Close the gender pay gap already

If you are a financial adviser you may consider the gender pay gap irrelevant. But it should be especially relevant to you for two reasons. First, is the fact that half your clients are likely to be women. If you are interested in their financial wellbeing – and you should be – then you will want them to be fairly paid.

Second, is the fact than any companies you encourage your clients to invest in through shares, funds or pensions should have progressive employee policies.

Staff are likely to be their biggest asset and therefore must be treated decently. Companies that are not tackling wide gender pay gaps are not progressive. Frankly if they have not woken up to the problem, they may not have a positive future as many of the best employees will find work elsewhere.

Now let me remind you of some of the gender pay gaps among Britain’s biggest financial firms.

Staff are likely to be their biggest asset and therefore must be treated decently

Britain’s largest financial adviser firm St James’s Place has a 47.2 per cent gender pay gap, while at Brewin Dolphin it is 40.7 per cent. Barclays Group has the worst record for banks with a 43.5 per cent gap, closely followed by Lloyds on 42.7 per cent. Among asset managers, Rathbone has the biggest gender pay gap of 47 per cent, followed by Investec on 43.4 per cent.

Do you find these figures shocking? Let’s be clear, this is not about equal pay. It is illegal to pay women less for doing the same job. It is about corporate cultures. Companies with high gender pay gaps have got it badly wrong, and I will tell you why.

First, however, let’s answer those critics of the gender pay gap who dismiss it as a myth. There is a fairly widely-held view, only by men as far as I can tell, that the gender pay gap simply reflects the realities of life. Their theory goes that these figures simply reflect the fact that men hold most of the highest-paying jobs and women tend to have lower-paid jobs because they want more career flexibility to bring up children.

There are two truths in that theory. First, men do hold most of the highest-paying jobs, particularly in financial services. Second, women do tend to need more career flexibility. But neither of those two facts gives the theory credibility. That is because neither are facts that do us much credit. The fact that men hold most of the high-paying jobs is a terrible reflection on Britain’s companies. It suggests their recruitment and retention policies are inadequate if they only appoint or promote men to senior positions.

It should be self-evident that someone’s gender is irrelevant to their ability to do any job. But the evidence suggests that in the financial services industry the feeling is that if it is an important job you need a chap to do it.

In its gender pay gap report, advisory group NM Rothschild – which had a staggering gap of 54.3 per cent – said: “The number of women applying to work in financial services is small”. If that is true then that is a massive problem for the industry. 

Without a fair proportion of women in senior roles, how can firms possibly provide the right products and services to meet the needs of what represent 50 per cent of their potential customer base?

The sad truth is that a wide number of women are put off the financial services industry by their experience of misogyny and a perceived old boys network that prevails.

The President Club scandal that broke earlier this year is only the tip of the iceberg of inappropriate behaviour. But aside from that locker-room mentality, all financial service companies need to wake up to the fact that without women in senior roles, they face being marginalised by more progressive competitors.

Andrea Rossi, chief executive of Axa Investment Managers, admitted recently: “We know that attracting more women into our workforce and supporting their progress into senior roles is vitally important; not only because it is the right thing to do but also because it’s essential to the commercial success of our business.”

That is the crucial point. And it brings us right back to the essential role that financial advisers must play. For starters, be wise to the fact that companies with wide gender pay gaps may not be the best to invest in.

But second, bear in mind that helping clients sort out their finances does not just mean finding a decent pension scheme or range of funds, but also helping them with their career goals.

Frankly, companies with a much lower gender pay gap are likely to be better employers – and that is worth bearing in mind when advising people on their future plans if you really want to do the best for clients.

Simon Read is a freelance journalist