to start at the level of financial advisors. The women most in need of our concern do not have offices with views, but are stuck in low wage jobs with little support for child care, health insurance, and other necessities.
This opinion assumes that the Times reader is particularly concerned with the fate of the upper-middle class. This may be the case. Personally, the closest I'm likely to ever come to a financial advisor is a computer program, which is beyond gender. That the author is an "investment adviser" makes this more advertisement than social commentary.
13
Assuming the world of brokers has not changed much since the 80's, do the women still run the brokers office, answer the phone, process all the paperwork, speak with the clients, schedule the broker's time, follow up with the client.
That was my experience with brokers in the corporate world I worked in. The underpaid women did it all, while the broker wasn't yet back from his lunch meeting or was out of the office for the day.
Women trained to become brokers, but it was a high bar to cross back then. Not surprised today's brokers perform so well.
10
Lots of research bears this conclusion: see the number of women on a Board of Directors needed to tip the scale in productive, and financially sound decision-making.
I know this is an Op-Ed, but it would be helpful to shout out some brokerage firms that have been shown to hire women at parity with men, and have financial numbers to demonstrate the point of this piece.
I agree with all, but I'm not a financial adviser and spent my free time this morning reading this great piece; I don't have time to track down the firms that will assist me in putting the wise words into action!
18