A new working paper of the National Bureau of Economic Research authored by finance professors at the University of Minnesota, the University of Chicago, and Stanford University, finds that women professionals in financial firms tend to face harsher discipline after they have been accused of misconduct.
The report finds that women financial advisers are half as likely as their male colleagues to commit misconduct. And when they do commit infractions they tend to be less severe than the men who commit the same offenses. But the study found that after cases of misconduct 55 percent of men – but only 45 percent of women – remain with the same firm. For those who stay on, women who committed misconduct are 67 percent less likely to be promoted relative to other female advisers. For men the figure is 19 percent, according to the study.
For those who leave the firm at which they were employed, 53 percent of men – but 67 percent of women – are forced to leave the financial industry. The authors state that “firms in which males comprise a greater percentage of executives/owners are more likely to punish female advisers more severely and hire fewer females with a record of past misconduct.”
The authors conclude that “the financial advisory industry is willing to give male advisers a second chance, while female advisers are likely to be cast from the industry.”
The full report, “When Harry Fired Sally: The Double Standard in Punishing Misconduct,” may be accessed here.