Morningstar - Q2 2020 - 76

Investors

not have done it. It's an innovator's dilemma
when a very large, extremely successful
business earning multiple billions of revenue does
business in a certain way. To come in and say,
"Let's change that way and focus on an entirely
new client base that has different needs,
use tech to create more customized investment
portfolios at a much lower price"? I don't
think so. That's good for the client, because that
money ends up in her pocket, but it means less
profitability for the existing company.
Benz: How can gender diversity on investment firm
staffs help them serve their clients better?

Krawcheck: Well, it can earn higher returns.
The research tells you that women are as
good or better investment managers than men are.
We can debate the research, but I don't see
anything that says women are terrible at this. And
yet-and these numbers may have moved a
little bit-about 90% of mutual fund managers are
men and 98% of mutual fund dollars are managed
by men. What is fascinating about it is this
is an industry that supposedly is about looking
for the highest risk-adjusted returns. We've been
so overwhelmingly socialized that this is a
man's game that we look past the research that
points us to a way to improve the results.
Benz: You were an outspoken advocate of a fiduciary
standard for advisors while you were head of
Citi's wealth-management business more than 10 years
ago. Why has a uniform fiduciary standard been so
hard to enact?

Krawcheck: Getting regulatory change
through is incredibly difficult. It typically happens
after a financial crisis, when everyone clearly
sees the need for a change. After the last financial
crisis, people said we have to move on this,
but it didn't happen.

We need to get to one standard. When I started at
Merrill, and there was still some momentum
around a potential change, I asked the lawyers
there for a straightforward statement about
differences between the standards. And they
pulled together pages of differences, in small type
on big sheets of paper. I used to say nobody
in the industry understood all those differences,
nobody. How do we expect an individual investor
to make an informed decision?

76

Morningstar Q2 2020

Benz: There's been a reckoning in some industries
over sexual harassment in the workplace.
Why hasn't the financial-services industry had its own
#MeToo movement?

Krawcheck: One important reason is that
many in the industry require all their employees
to sign agreements that sexual harassment
will be handled through the arbitration process.
When you survey employees in the financialservices industry, particularly wealth management,
the incidence of sexual harassment is high
compared with other industries. This is happening,
but it's being quieted by the arbitration
clauses and confidentiality agreements that are
signed on payouts.

It's Not You
Benz: Do you have any tips for women in
the investment industry about how to navigate
their careers?

Krawcheck: Sometimes you need to recognize
it's not you. I know what I'm supposed to
say in answer to your question: Work hard, take
risk, and don't let them get you down, and
speak your mind, and bring your best self to work.
I'm going to be perfectly honest. If you're not
getting ahead, it might not be your fault. The
research shows that middle management is where
diversity goes to die. Your boss might be a
terrifically wonderful human being-man, woman,
nonbinary-but they have been brought up
in a society in which leaders are men. When you
picture a CEO, it's a man. When you picture
a senior executive, a trader, a money manager-
all of us picture a white man. If you are a
white man, you might be more comfortable
promoting people who remind you of yourself. You
went to the diversity research symposium,
and you went to the unconscious-bias training.
But if you are only promoting or hiring a
few people a year, you might fall back on what
feels more comfortable to you.

At Ellevest, we call him or her Todd. Everybody
loves Todd. But Todd never gets around to
promoting you. When you work for a Todd, it isn't
going to matter how many more career books
you buy. You're not going to change him, and your
company-which says it's a meritocracy-

is not going to take him out. Because his results
are good. He's hitting a sales plan, and he's
passing his audits. He's just not making the
diversity target; oh well. If you are in a position
to do so, transfer departments, get a new
manager, branch out, leave the company. There
are times when it is not you, no matter
what that dog-eared, you-go-girl, be-your-best
book tells you. There are times, honestly,
when you cannot work any harder. It is not you.
I bet you no one else has ever given that
advice before. K
Christine Benz is director of personal finance
with Morningstar.
Jeffrey Ptak is global director of manager research for
Morningstar Research Services.
References
Visit the The Long View landing page
https://www.morningstar.com/podcasts/the-long-view/44
for show notes including sources for research
behind the ideas discussed here. Here is a sampling:
Barber B. & Odean, T. 2001 "Boys Will Be Boys: Gender,
Overconfidence, and Common Stock Investment."
The Quarterly Journal of Economics. February. PP. 261-292.
Chatzy, J. 2018. "Why Women Invest 40 Percent Less
Than Men (and How We Can Change It)." Nbcnews.com.
Sept. 25.
Copeland R., Hoffman L. & Ensign, R.L. 2018. "How Wall
Street Keeps #MeToo Claims Out of the Spotlight."
The Wall Street Journal. Jan. 19.
Fitfield, K. 2018. "The Trickle-Down Effect of Caregiving
on Women." AARP.org, Nov. 29.
Graf, N., Brown, A., & Patten, E. 2019. "The Narrowing,
But Persistent, Gender Gap in Pay." Pew Research Center.
March 20.
Larson, E. 2017. "New Research: Diversity + Inclusion =
Better Decision-Making at Work." Forbes.com. Sept. 21.
Miller, C.C. 2018. "How a Common Interview Question
Hurts Women." The New York Times. May 1.
Nilsson, P. & Murphy, H. 2018. "Women Reach Their
Peak Salaries 10 Years Sooner Than Men." Financial Times.
Sept. 19.
Rock, D. & Grant, H. 2016. "Why Diverse Teams Are
Smarter." Harvard Business Review. Nov. 4.
Sargis, M. & Wing, K. 2018. "Fund Manager by Gender:
Through the Performance Lens." Morningstar White Paper.
March 8.
Sundheim, D. 2013. "Do Women Take As Many Risks
As Men?" Harvard Business Review. Feb. 27.


https://www.morningstar.com/podcasts/the-long-view/44 http://www.Nbcnews.com http://www.AARP.org http://www.Forbes.com

Morningstar - Q2 2020

Table of Contents for the Digital Edition of Morningstar - Q2 2020

Contents
Morningstar - Q2 2020 - CT1
Morningstar - Q2 2020 - CT2
Morningstar - Q2 2020 - Cover1
Morningstar - Q2 2020 - Cover2
Morningstar - Q2 2020 - 1
Morningstar - Q2 2020 - 2
Morningstar - Q2 2020 - Contents
Morningstar - Q2 2020 - 4
Morningstar - Q2 2020 - 5
Morningstar - Q2 2020 - 6
Morningstar - Q2 2020 - 7
Morningstar - Q2 2020 - 8
Morningstar - Q2 2020 - 9
Morningstar - Q2 2020 - 10
Morningstar - Q2 2020 - 11
Morningstar - Q2 2020 - 12
Morningstar - Q2 2020 - 13
Morningstar - Q2 2020 - 14
Morningstar - Q2 2020 - 15
Morningstar - Q2 2020 - 16
Morningstar - Q2 2020 - 17
Morningstar - Q2 2020 - 18
Morningstar - Q2 2020 - 19
Morningstar - Q2 2020 - 20
Morningstar - Q2 2020 - 21
Morningstar - Q2 2020 - 22
Morningstar - Q2 2020 - 23
Morningstar - Q2 2020 - 24
Morningstar - Q2 2020 - 25
Morningstar - Q2 2020 - 26
Morningstar - Q2 2020 - 27
Morningstar - Q2 2020 - 28
Morningstar - Q2 2020 - 29
Morningstar - Q2 2020 - 30
Morningstar - Q2 2020 - 31
Morningstar - Q2 2020 - 32
Morningstar - Q2 2020 - 33
Morningstar - Q2 2020 - 34
Morningstar - Q2 2020 - 35
Morningstar - Q2 2020 - 36
Morningstar - Q2 2020 - 37
Morningstar - Q2 2020 - 38
Morningstar - Q2 2020 - 39
Morningstar - Q2 2020 - 40
Morningstar - Q2 2020 - 41
Morningstar - Q2 2020 - 42
Morningstar - Q2 2020 - 43
Morningstar - Q2 2020 - 44
Morningstar - Q2 2020 - 45
Morningstar - Q2 2020 - 46
Morningstar - Q2 2020 - 47
Morningstar - Q2 2020 - 48
Morningstar - Q2 2020 - 49
Morningstar - Q2 2020 - 50
Morningstar - Q2 2020 - 51
Morningstar - Q2 2020 - 52
Morningstar - Q2 2020 - 53
Morningstar - Q2 2020 - 54
Morningstar - Q2 2020 - 55
Morningstar - Q2 2020 - 56
Morningstar - Q2 2020 - 57
Morningstar - Q2 2020 - 58
Morningstar - Q2 2020 - 59
Morningstar - Q2 2020 - 60
Morningstar - Q2 2020 - 61
Morningstar - Q2 2020 - 62
Morningstar - Q2 2020 - 63
Morningstar - Q2 2020 - 64
Morningstar - Q2 2020 - 65
Morningstar - Q2 2020 - 66
Morningstar - Q2 2020 - 67
Morningstar - Q2 2020 - 68
Morningstar - Q2 2020 - 69
Morningstar - Q2 2020 - 70
Morningstar - Q2 2020 - 71
Morningstar - Q2 2020 - 72
Morningstar - Q2 2020 - 73
Morningstar - Q2 2020 - 74
Morningstar - Q2 2020 - 75
Morningstar - Q2 2020 - 76
Morningstar - Q2 2020 - 77
Morningstar - Q2 2020 - 78
Morningstar - Q2 2020 - 79
Morningstar - Q2 2020 - 80
Morningstar - Q2 2020 - 81
Morningstar - Q2 2020 - 82
Morningstar - Q2 2020 - 83
Morningstar - Q2 2020 - 84
Morningstar - Q2 2020 - 85
Morningstar - Q2 2020 - 86
Morningstar - Q2 2020 - 87
Morningstar - Q2 2020 - 88
Morningstar - Q2 2020 - 89
Morningstar - Q2 2020 - 90
Morningstar - Q2 2020 - 91
Morningstar - Q2 2020 - 92
Morningstar - Q2 2020 - 93
Morningstar - Q2 2020 - 94
Morningstar - Q2 2020 - 95
Morningstar - Q2 2020 - 96
Morningstar - Q2 2020 - Cover3
Morningstar - Q2 2020 - Cover4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2024q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2024q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019winter
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019fall
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019summer
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019spring
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20191201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20181011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20181201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20171011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20171201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20161011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20161201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20151011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20151201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20141011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20141201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20131011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20131201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20121011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120405
https://www.nxtbook.com/nxtbooks/morningstar/investorconference2012
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20121201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20111011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20111201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20101011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100809_lincoln
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100607_lincoln
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100405_lincoln
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20101201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20091011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008fall
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008summer
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007spring
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007fall
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007summer
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008spring
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008catalog
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008winter
https://www.nxtbookmedia.com