Sexual harassment lawyer Eric Bachman spoke with WealthManagement.com about the persistent problem of sexual harassment against female financial advisors and why so few of them report this illegal behavior.
“It’s really necessary for [firms] to be out in front of this and treat this like a real business problem that they need to be figuring out the solution to and giving it the appropriate prioritization within the organization,” says Eric Bachman, who founded Bachman Law. “And until that happens, you’re going to keep seeing sexual harassment problems in this industry.”
Examples of harassment among financial advisors
According to Wealth Management.Com’s reporting, examples of the sexual harassment include clients coming up to a female financial advisor and kissing her out of the blue. When she complained, her manager said, “I expect you to do whatever it takes to keep that client.”
Recent high-profile cases involve different firms, such as Fidelity and Morgan Stanley, who fired top performers and executives accused of sexual harassment.
But for every case that is investigated and some measure of accountability is imposed, countless other instances of harassment go unreported or are simply ignored by the company.
Indeed,
in a recent WealthManagement.com survey, nearly 62 percent of respondents who were harassed or witnessed harassment said they did not use the protocols those firms have in place to address the incident. That number is nearly 66 percent for women.
According to WealthManagement.com, a range of reasons exist for why the harassment is not reported, including “fear of retaliation and ostracism within the office, the fact that the offender was the victim’s manager or a belief that the complaint would not be taken seriously.”
Steps to take to better address sexual harassment in the financial services industry
It would be unusual, not to mention bordering on legal malpractice, for a company not to have any policies for reporting harassment in place. But, as the survey results above make clear, if 66% of female financial advisors don’t use these policies to report the harassment, then something is not working correctly.
“You can have protocols in place that look great in theory, but if nobody is ever actually disciplined for having harassed somebody, then those protocols start to look like your complaint goes into a black hole and you never know what has happened other than you start to fear that you’ll be retaliated against,” Bachman says.
One issue to be tackled is that firms must investigate and address harassment allegations even if it involves a “rainmaker” or ‘big producer.” “These are people who have excelled in their fields and have earned a stature that warrants certain privileges,” according to Fran Sempler. “I think anyone who has worked in the professions I mentioned knows at least one of these people, and recognize fully that while there is increasing likelihood that employers will act in the face of their bad behavior, it is more likely that the reporting target be mollified than the harassment stop,” Sempler noted.
Bachman agrees. “If it’s a high producer within the firm who’s doing the harassing, you’re going to find a lot of the times that there’s even less stomach by the firm to go after that person and hold them accountable precisely because they are making the firm so much money,” he says.
Another novel approach is to partially tie managers’ bonuses to how well they promote and advance the company’s diversity and anti-discrimination policies. This is consistent with an idea suggested by former U.S. Attorney General Eric Holder in his report regarding Uber’s diversity issue. “Certainly, in the financial services industry money talks, and folks are going to take notice where it starts to hit them in the wallet,” Bachman says.
Finally, the vicious cycle of the glass ceiling fueling sexual harassment cannot be ignored.
“I think [women are] going to be more likely to actually take concrete action against folks who’ve been shown to be harassers, so it’s a little bit of a chicken and the egg in terms of glass ceiling and sexual harassment,” Bachman says. “Hopefully, as women continue to attain higher positions in these financial services companies, that will bring about much needed change to the workplace sexual harassment environment.”
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