Editor’s note: Advisers will profit from greater gender balance
By Justin Cash
The true extent of the gender pay gulf at investment firms is a gaping sore for the profession.
As Money Marketing went to press, firms had just a day remaining to report the relative salaries of their male and female staff under new government rules.
While the results of our analysis of the data so far can’t come as a shock to the market, they are staggering, and only act to reinforce stereotypes of a stuffy, blokeish industry unwilling to change.
Pay gaps at top firms are as high as 46 per cent. For bonuses, it is even worse, with women receiving 80 per cent less than their male counterparts. The significance of the numbers can hardly be understated: this is a huge reputational issue for asset managers and investment firms of all shapes and sizes.
Work should have started to rectify the issues years ago, and it is frustrating that it took government legislation and public shaming to force action, but at least some proactive efforts are being made.
More needs to be done by providers themselves, as opposed to ad hoc industry groups formed by passionate individuals off their own backs. The press, along with the rest of the industry, has a key role to play in holding firms to account when they inevitably miss their deadlines for hitting gender equality targets.
But it is not just fund management behemoths that are losing out from the status quo as it stands. Money Marketing submitted a Freedom of Information Act request to the FCA in 2016, revealing that just one in 10 financial advisers is female. That is not nearly enough.
I applaud the efforts of many regional firms who have carved out a niche in serving female clients. But 50 per cent of the population should not be a niche, and encouraging female advisers to join the profession is vital as financial planning continues to bemoan the lack of new blood coming through.
There is evidence to suggest investment teams with higher female representation deliver better returns. There is also evidence to suggest increasingly wealthy female clients feel more comfortable receiving holistic advice from a female financial planner.
There is a sense they can empathise with the unique implications of career breaks, caring for children, marriage and divorce. Women are less confident about investing than men, more turned-off by jargon and are less likely to want to take investment risk.
While it is not essential to be female to understand these factors, having more women planners could be a great stride forward with a client base that is growing in importance.
If the stats keep rolling in like those filed so far, it will discourage not only female clients from dealing with a macho financial services industry but also the next generation of women advisers ideally placed to profit from them.