Laura Miller asks: what is financial advice’s problem with attracting more women and how can it be fixed?
Women and wealth management have a tricky relationship, with symbiotic difficulties both inside and outside the profession. The standard vision of a financial adviser is still pale, male, and stale – a grey-haired man in his 50s behind a desk.
Data supports the stereotype. In a Financial Conduct Authority response to a Freedom of Information (FOI) request by FTAdviser in April 2022, only 6% of advisers were under 30. Most (a third) were aged 50 to 59. Another FOI request from July 2022 showed just 16% of advisers were women. Countless studies have by now proven the value of diversity in organisations. So what is financial advice’s women problem – and how can it be fixed?
Raising an eyebrow
Fewer young women joining the ranks of financial advisers at the start of their careers is one roadblock. M&G Wealth Advice launched its own academy at the end of 2021 to train the next generation of advisers. The ratio of males to females coming into the M&G Wealth Academy? About 3:1.
Tom Hegarty, managing director at M&G Wealth Advice Partnership, says: “It is something the whole profession should raise an eyebrow about. I’d like to think that at the end of 2023 we’d have a more even split. There’s absolutely no reason for gender bias in the delivery of financial advice – if there are perception reasons, it’s something where we all must try harder to communicate the many benefits of becoming a financial adviser to all genders.”
The benefits women are looking for from a profession are often, though not always, centred around family life. Wealth management roles are well placed to offer such benefits, with a bit of effort. Gender parity in child rearing is still painfully slow to appear. So in the meantime, industry employers seeking to attract and retain female talent need to work with women’s real-life experiences.
To attract more women, I think the wealth management industry must shake off the perception that it’s not a place for women to carve out a career, by offering more flexibility and salaries that enable women to afford childcare, or schemes that would help them to pay for childcare
Isabelle Pinson, chief commercial officer at MoneyFarm, says: “To attract more women, I think the wealth management industry must shake off the perception that it’s not a place for women to carve out a career, by offering more flexibility and salaries that enable women to afford childcare, or schemes that would help them to pay for childcare.”
Women’s personal finances are hugely impacted by taking time off to have children, and the financial sector leads the charge in reminding them that their pensions are on average a third of the size of a comparable man’s, and to save and invest more to catch up.
For Philippa Heal, senior marketing executive at Curtis Banks, the industry could make a big contribution to improving this situation by getting its own house in order. She says: “It would be great to see employers and the industry providing alternatives to working part-time, making decisions on changing working hours easier, which can have a significant financial impact.”
Employers could also offer more generous maternity policies. This would make the profession stand out, attract and retain women within the sector, and reduce the gender savings gap by removing difficult decisions women may have to make, such as pausing pension contributions, Heal adds.
Without such forward-thinking policies, the inevitable happens; women exit the industry. More than a quarter (26%) of female senior decision-makers are set to leave their roles in 2023, making them twice as likely to leave as their male counterparts (13%), according to research this year from specialist change consultancy, Proteus. While not specifically about the wealth management industry, it is indicative of a wider trend.
Female talent acquisition strategies need women in visible senior leadership roles to show a career path to aspire to. MoneyFarm CCO Pinson says: “It is important to have good role models within the business, strong voices that play a key role in the culture of the firm.” For key roles, the recruitment process is critical, she adds. “We work hard to find talented women at every level for the business, and help them develop and grow.”
Growing profession
Financial advice is a profession in demand. According to Fidelity Adviser Solutions’ latest IFA DNA report in August 2022, 58% of advisers expect demand for advice to grow in the next five years, more than at any point since before the pandemic. But as the FCA data above shows, the largest cohort of financial advisers will be eyeing retirement in the next 10 years.
Attracting and, importantly, keeping more female talent makes sense for an industry keen to speak to a demographic that is growing but wary and typically ignored – female investors. MoneyFarm’s Pinson says: “The wealth management industry has a lot to offer and we need to hire more women. We need more women to champion it because we need to encourage women to invest in their future.”
Laura Miller is a freelance journalist
