Sallie Krawcheck at RaymondJames Women's Symposium in 2014 (Photo: Bob Thompson)

Ellevest CEO Sallie Krawcheck isspeaking out about what can be done for the financial servicesbusiness to improve not only its "conference culture" but also itshiring and promotion of women. 

The co-founder of thedigital-advice platform for women posted her remarks in the wake of FisherInvestments Chairman Ken Fisher's lewd comments at a recent industryevent. 

Referring to Fisher's analogy"that winning assetmanagement business is akin to 'getting in a girl's pants,"Krawcheck says in the blog post, "[n]ot even a woman's. A girl's.Ick."

The former head of wealthmanagement at Bank of America and Citigroup added: "This is onecreepy man. A creepy man whose company has been entrusted with $112billion in client assets, for public pensions andindividuals."

While some media has emphasized"conference culture" in its coverage and the need to change it, sowomen "feel welcome," she said, the issue at stake is "bigger thanthat: It's about women feeling — and being — welcome not just atfinancial services conferences, but in the financial servicesindustry itself."

Krawcheck continues: "Who thinksKen Fisher's disrespect for women stops when he walks off stage andinto his company's headquarters? No one."

In fact, Fisher Investments — which has seen some $3 billion inredemptions since Fisher made the remarks at a closed conferencesession on Oct. 9 — has an all-male senior investment team,Krawcheck points out. His executive team includes seven men andfour women.

'Ripple Effects'

Women make up some 10% of fundmanagers working with just 2% of assets, and diversity in financialservices seems to be getting worse — namely at thesenior-management level.

In a 2015 interview with ThinkAdvisor, Krawcheckexplained that after the financial crisis, "what I saw happeningwas a lot of 'Geez, we should have that guy in that job because wecan't afford to take on any risk.' We all tend to view people whoare different from us as being riskier."

In a blog post published Monday, advisor consultant SonyaDreizler shared the stories of women in finance who have faced discrimination at work. An earlier postdetailed sexual assaults at industry events.

Krawcheck said in her blog postthat the industry "has been almost completely silent during the#MeToo crisis."

She continued: "But it's evenbigger than that. Because who thinks the Ken Fishers of theworld suddenly stop disrespecting women when they start makingtheir investment and business decisions?"

Her answer: "The ripple effectof executives' decisions can be enormous, because the financialservices industry serves as the lifeblood of oureconomy."

The financial services businessallocates capital in ways that result in some entities with winsand others with losses — and "women have, on average, [have] lost,"according to Krawcheck, who points to the higher rates they pay formortgage loans, for instance.

With the percentage of femaleadvisors "stuck" at about 15% and an array of related issues, theEllevest co-founder asks: "Who is tired of all of this state ofaffairs? We all should be."

What to Do

The path forward can include,for instance, divesting funds from firms"that do not support womenand put it in those that do."

Krawcheck says askingthese four questions of afinancial company is crucial:

1. Does the firm require employees to agree to mandatoryarbitration for sexual harassment claims?

Forcing women into arbitrationis "why sexual harassment in the industry continues," she says, andwhy "so many who receive settlements are forced to signconfidentiality agreements.

2. Do you "go beyond platitudes" and have an equalnumber of women and men in senior leadership and in profit-and-lossroles?

Krawcheck suggests finding outwhat percentage of a senior leadership team are female, forexample, and what percentage of client-facing staff and employeeswith p&l responsibilities are.

"Anything below 50% women is toolow," she said. 

3. What is the firm's gender and ethnic paygap?

"Anything less than fullequality here is unacceptable, because it is straightforward tomeasure and to fix," the Ellevate leader said.

4. Does the firm invest with "an eye togender"?

If not, "then industrystatistics showthat they overwhelmingly invest in men," according toKrawcheck.

She adds that Fisher's responseto the backlash against him and Fisher Investments "has followed asadly predictable route of first pushback, then a standard apologyand promise to do better, then the establishment of a 'diversitytask force.'"

She says more and more peopledon't want to do business with people and firms that "make ussquirm in embarrassment at a conference. And none of us shouldallow our money to be managed at a company at which we wouldn't letour daughters work."

Speaking to Fisher Investments'clients, Krawcheck stated: "The next move is yours. Will you followthe institutional investors — Michigan, Boston, Philadelphia,Oakland — who have begun to pull their assets? Customers of thefinancial services industry: Let's do this thing."