Sarah Lord examines the lack of diversity in the profession and what is being done to change it
Irecently attended a great one-day conference – it was wonderful to get back to such a big event, see so many people in person and catch up. However, one thing really struck me – the lack of gender diversity. There were more than 300 people there and I estimate less than 20% were females. I recognise that this is by no means a fault of the organisers; it is, however, the reality of our profession – it has been male-dominated for years.
A Financial Conduct Authority (FCA) research study in 2019 found that “gender diversity is low at the industry level overall, with women making up just around 17% of FCA-approved individuals”. This stark number is aligned with my recent experience at the event and demonstrates why there is still a long way to go for us to start to tip the balance in favour of a truly diverse and inclusive profession.
I believe that historically, as a profession, we have focused on the lack of gender diversity – but if we only focus on this, we are missing so much. Diversity and inclusion (D&I) is not just about gender, it is about making sure we really truly are a diverse and inclusive profession across gender, religion, ethnicity, LGBT+, disability and socioeconomic factors.
There have been a number of FCA speeches on D&I, most notably by the regulator’s CEO Nikhil Rathi in March 2021, on why diversity and inclusion are regulatory issues.
Lack of diversity at the top raises questions about firms’ ability to understand the different communities they serve
The speech from Mr Rathi highlighted that the lack of diversity at the top raises questions about firms’ ability to understand the different communities they serve and their different needs – I couldn’t agree with this more. He also raised the question of whether a firm can adequately respond to the needs of its consumers if it does not have the diverse background required to overcome biases. Furthermore, research suggests that greater gender diversity improves risk management culture.
Since this speech a year ago, the FCA has published a number of documents on the subject, while more detailed proposals from the joint regulators – including the FCA – are expected in the coming months, which I am sure will set out the need for firms to have a greater focus on D&I.
However, we should not be waiting for the regulators to tell us what good practice is for D&I, which is why D&I is a core pillar of the PFS board’s annual business plan. The PFS board and I believe that good
D&I practice engenders a positive culture and will make our profession more attractive to a diverse range of individuals, which in turn could lead to more individuals seeking financial advice.
I would love to hear members’ thoughts on what great D&I engagement looks like and how we, as your professional body, can support you more so that we are driving change together.
Sarah Lord is president of the Personal Finance Society