Women and wealth management are like oil and water – they don’t mix. Throw a dart into the world of financial advisers and you will hit an older, white man. So what is going on?
Study after study tells the same story. Research by NextWealth and the Personal Finance Society (PFS) in November 2019 found out of 482 PFS members, just a fifth (20%) of financial planners were female.
This is worse than even the Financial Conduct Authority’s (FCA) estimates from March. It was forced to confront the issue by a Freedom of Information request.
Out of 35,000 individuals with advice permissions across banks, building societies, investment managers and stockbrokers – some 5,800 firms – less than a third are female.
Even this is only a guess. The FCA does not ask for sex information on approved person applications. It assumes whether the CF30 applicant is male or female based on the title they use, such as Mr, Mrs, or Ms.
The financial advice sector is clearly behind the curve when it comes to improving diversity. What can it do to bring more women into the profession?
1. Be a mentor
Are you the senior employee in a financial advice firm with women in more junior roles? Ask them what they want from a future in financial services.
If they currently work in admin, paraplanning or office management, would they like to move into financial advising? Where they are keen, structure a progression plan with them that supports them in achieving their goals.
This could be paying for them to take financial adviser exams and allowing time off for studying, as well as practical help such as days spent shadowing the firm’s current advisers.
2. Make work flexible
A law change in 2014 with the introduction of the Children’s and Families Act should have freed up working practices for everyone, and helped the lives of women in particular, who bear the brunt of juggling caring responsibilities with jobs.
Under the Act, employees who have worked for the same employer for at least 26 weeks are eligible to request to work flexibly. This could be having flexible start and finish times, or working from home.
But employers don’t have to say ‘yes’. Just one in three workers in the UK have the option to work from home or remotely, according to a study by Tiger Recruitment in December, 7% fewer than a similar poll last year.
Embracing truly flexible working in your workplace is likely to make it a much more attractive prospect to female employees.
3. Hire people who are different to you
All humans have unconscious biases and these often manifest in the hiring process.
Women are on average 30 percent less likely to be called for a job interview than men with the same characteristics, a study by academics in Spain published this year found.
The study revealed women with children suffer increased discrimination in job recruitment. Mothers were on average 35.9% less likely to be called for a job interview than fathers.
Biases can create a negative feedback loop for diversity. Men tend to be the ones in senior positions, they hire and promote other men similar to themselves, and the cycle continues.
When recruiting new advisers for your firm, increase your reach.
For example, seek out and advertise the roles among female professional networks. Build candidate shortlists with a 50/50 sex split, or consider asking for ‘blind CVs’ – where the names are removed.
Highlighting your firm’s flexible working policies in the advert may also make you more attractive to female candidates.