There is currently a shortage of financial planners in the UK, so why are only 16% of them women? Samantha Secomb investigates
Some 84% of financial advisers in the UK are men. With so many initiatives encouraging more women into the profession, why is there still such a large gender imbalance?
The financial advice sector is made up of many small firms and these small companies struggle to provide expertise and resources to train and develop advisers internally. This lack of new talent leaves retiring advisers struggling to find individuals willing to buy equity stakes and succeed them in their practices. There is no fundamental reason why more women cannot be competent and effective financial advisers. But why are they unable to make the transition into the adviser role, or are they in fact choosing not to advise clients?
I conducted semi-structured interviews with 15 professionally qualified women based in the UK to better understand how women navigate careers in financial services. Most of these women ended up in financial planning roles by accident. It was their preferred option when seeking paid work, rather than a pre-selected option for which they had studied, prepared and sought out an entry-level role. Those who selected a career path in financial planning associated it with helping others and being a positive influence on people’s financial wellbeing.
Some women transferred away from the sales environment to a paraplanning role. This was to escape some undesirable parts of the role, while capitalising on their skills, knowledge and qualifications. Others reported being able to earn more in part-time or freelance roles. Though this can necessitate moving jobs, changing employers or employment status to accommodate any family obligations. Those who remained in financial services reported their intention to return to a more focused career stage once these demands reduce.
Based on the responses where women thrive on being involved in work they feel good about, their desire to be appreciated, trusted and liked, clients could benefit from a rewarding experience with a female financial planner
Some paraplanning firms have structures that deliberately seem to target female employees. With advisers outsourcing technical work to these firms, this contributes to the ceiling for qualified women. The most common stereotypical judgement in the research was around the idea that women would be less committed to a career because they were likely to prioritise having a family at some stage in their lives. This is perceived as a disadvantage to them because men are assumed to be able to continue working, regardless of whether they have a family or not.
One interviewee described how she felt discriminated against, simply because it was expected for her to have children: “I basically feel that because I was married and I was of childbearing age, I think that held me back quite a bit from promotion and stuff like that. Nobody will say it, but we all think it. We don’t want to take on somebody who’s going to go on maternity. Because what do we do? As I said, I think that’s always in the back of your mind when you hire a woman.”
This stereotyping was identified as having a negative influence on women’s career progression. There was also a sense of acceptance among these candidates that this was normal and they had no expectation that this discrimination would change, as explained by another interviewee: “Every male candidate was told that he could become an adviser. But women were constantly being told that the best they could do is probably be a paraplanner if they tried hard. And that happened all the time. And it was so, so wrong. And I think we probably were all conditioned somewhere there in the background, without even realising that, you know, the furthest we can go is to be a paraplanner. If we’re lucky.”
Women are not perceived as a natural fit for the role of financial planner. It is traditionally seen as a competitive and demanding role, more aligned to the natural characteristics associated with men. The role is about long-term forecasting and planning for clients, with periodic, disciplined reviews to measure and adjust progress against planning.
Unlike a stockbroker, where the timing of decisions and actions is sensitive, a financial planner does not need to respond immediately, but can plan and organise work in advance. The long hours and full-time availability stereotypically associated with the role are a by-product of the historic sales culture. Presenteeism is also an artificial echo of the past but continues to inform the stereotypical benchmark for success.
Changing the culture of traditionally male-dominated workplaces dominating the financial planning sector is a slow process. But, considering the current shortage of financial planners in the UK, it makes sense to attract more female talent. Based on the responses where women thrive on being involved in work they feel good about, their desire to be appreciated, trusted and liked, clients could benefit from a rewarding experience with a female financial planner.
The diversity of mixed gender teams introduces fresh thinking around solution building, better risk management and quality control, as client outcomes are balanced with production targets, with the risk and reward shared by the entire team. This type of team approach serves clients well, helps the business manage risk and creates more inclusive work structures.
To read the full report – Women’s career progression in the UK financial planning sector, visit: www.thepfs.org/103584
Samantha Secomb is a Chartered financial planner at Women’s Wealth