Gender Diversity in Asset Management

Mandate

Gender imbalance remains a persistent issue across financial services—particularly within investment management. While awareness and action are increasing, progress is uneven and, in many areas, slow.

1.1 Frontier Advisors – The Power of Gender Diversity in the Workplace (2018)

Frontier Advisors draws on global research and its own analysis of Australian and international equity managers to assess both the current state of gender diversity and its impact on investment teams.

• The current landscape: women remain significantly underrepresented across banking and finance roles. In the United States, only around 9.4% of fund managers are women.
• Why diversity matters: greater gender balance is linked to stronger business performance, including improved profitability. Achieving gender parity could increase Australia's GDP by an estimated 11%. Diverse teams demonstrate stronger collective problem-solving, increased creativity, and broader perspectives, and diversity helps reduce the risk of "groupthink" in investment decision-making.
• Industry response: gender diversity is increasingly being incorporated into investment manager due diligence processes. Australian superannuation funds are placing greater emphasis on diversity within both external managers and internal teams, and active ownership is being used as a lever to encourage diversity improvements across portfolio companies.
• Frontier's study: a 2017 survey of 84 Australian and global equity managers examined team composition, including gender, age, education and language diversity—highlighting the broader dimensions of diversity within investment teams.
• Read the full report: The Power of Gender Diversity in the Workplace (2018).

1.2 Oliver Wyman – Women in Financial Services (2016)

Based on analysis of 381 financial institutions across 32 countries, this report highlights the structural and cultural changes required to achieve meaningful gender balance.

• Female representation on boards is improving, but progress at executive committee level remains significantly slower.
• Despite sustained investment in recruitment and leadership development, advancement into senior leadership roles continues to lag.
• Achieving balance will require both structural reform and deeper cultural change across organisations.
• Read the full report: Women in Financial Services (2016).

1.3 CFA Institute – Gender Diversity in Investment Management (2016)

Drawing on a survey of more than 5,000 CFA members, this research explores the underlying causes of gender disparity in investment management.

• Key findings: women hold only around 1 in 10 senior leadership roles (CEO, CIO, CFO). Representation across key roles remains low: 10.2% of Chief Investment Officers, 13.9% of Traders, 14.9% of Portfolio Managers.
• Recommendations: promote investment management careers earlier, particularly at university level; increase awareness of flexible working arrangements within the industry; and improve organisational understanding of how workplace structure and flexibility impact diversity.
• The research also reinforces the link between diversity and better decision-making: investment challenges are complex, and homogenous teams are more likely to become constrained in their thinking, while broader diversity supports more robust outcomes.
• Read the full report: Gender Diversity in Investment Management (2016).

1.4 Morningstar – Fund Managers by Gender (2015)

Morningstar's analysis of US mutual fund managers found that fewer than 10% of fund managers are women.

• Women exclusively manage just 2% of industry assets, compared to 74% managed exclusively by men, with mixed-gender teams accounting for the remainder.
• The path forward: the evidence is clear, improving gender diversity is not only an equity issue, it is a performance and risk management imperative. While momentum is building, sustained progress will depend on continued industry focus, stronger accountability, and meaningful cultural change.
• Read the full report: Fund Managers by Gender (2015).

Mandate

This insights paper examines the ongoing challenge of gender diversity in investment management—what's driving it and what investors can do to improve outcomes. It reinforces the strong business case for diversity while highlighting key barriers that continue to limit female representation in leadership.

2.1 Gender Diversity in Investment Management: Why Progress Still Matters

Key challenges include:

• Limited visible role models: a shortage of women in senior leadership makes it harder for both women and men to envision women succeeding in these roles.
• Unequal access to opportunities: without equal development pathways, women may be underrepresented in leadership pipelines. Organisations must actively create opportunities that build skills and confidence.
• Confidence and self-advocacy gaps: women are less likely to self-promote, which can impact progression into senior roles.
• Structural and financial barriers: organisations can better support diversity through inclusive policies such as parental leave (for both men and women), return-to-work programs, flexible working arrangements, and pay equity.

2.2 Diversity in Investment Management: Benchmarking Insights

Commissioned by the Diversity Project, this study analysed employee-level data from more than 3,700 individuals across 24 UK firms, including 650 investment managers and adjacent talent. The findings highlight persistent structural and cultural barriers:

• Gender imbalance remains significant: only 22% of investment managers are women, compared to 78% men.
• Bias in hiring and promotion: recruitment and advancement are often perceived as favouring those who "fit the mould", reinforcing homogeneity and groupthink.
• Access to networks: success is often linked to informal or exclusive networks, which can disadvantage underrepresented groups.
• Perceptions of role inflexibility: investment and trading roles are commonly seen as incompatible with part-time or flexible work.
• Lack of diverse role models and inclusive culture: a shortage of visible diversity, combined with resistance to flexible working, continues to limit progress.

2.3 Women in Financial Services: Addressing the Mid-Career Gap

Drawing on research across 381 financial services organisations in 32 countries, this study identifies a critical "mid-career gap" where many women exit leadership pathways. Contributing factors include limited flexibility and stigma, inadequate support for family responsibilities, inequities in pay and promotion, and cultural barriers and unconscious bias.

• Within portfolio management specifically, three key issues stand out: industry culture and perception (the image of asset management can deter and fail to retain female talent); graduate pipeline challenges (greater engagement with universities and early-career talent is needed); and barriers to flexible working (while technology is enabling new ways of working, adoption remains uneven, and leadership plays a critical role in normalising flexibility by example).
• Driving change, from intention to impact: despite growing awareness, many organisations still treat diversity as a social or compliance issue rather than a commercial priority. Achieving meaningful progress requires structural change (policies, processes, and equitable pathways) and cultural change (inclusive leadership, sponsorship, and accountability). Only by addressing both can organisations unlock the full value of diverse talent and improve long-term performance.

3.1 Gender Diversity and Investment Performance

Research by Rainmaker, publisher of the SelectingSuper platform, highlights a clear link between gender diversity and stronger superannuation outcomes. Analysing MySuper products across not-for-profit funds, the study found that funds with higher female representation across leadership roles—including Chair, Deputy Chair, CEO and Trustee boards—consistently outperformed peers.

• 71% of more gender-diverse funds delivered above-average returns.
• Higher-performing funds achieved returns of 9.6% (1-year) and 8.0% (3-year); funds with lower diversity delivered 8.7% and 7.6% respectively.
• While the performance gap may appear modest, even a 40 basis point difference, compounded over a working lifetime, can translate into an additional $55,000 in retirement savings for the average member.

3.2 The Commercial Value of Gender Diversity

Analysis from Frontier Advisors reinforces the growing body of evidence linking gender diversity to improved business and investment outcomes, across global research and Frontier's own analysis of Australian and international equity managers:

• Stronger profitability: companies with more diverse executive teams are more likely to achieve above-average profitability.
• Improved financial performance and stability: greater female representation on boards is associated with higher returns and lower volatility in stock performance.
• Enhanced risk-adjusted returns: while based on a smaller sample, Frontier's research indicates that more gender-diverse investment teams may deliver superior risk-adjusted outcomes.
• These benefits are underpinned by diversity of thought and experience, which supports better decision-making, stronger risk identification, and more balanced investment perspectives.

3.3 Diversity as a Driver of Better Business Outcomes

Insights from AMP Capital highlight gender diversity as both a governance and performance advantage. Research consistently shows that organisations with more diverse leadership teams achieve higher returns on assets and invested capital, stronger governance outcomes, and better overall decision-making.

• A global study of 366 companies found that those in the top quartile for gender diversity were 15% more likely to outperform their industry peers financially.
• A five-year global study across 80 countries found that gender-balanced teams achieved higher employee engagement, improved brand perception, 12% greater client retention, and sustained growth in revenue and profitability.

3.4 Accelerating Progress: Insights from a Decade of Research

Despite increased focus, progress toward gender balance in leadership remains slow, with women holding only around 25% of management roles globally. A decade of research highlights two critical insights:

• Gender diversity drives performance: companies with the most women in executive teams achieved 22% average return on equity, compared to 15% for those with none, and 17% EBIT margins compared to 11% for those without female representation.
• Leadership diversity strengthens organisational health: diverse leadership teams demonstrate stronger organisational performance, supported by more effective leadership behaviours including people development, role modelling, inclusive decision-making, and collaboration and communication.
• From evidence to action: the evidence is clear, gender diversity is a commercial imperative, not just a social one. For investors and organisations alike, improving gender balance is not only about equity, it is about unlocking stronger performance, better decision-making, and more sustainable long-term outcomes.

4.1 Why Many Diversity Programs Fall Short

Harvard Business Review analysed more than 30 years of data across 800+ organisations and found that many traditional diversity initiatives—particularly mandatory training—have not led to more diverse workplaces. However, the research highlights several initiatives that consistently deliver results:

• Targeted recruitment: voluntary, targeted university recruitment increases manager engagement and improves outcomes, with studies showing up to a 10% increase in women in management within five years.
• Mentoring programs: structured mentoring reduces bias, builds capability, and expands access to career opportunities—particularly for women who may lack informal networks.
• Self-managed teams: cross-functional teams increase exposure to diverse perspectives, helping to break down stereotypes and improve representation in management.
• Social accountability: transparency through diversity taskforces and regular reporting can drive measurable progress, with some organisations achieving 9–30% increases in women in management.

4.2 Closing the Gender Gap in Investment Management

The CFA Institute's (2016) Gender Diversity in Investment Management report, based on responses from over 5,000 CFA members, highlights the scale of underrepresentation in the investment profession. Women currently represent 10.2% of Chief Investment Officers, 13.9% of Traders, and 14.9% of Portfolio Managers.

• The report recommends a stronger focus on promoting investment careers at the university level, increasing awareness of flexible work opportunities, and designing work structures that support diverse career pathways.
• It also emphasises that diverse teams make better decisions, particularly in complex investment environments where varied perspectives reduce the risk of groupthink.

4.3 The Role of Investors and Organisations

AMP Capital's (2019) Gender Diversity Report highlights that improving gender diversity requires coordinated action from both investors and organisations.

• Key recommendations include embedding diversity as a key performance indicator (KPI), actively championing the commercial benefits of diversity, ensuring equal access to opportunities including flexible work and equitable pay, and supporting development and progression across the talent pipeline.
• These actions can be applied internally and through investor influence on portfolio companies.

4.4 Building Inclusive Workplaces

Mercer's (2016) When Women Thrive: Financial Services Perspective, based on research across 583 organisations in 42 countries, identifies practical actions to accelerate gender diversity in financial services:

• Actively managing flexible work programs, with training to support managers and employees.
• Engaging the whole organisation, particularly middle managers and men.
• Strengthening the talent pipeline, including equitable access to P&L roles.
• Embedding pay equity and transparency, with regular gender-based analysis of pay and performance.

4.5 What Leading Organisations Are Doing Differently

Mercer's (2017) Diversity in Investment Management Benchmarking Study (for the Diversity Project), based on insights from over 3,700 employees across 24 UK firms, highlights practical actions that improve diversity outcomes:

• Promoting flexible work practices, identified as the most effective lever by both men and women.
• Extending flexibility into roles such as trading and portfolio management.
• Supporting employees returning from career breaks and showcasing non-traditional career pathways.
• Expanding access to mentoring, sponsorship, and development opportunities, and highlighting senior role models, including men working flexibly.

4.6 Structural and Cultural Change Must Go Together

Oliver Wyman's (2016) Women in Financial Services report, based on research across 381 organisations in 32 countries, finds that meaningful progress requires both structural solutions and cultural change.

• Structural priorities: building leadership pipelines; expanding flexible work and removing stigma; encouraging shared parental leave and return-to-work programs; and addressing pay and promotion gaps.
• Cultural priorities: creating inclusive environments free from unconscious bias; actively valuing diversity; and encouraging leadership behaviours that support gender balance.

4.7 Setting Targets That Drive Results

The Workplace Gender Equality Agency's guide, How to Set Gender Diversity Targets, outlines how organisations can effectively design and implement meaningful targets.

• Key considerations include using clear definitions and data-driven benchmarks, setting realistic and measurable targets, embedding accountability across leadership, aligning targets with business strategy, and addressing cultural and structural barriers to success.

4.8 From Diversity to Inclusion: Unlocking Performance

Deloitte's (2018) The Diversity & Inclusion Revolution: Eight Powerful Truths, drawing on multiple global studies, identifies key principles to improve outcomes: diversity of thinking drives innovation and reduces risk; inclusion is essential to unlock value; inclusive leadership is critical and must be intentional; middle managers play a pivotal role; systems and processes must evolve to drive behaviour change; clear, measurable goals are essential; external alignment with customer diversity matters; and cultural transformation, not compliance, is required.

• From insight to impact: across all research, the conclusion is clear. Diversity and inclusion must be actively designed, measured, and led. Organisations that succeed embed diversity into strategy, culture, and decision-making, unlocking stronger performance and more sustainable outcomes.

5.1 Future IM/Pact Ambassador

The FSC is proud to be an ambassador for Future IM/Pact, an industry-led initiative focused on attracting more diverse talent into investment teams across Australia's leading super funds and fund managers. High-performing investment teams rely on diverse perspectives and experiences, yet across the industry, teams remain largely Anglo-Celtic and male-dominated—particularly at entry level, where the majority of candidates for junior analyst roles are men. The initial focus is on increasing female participation, recognising that women remain significantly underrepresented in investment teams.

• Visit the Future IM/Pact website.
• Subscribe to the newsletter and encourage colleagues to do the same, and follow Future IM/Pact on social media (Facebook, LinkedIn, YouTube).

5.2 F3 – Future Females in Finance

F3 (Future Females in Finance) is a targeted program designed to encourage young women to explore careers in financial services, through a combination of education, exposure, and practical work experience. The program is tailored for school students (Years 10–12) and university students and early tertiary participants.

• For university students.
• For school students.
• For corporate partners: organisations can engage with F3 to access emerging talent and support the development of the next generation. To learn more, contact camilla@fthree.com.au or visit www.fthree.com.au.

5.3 30% Club – Growth Through Diversity

The 30% Club is a global, business-led initiative that advocates for greater gender balance in leadership, recognising its link to stronger governance and improved business performance. In Australia, the campaign set a target of achieving 30% female representation on ASX 200 boards, helping to drive measurable progress across corporate leadership.

• The 30% Club takes a collaborative, voluntary approach, working with CEOs and senior leaders to embed gender balance as a business priority.
• Learn more about the Australian Chapter and get involved, or follow 30% Club Australia on social media (including Twitter) to stay informed and engaged.

Mandate

The Women in Investment Management Charter was retired in March 2026. It has been replaced by FSC Guidance Note No. 38: Improving Gender Balance Within Investment Management Teams, which supports investment management firms in improving the representation of women within investment management teams over time.