The #MeToo movement catapulted the issues of sexual harassment and assault into Americans' collective consciousness and forced the public to reckon with the sexual power dynamics that have long permeated certain industries and personal interactions.
But while the alleged sexual misconduct of film producer Harvey Weinstein and others in niches like entertainment and politics have been thrust into the limelight, the financial advice industry has largely escaped a public reckoning in the #MeToo era.
That's despite evidence that overwhelmingly points to the opposite conclusion. Nearly 80% of financial advisers in a recent InvestmentNews survey said sexual harassment is a problem in the financial advice industry. More than 60% of the 345 participants in the survey were male.
Three in 10 advisers said they'd personally experienced sexual harassment — including assault, unwanted contact or requests, or suggestive remarks or messages — in the workplace. Five in 10 said they'd witnessed or experienced sexual harassment in the industry at least a couple of times.
"It absolutely still exists," Katherine Liola, president of Concentric Private Wealth, said of sexual harassment and misconduct in the industry. "It's still very present."
It's been more than two decades since female employees of brokerage Smith Barney Inc. filed the famed "Boom-Boom Room" class-action lawsuit, which alleged sexual harassment and pay discrimination, and exposed the male-centric, locker-room culture pervasive on Wall Street.
The lawsuit, in which Smith Barney paid $150 million in arbitration awards and settlements, prodded the industry to clean up its act and institute programs like sexual harassment training, according to discrimination attorneys.
Better today, but ...
As a result, the industry today is "dramatically different" than it was in the early 1990s, when inappropriate behavior toward female colleagues, including sexual advances, improper language and touching, was embedded in the culture of brokerage firms, said Linda Friedman, founding partner of Stowell & Friedman and the attorney who represented plaintiffs in the Smith Barney case.
However, this behavior hasn't disappeared. It persists in a more closeted, one-on-one fashion rather than industrywide, said Ms. Friedman, who believes the industry may even be backsliding.
One female adviser InvestmentNews spoke with said she was sexually assaulted last year at an industry conference by a man she considered to be a mentor. The man, a practice management representative for a turnkey asset management program, came to the adviser's hotel room under the pretense of having a friendly drink.
However, the situation quickly turned sinister, said the adviser, who wished to remain anonymous due to the sensitivity of the subject.
"He was on top of me, trying to kiss me, touching me, groping me. I was stuck laying there under him telling him to stop," said the woman.
"You don't expect someone who's 40-something, married and a mentor to try to sleep with you — alcohol or not," she said. "I didn't see that one coming."
Susan Quigley, a veteran financial planner, has been a victim of sexual harassment, and reported a number of issues to officials at a previous employer. Her male boss, for example, commented on the size of her breasts. Another male colleague told her she needed to wear makeup, and yet another made her stand in front of a room of people while he ridiculed her for being pregnant.
Female advisers agreed that while the industry atmosphere for women is better today than in the past, it is probably still worse than in most other industries because of the high ratio of men to women. For example, of the more than 83,000 professionals holding a certified financial planner designation at the end of 2018, only 23% were female, according to CFP Board statistics.
Abuse of power
"It's really about power," said Gloria Allred, a discrimination attorney who has represented women accusing many high-profile men, including Bill Cosby. "And generally, those who are in power are men — especially on Wall Street."
When asked if they had personally experienced sexual harassment in the workplace, 60% of the 124 women in the survey who answered the question said they had. Of the 206 men who answered, 13% said they had experienced it.
Ms. Liola of Concentric Private Wealth said she had to endure sexual comments from male advisers every week when she worked at a large broker-dealer in the early 2000s. That changed after she moved to the independent channel six years ago, she said.
However, she personally knows women both at wirehouses and on the independent side of the business who are still dealing with sexual harassment issues. Some have left the industry because of it, she said.
According to the InvestmentNews survey, on a monthly basis, 19% of female respondents deal with unwanted physical contact; 32% with inappropriate questions, remarks or jokes; 15% with obscene gestures, sounds or stares; and 14% with persistent, unwelcome requests. Two-thirds of the women who said they were victims of sexual harassment didn't make a complaint about the harassment.
Victims of sexual harassment on Wall Street are at a disadvantage when trying to seek redress, Ms. Allred and other attorneys said. Employment agreements often contain mandatory arbitration clauses and class-action waivers, forcing individuals into judicial venues that aren't as transparent as court proceedings and don't promote public accountability. Mediations are often subject to confidentiality agreements; arbitrations before the Financial Industry Regulatory Authority Inc. are similarly nontransparent.
In addition, those serving on arbitration panels are often white males with industry ties, attorneys said, though evidence suggests that Finra is trying to improve the diversity of its arbitrators.
Finra spokeswoman Michelle Ong said Finra arbitrators hear fewer than 10 sexual harassment cases per year. The regulator also makes all arbitration awards publicly available, and parties to the arbitration are free to publicly share as much information about their case as they choose.
Critics argue that Finra has no system of keeping track of sexual harassment in the industry. "If you grab a woman's breast, Finra doesn't require any reporting," Ms. Friedman said.
Roughly 40% of women in the InvestmentNews survey said a personal experience with sexual harassment played a role in a subsequent career decision — such as going independent, or leaving a firm or the industry altogether — which observers say helps perpetuate a lack of diversity in the industry.
"Like all decent Americans, we think this is a horrible thing and needs to be addressed," said David Knoch, president of 1st Global and chairman of the Financial Services Institute, a trade group for independent broker-dealers. "It's something that we pay a lot of attention to and talk about. We have policies on how we would respond and what we expect."
Addressing the issue
Some groups have taken steps recently to address sexual harassment in the industry. The XY Planning Network, a group of financial advisers primarily catering to millennial and Gen X clients, instituted an anti-harassment code of conduct for its annual conference beginning in 2017. XYPN staff reserve the right to throw an offender out of the conference without a refund and potentially bar the individual from attending its conferences in the future.
The Financial Planning Association last year adopted a similar conference policy called "Me Too, Meetings Too." Lauren Schadle, the group's CEO, said the policy has become a central piece of board and staff training, adding that the FPA is working with leaders of its chapters around the country to make the policy part of local meetings and events.
XYPN and FPA officials said the policies weren't developed as a result of specific issues at the organizations, but out of a general desire to foster a more inclusive environment.
Alan Moore, co-founder of XYPN, discussed incidents of sexual harassment occurring at industry conferences.
"These things do happen. It's unfortunate, but they do. You're taking away a wonderful networking and education opportunity if women are constantly being hit on and harassed," he said.
Ms. Liola said there are "some kick-ass, amazing men in our industry," some of whom have been moved to speak up for women's rights in their firms and communities.
"But as an industry we have to do way, way, way more," she said.