What if women ran Wall Street? Could the financial meltdown that was precipitated by aggressive, greedy risk-takers have been avoided? Not only those who caused it, but also those in the government who were trying to fix it were, in almost all cases, men. What happened at Bear Stearns, Merrill Lynch, AIG and Lehman Brothers was largely because they were full of young, super-ambitious risk-takers — type-A guys who knew that the risks they were taking would be borne by some faceless other and who basically didn’t care- A toxic combination. What’s wrong with this picture, and why is this the picture anyway? Could a little more diversity and some female perspective have tempered some of the more outrageous decisions that were made? As neuroscientist Joe Herbert observes, “The banking crisis was caused by doing what no society ever allows: permitting young males to behave in an unregulated way. Anyone who studied neurobiology would have predicted disaster.”

Of course, some would say that the blame really falls on senior executives and regulators, not over-confident traders, but the question remains: Why aren’t there more women in high places in the financial world?

Representation of women in financial jobs

Women make up only about 20 percent of the financial advisers in the United States, which is far from reflective of the market in general. Women control 83 percent of household spending — about a trillion dollars a year — but more important for the financial services professions, they make up the majority of wealthy Americans today, and they are expected to be two-thirds of all wealthy Americans by 2019. According to the Financial Women’s Association, women made up just above 10 percent of executives on Wall Street in 2008, a percentage that slipped during the recession to just below 10 percent in 2009. But it’s not just Wall Street: The Federal Bureau of Labor Statistics shows that the number of women employed in financial services firms has declined over the past 10 years, while the number of men has grown. This statistic is upside-down, given the growth in the number of women in the work force, which has grown by 4.1 percent vs. only 0.5 percent for men.

According to The Wall Street Journal, from 2000 to 2009 women’s employment in the financial services industry dropped by 2.6 percent, while men’s employment in the industry rose by 9.6 percent. Women aged 25-35 in the industry dropped by 16.5 percent, while men in the same age group rose by 7.3 percent. Once in the industry, though, women tend to stick it out better than men, as women over age 55 grew by 56 percent, compared to only 34 percent for men in the same age group — or maybe men make enough additional money to retire earlier. (More about the pay disparity later.) Despite their limited representation, according to Bloomberg News, five times as many women as men were laid off after the start of the recession. Part of the reason for the decline in women in financial services may be that many women in the industry worked in lower-level clerical jobs in “back office” operations of financial services companies, and many of these jobs have been lost to automation. While the Women’s Bureau reports that women received 44 percent of M.B.A.s in 2007, in the securities industry, only 11.3 percent of corporate officers are women, while rank-and-file tax-preparers in the tax preparation industry are 65.9 percent female, and accountants and auditors in the accounting industry are 61.8 percent female. They make up 59.3 percent of budget analysts and 62.8 percent of insurance underwriters.

Challenges of gender

While women are uniquely suited to the financial industry, part of the reason for their under-representation in the corner office has to do with challenges related to the demands of the job, pay disparity and the old-boys club. As mentioned above, 83 percent of household spending is controlled by women- and they make up more than half of wealthy Americans. Sometimes that’s because their husbands have died, leaving them the reins to the family fortune, and sometimes that’s because they’ve risen to the top on their own. In any case, women — and not always type-A women — are a large part of the market, so women should, if logic prevailed, be a large part of the profession. Many women would prefer a woman as a financial advisor, financial planner or stockbroker — one who understands issues that are sometimes unique to women. What’s more, many professional women who prefer a helping role and who may once have looked only to nursing or teaching find that a job in financial services can also make a hugely positive impact on other people’s lives by helping their clients to reach their financial goals, to protect their families and to achieve peace of mind.

Many jobs in financial services require — or at least benefit from — people who are empathetic listeners and relationship builders. And it’s certainly possible that the caring, sensitivity, lack of ego and risk aversion that are often related to the “feminine” side of the species are what might have saved us from the Wall Street meltdown. The challenges women face in financial services jobs begin with the long-accepted demands of the job, which can be family-unfriendly. While part-time jobs in the field are few and far between, full-time work can mean 60 or 70 hours a week. Among the white-collar fields, the financial industry tends to be uniquely difficult for combining work and family, and taking time off can result in big penalties, both financial and in terms of advancement. In medicine, the salary of a person who took 18 months off before returning to work averaged 16 percent less than that of someone who had not done so; the gap was about 29 percent for lawyers and Ph.D.s, and about 25 percent overall for people with no graduate degree.

However, for M.B.A.s, many of whom work in the financial fields, it was 41 percent.

As for pay disparity, according to Bloomberg, the median income of women in finance in 2000 was 63.9 percent of that of men, and in 2007 it had actually dropped to 58.8 percent. This 41-percent difference is the largest among the 13 industries that the Government Accounting Office, on whose statistics Bloomberg based its figures, surveyed. In addition, only two other industries saw an increase in the gap in that time period. Overall, while women are making progress, with their pay parity rising to around 80 percent of men’s, the financial industry lags far behind. Not surprisingly, a survey by the Financial Women’s Association found that 65 percent of women in the industry believe that women have to work harder than men to get the same rewards, while only 13 percent of men think so; 51 percent of women in the industry perceive that women are paid less than men for doing similar jobs, but only 8 percent of men do; and only 18 percent of women think that opportunities for women to enter the ranks of senior leadership have increased, while half of men think the door is open for women.

As in many professions, the wage gap for women in the financial industry is there partly because women are traditionally less effective at negotiating their salaries than men are, and the men who decide those salaries often take advantage of that fact. Women tend to be less comfortable aggressively “tooting their own horns” or taking the risk of being turned down. They tend to think that if they work hard, someone will notice. They may notice, but the pay doesn’t necessarily follow without the worker’s demanding it. Then there’s the problem of the old boys’ network. Monica McGrath, an adjunct professor of management at the Wharton School, points out that women in the industry “do work hard and want to, but they want it to pay off,” and it’s not clear that it will on Wall Street. “Women today have been educated in an environment where at least half the people in the room are women,” she says. “Why would they choose a field that’s male-dominated, where it’s going to be hard and not pleasant … and where the payoff is uncertain?”

In a survey of people in the financial industry, 32 percent of women responded that they had experienced harassment. Thirteen percent (as compared to 1 percent of men) said they had received unwanted sexual attention, 16 percent (5 percent of men) said sexist comments were tolerated, and 13 percent (6 percent of men) said sexual remarks were tolerated. Eleven percent of women perceived that they were treated unfairly because they were women, compared with only 3 percent of men. Male-dominated industries often fail to see that the differences in how men and women respond to stress are all indications of stress, not indications of strengths vs. weakness. If a man responds to a setback by throwing a telephone across the room, it may be seen as aggressive and macho, while a woman who tears up is seen as weak, unstable and emotional. Both responses reflect “loss of cool,” but a male-dominated industry punishes one and admires the other.

The way of the future?

In the time-honored tradition of “if you can’t join ’em, beat ’em,” many women-owned financial firms have sprung up as women move away from the large, brand-name corporations where they have experienced difficulties to form their own. It’s possible that one of these firms is the right way to go for many women who are looking for a place to help them manage their money.

Of course, the other option is to hide your money in your mattress, but getting a little help managing your finances can be a good move, whether you consult a mortgage broker for a home purchase or hire a money manager to handle everything from the light bill to your investment portfolio. If you’re a woman, when you’re thinking about who can best serve you in these roles, it’s worth considering a woman — whether in a woman-owned firm or a woman operating out of a brand-name firm. You may find that she shares your worldview, understands what drives you and is willing to put your objectives in the forefront in a way that is not always traditionally practiced in the field.