Your IndustryMar 8 2019

Ignoring diversity requirements risks isolating half the population

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Ignoring diversity requirements risks isolating half the population
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Great strides have been made in light of recognition of the problem and understanding that new developments are needed, but the numbers show that there is more yet to be done. 

Last month, we held the very first Pimfa Wealth of Diversity conference, where numerous members and industry stakeholders came together to identify the personal, social and economic benefits of diverse and inclusive work places, and to share best practice information.

Although women are increasingly accumulating wealth, and creating more now than in previous generations, they are not catered for to the same extent as their male counterparts.

To ignore diversity requirements within organisations risks isolating half of the UK population. 

Pimfa has set targets to help ensure that we and our member firms work together as advocates for equality for women working in the financial advice and wealth management sector.

Meanwhile, the need for women in financial services is greater than ever, as many female clients now want to see not only that ‘they’ are reflected in the people or organisation they work with, but also that the advice they receive comes from someone to whom they can personally relate and who understands their concerns.  

However, without visibility and representation any efforts to attract, connect with and retain women as employees or as potential clients risk being less than fully effective.

As well as being diverse, firms must also be inclusive. Women, as well as men, have to be seen in leadership roles, as role models, and as spokespeople for the industry.

The Pimfa community operates in a specialised field of business which benefits from having skilled and qualified women clearly seen at the interface with clients and running firms and projects from the front.

As in other intellectually and technically demanding sectors, success in the future will depend on attracting new talent, both male and female, from the millennial and 'Z' generations on an inclusive basis, thus securing a pipeline of exciting young professionals to service clients from the next generation.

As a proud signatory of HM Treasury’s Women in Finance Charter since November 2017, Pimfa has set targets to help ensure that we and our member firms work together as advocates for equality for women working in the financial advice and wealth management sector.

In 2015, research from Virgin Money (Empowering Productivity: Harnessing the Talents of Women in Financial Services) and PwC (Female Millennials in Financial Services: Strategies for a New Era of Talent) found that women made up only 14 per cent of executive committee membership and filled just 10 per cent of all leadership roles across finance.

By 2018 not much had changed, and in a speech by Megan Butler of the Financial Conduct Authority, at the Women in Finance Summit in March that year, she highlighted that around only 13 per cent of FCA-approved individuals in trading firms were women. 

Despite these somewhat depressing statistics, 2018 research by McKinsey continued to reinforce the value of diversity and inclusion by showing that firms with greater gender and ethnic diversity on their executive teams are 21 per cent to 33 per cent more likely to outperform on profitability than their counterparts, and that closing the gender gap nationwide could result in a £150bn boost for the UK economy.

These figures have become catalysts to encourage firms across the UK to adapt and diversify. More firms now offer ‘returnship’ programmes to individuals, especially females, returning to work after a career break, including workshops, mentoring and flexible working arrangements. 

Regulatory developments reflect the momentum for change and the FCA has itself created targets to increase the number of women senior leaders on its staff by 2020 and 2025.

Different means will be employed to help reach these, including the use of mentoring and apprenticeship programmes and an expanded recruitment pool. 

FCA chief executive Andrew Bailey has highlighted the benefits that the Senior Managers and Certification Regime (SMCR) can bring to the diversity agenda, stressing that firms can take advantage of the opportunity the new regulation presents for firms not only to review the assignment of conduct responsibility to individuals, but also to examine their culture and approach to diversity and inclusion. 

HM Treasury has also announced it will be keeping a close eye on whether companies are making sufficient progress towards diversity: over 300 financial services firms have signed up to its Women in Finance Charter initiative and it is to be hoped that this number will increase over time. 

Pimfa understands that wealth patterns are shifting and society is changing, and that our industry must change in line, implementing a diverse and inclusive culture agenda in which both women and men can flourish and which becomes a fundamental part of business.

The full degree of change needed will not happen overnight, but the issue is now high on the priority list.

With the help of practical guidance and best practice standards, the use of modern technology, and realistic and measurable flexible working methods, our firms can work positively to bring desirable new approaches into being.

John Barrass is deputy chief executive of Pimfa