Behind Gender-Pay Disparity in Wealth Management: Too Few Female Financiers

You know the old saying in wealth-management circles “We eat what we kill”?

The expression makes me cringe. Sounds too predatory. So, for this column, let’s go with the light version: Revenue x percentage payout = dinner.

Percentage payouts are core to wirehouses, which pay reps about 40% of their sales. They are also core to registered investment advisers, including some who describe their compensation as “salary plus bonus.” Underneath the marketing exoskeletons, many RIAs still pay advisers about 35% or so of revenues year after year.

X and Y chromosomes are not variables in these calculations. Which suggests that formulaic compensation should prevent wealth management from repeating the injustice of women routinely earning less for doing the same job as men.

Unfortunately, it doesn’t. If anything, the uneven pay inside wealth management highlights the hurdles women advisers face. My view: the low number of women financiers is more likely to be the cause of unequal pay than men in corner offices feeding leads to guys who smoke cigars, drink red wine and scrum in seedy bars every Thursday night.