The government’s mandatory gender pay gap reporting may reveal “a significant gender pay gap for advisers”, according to Rowley Turton’s Scott Gallacher.
The Gender Pay Gap reporting regime will require companies with 250 employees or more to publish comparative information on male and female remuneration from April this year.
The figures will have to be calculated using both the mean and the median, and firms will also be required to report on the number of men and women working across salary quartiles.
Eligible companies will need to take a ‘snapshot’ of their employees’ pay on 5 April 2017, with employers required to analyse and publish the information any time within 12 months of the snapshot date and by April 2018.
Paul McGrath, partner at McDermott Will & Emery, said he did not think the figures, once they are published, would necessarily demonstrate a significant gender pay gap among adviser and financial services firms.
But he suggested: “The most revealing data in the financial services sector may well be the quartile split.
"Affected employers may wish to consider providing a narrative or providing additional information which might explain any apparent pay gap or glass ceiling, particularly those who have already taken positive steps seeking to address any historic imbalance.”
But Mr Gallacher said: “Whilst there should be no gender pay gap for administration and para-planning roles, as there is clearly no justification for this, I suspect that there may be a significant gender pay gap for advisers. The main reason for this would be as advisers’ earnings are still largely dependent on the client bank that they have.
“Acquiring a good client bank can take many years, and if advisers have to take a career break, for example to bring up families, this would mean a double impact as they are likely to ‘lose’ clients during that period as well as missing out acquiring new clients.
“As women tend to take the lead in terms of taking time out of the workplace for their families, I would suspect that this impact would be shown in a gender pay gap.”
He warned any evidence of a pay gap in favour of male employees may make it harder to attract more women into the financial advice profession, “which is a shame as I feel that our profession should be very attractive to anyone having to juggle family and career due to allowing very flexible working hours”.
Mr McGrath added: “I would expect the increased public focus on gender pay to have a positive impact on recruiting more women into the financial services and financial advisory industry, particularly if any issues identified are addressed.”
In the government response paper, it stated: “We will require employers to separately analyse all bonus payments made in a 12-month period and publish the difference between women and men. This will encourage employers to scrutinise their remuneration and reward policies and ensure that their practices for bonuses are just as fair and transparent.”
The regulations commenced in October 2016, giving companies six months to prepare for the preliminary data snapshot in April, with employers required to publish the data annually from then on.
Claire Walsh, chartered financial planner at Aspect 8, added: “I think it is a good thing to do. My personal prediction is that in financial services there will be more parity than other industries. I think one of the problems is there are so few women in the industry.”
A paper published by indexing firm MSCI on 17 February found more than half of the financial companies in their study had a greater proportion of women in their overall workforce than the proportion of female talent in their market but that nearly all of those companies had fewer women in senior positions.
The information must also be uploaded to a government website.
eleanor.duncan@ft.com
