Powerful Women Pay A Price

Sheryl Sandberg, Facebook Inc. (NASDAQ:FB) Chief Operating Officer, wrote a book titled, Lean In: Women, Work, and the Will to Lead. The crux of the book’s message is that equal treatment of genders remains a far way off. To remedy this problem, argues Sandberg, more women need to be in powerful positions.

It isn’t that all women need to be political, financial or business leaders. Rather, the message is that women, in general, would benefit from more women in leadership positions; leaders who would give voice to women’s needs and concerns thereby resulting in more equitable regard for all women.

But hey, I’m a guy. Best to get some back up here from an extraordinary woman, Christine Lagarde, Managing Director, International Monetary Fund, who said:

When it comes to thinking about women in powerful positions, we are too often blinded by the daggers of the mind, infected by the malignant mind bugs that mire us in the prejudices of the past.

We need a 21st century mentality for women’s economic participation. We need to flush away the flotsam of ingrained gender inequality.”

Courage and Smarts

Certainly, many women today have taken hold the reins and then some. A few random examples include: Ginni Rometty, IBM Chief Executive Officer (NYSE:IBM); Indra Nooyi, Pepsi Chief Executive Officer (NYSE:PEP); Angela Merkel, Chancellor of Germany; Janet Yellen, USA Federal Reserve Chair; Jody Wilson-Raybould, Attorney General of Canada; and Abigail Johnson, Fidelity Investments USA Chief Executive Officer.

These women are to be admired for a host of reasons, not the least of which is overcoming bias inherent in a societal system built by, and favoring, men.

As importantly, they may be looked upon as positive role models, as people contributing to refashioning a society blinking less and less when a woman rises to the top, be it in business, politics, finance, law, media, medicine or any other industry.

And owing to the courage and smarts of this sort of exceptional woman, my teenage daughter is growing up in a society where arbitrary, destructive, gender barriers continue to be pushed aside by determined, forward thinking, progressive, not-stuck-in-the-Pleistocene-era women and men. For this I am grateful. For a kinder, gentler world, we will all benefit.

Cost Of Breaking Glass Ceiling

Yet, is there a downside cost to women climbing a stairway to the corner office?

While shattering of the metaphorical glass ceiling becomes more commonplace, and some women achieve wealth and/or power during their ascent, career success may come at the expense of marriage.

According to results of a study undertaken by psychology researchers Dr. Brian Lewis (University of California in Los Angeles) and Stephanie L. Brown (University of Michigan), published in the journal Evolution and Human Behaviour, many men tolerate, accept, even embrace women participating in the economy on a more equal basis. However, when it comes to wading into the marriage market, men of all stripes show a marked preference for less accomplished women.

The theory goes like this: men’s preference for less dominant women is “rooted in the evolutionary drive to pass on genes to the next generation.”

Meaning, a long time ago, thy creature known as knuckle dragging man possessed limited resources. Not wanting to dedicate sparse means to another man’s child, he sought a submissive woman, one whose behaviour he could “exert some kind of influence” over in order to reduce the threat of paternal uncertainty. Um … to restate that in street lingo, a woman whom HE could control, who would not be seduced by some other hairy, grunting dude.

And as a result of man’s historical preference for obedient women, successive generations of males inherited genes encoding attraction to compliant women.

Evolution Interruptus

So, the more women achieve, the less desirable they become?

If the study’s findings are accurate then, not unlike fruit flies, man is biologically programmed to behave a certain way, including seeking control of his mate. If so, then vanity and insecurity may no longer be held responsible for man’s general avoidance of more accomplished women since, at least in a romantic context, evolution may have passed him by.

 

Should You Trust Your Bank?

My 25-year young niece (let’s call her Millennial Woman) is employed full time earning a reasonable income. Being a savvy saver, she’s now taken the first step to becoming an investor by opening an investment account with her friendly neighborhood bank. Why did she choose Friendly Neighborhood Bank? I asked the same question.

Millennial Woman (WM). “Well, I have my bank account with them so I thought it would be convenient to have my investments there too.”

BuddhaMoney (BM). “And the bank suggested what for your investments?”

MW. “The person I dealt with was super nice and said my money should go into a Balanced Mutual Fund.”

BM. “Why a Balanced Fund?”

MW. “I don’t know exactly but the bank said it was suitable for me given my age and risk tolerance.”

BM. “Hmmm. As for the Balanced Fund, is it managed by Friendly Neighborhood Bank.”

MW. “Yes, how did you know?”

BM. “Call it a wild guess. Did the bank suggest any other investment options?”

MW. “No, but it seemed fine and, like I said, the bank person was so nice.”

BM. (silently) Oy.

Banks Are In The Trust BUSINESS

TD Bank is the 10th largest bank in the USA (NYSE:TD), 2nd largest in Canada (TSE:TD), and ranks number 13 globally. Here’s what Bharat Masrani, CEO of TD Bank, recently said:

“TD is in the trust business. We know we must earn our customers’ trust before we earn their business.”

https://www.thestar.com/business/2017/03/13/report-that-td-bank-employees-broke-law-doesnt-reflect-workplace-culture-ceo-says.html

Masrani is absolutely correct. People deposit their money with financial institutions they believe are trustworthy.

From what I gather, Millennial Woman agreed to open an investment account with Friendly Neighborhood Bank, and follow the financial adviser’s advice to place her funds in an investment product managed by Friendly Neighborhood Bank, because the financial adviser came across as ‘nice’. And ‘nice’ translated to trustworthy.

Look, here’s the thing you have to recognize: first and foremost, banking is a Business. A huge business with tremendous profits at stake [in December, 2016, TD reported quarterly profit of $2.3 Billion (CAD); in January, 2017, Wells Fargo – the largest American bank – reported quarterly profit of $5.3 Billion (USD)]

In business (I’ll state the obvious here), you’re selling services and/or products. And when you’re selling something to the public, the odds of closing the sale are a whole lot higher when you put on a smiley face and make nice with the buyer (i.e., you, the potential bank customer, are the buyer).

So when you’re saying that the salesperson (i.e., financial advisor) is ‘nice’, I’m saying: that’s all fine and good and yes most, if not all, of us would prefer to interact with kind, respectful people. But when it comes to deciding how best to manage your money, really, the salesperson must be offering something more than a pleasant disposition, an attractive face, or a free pen! The salesperson absolutely must convince you why Friendly Neighborhood Bank is the best place for your money to grow.

Banks Are In The Sales, Sales, SALES BUSINESS!

The above quote from Bharat Masrani? It was given in response to media stories detailing TD Bank’s aggressive sales tactics at its Canadian based branches.

Should I be shaking my head, waving a finger, or judging TD Bank for allegedly aggressive sales tactics that are nevertheless within ethical boundaries? Nope. I mean, come on, banks are in the Sales Business! You want to be successful at sales, well, you’ve got to step up and SELL (i.e., persuade, convince, coax, sway, influence, cajole …).

And as a potential customer, my responsibility is to know who I’m dealing with and what is their objective (SALES!). My responsibility is to know that one of the prime mandates of business is growth, and growth comes both from attracting more customers and selling more products and services to existing customers.

Not so coincidentally, Wells Fargo (NYSE:WFC) was recently subject to similar charges as those levelled against TD Bank. The difference being that Wells Fargo was found to have gone a step further, crossing the ethical/legal line of permitted sales practices and subsequently having their knuckles rapped by financial regulators.

https://www.washingtonpost.com/business/economy/it-goes-beyond-wells-fargo-concerns-grow-over-sales-tactics-in-banking-industry/2016/09/16/d83bf4c0-7b73-11e6-beac-57a4a412e93a_story.html?utm_term=.114a4f895a41

Let me be clear here: banks crossing ethical/legal lines should be held accountable and the public should be protected from predatory practices. That said, there’s nothing offside about driving employees hard for the purpose of increasing sales and thereby increasing the bottom line. It happens, and it will continue to happen, and blathering and complaining about a bank’s behavior won’t do much but raise the complainer’s blood pressure.

So … as a consumer, my best line of defense is educating myself about the workings of the financial industry. Because the old saying, ‘knowledge is power’ rings true. And I’m a HUGE fan of self-empowerment.


unknown

Enter Buddha

Unconditionally trust your Self, advocate for your Self, know when to place your Self first.


Trust, But Not Blindly

What could Millennial Woman have done differently?

  • Before meeting with Friendly Neighborhood Bank, research the competition. Learn about the offerings of other financial institutions. With this knowledge in hand, MW would be in a strong position to determine whether Friendly Neighborhood Bank is truly offering the best solutions for her.
  • Recognize that, while an effective salesperson will make you feel good about your self in the moment, employees of Friendly Neighborhood Bank are not in the business of making friends. They are in the business of sales. So put your ego aside and don’t be flattered by the salesperson’s fawning attention. This is a part of their job that assists with closing the deal with a potential customer.
  • Knowing you are dealing with a salesperson, ask questions. For example, given that there exist thousands of mutual funds offered by hundreds if not thousands of mutual fund companies, why should MW buy a mutual fund sold by Friendly Neighborhood Bank? Is there a conflict of interest here? (short answer: yes, of course there is; banks push their own products not because their products are necessarily best for you, the consumer, but because this is more lucrative for them because they earn management fees from their own Funds).
  • Ask not only why you should buy a particular mutual fund, but why you should buy a mutual fund at all? This doesn’t mean that you should not buy a mutual fund, but you should explore the investment universe, and especially consider Index Funds, which typically carry a much lower management fee and perform as well or better than an actively managed mutual fund.
  • Ask why you even need a financial adviser when a Robo-Advisor may perform better for your portfolio.
  • At the end of the meeting, do not commit one way or the other. Simply say that you will think about the information you have been given and will contact Friendly Neighborhood Bank shortly to let them know of your decision. This avoids you being pressured into making an impulsive decision, and gives you time to conduct as much research as necessary to determine which financial institution and which investment products best suit your needs.

Caring For Your Self

As for MW, she’s one amazing person who’s excited and nervous about  entering the world of investing. And she’s agreed to think about what I’m saying here in this post, and to take time to process how this all applies to her situation. Because while she’s still holding fast to her opinion that the financial advisor at Friendly Neighborhood Bank is nice, she also recognizes that her financial future is best cared for when she’s fully informed of all options, and by making decisions that are best for her financial health.