There has been much criticism of the financial services industry in recent weeks because of the terrible gender pay gap record by banks and investment firms. And while the construction industry tops the table for having the widest gender pay gap, finance and insurance is second.
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.
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.