Are firms addressing the lack of women in financial advice?

There are many reasons a larger number of financial advisers have historically been men. For instance, it may hark back to a time when a household’s financial affairs was a male domain, so the man of the house would probably seek advice from a male financial adviser.

The financial services industry more generally has traditionally struggled to appeal to women who believe it is better known for its ‘old boys’ network than for being the type of environment which encourages men and women to work alongside one another.

Of course, companies have begun making improvements to ensure there is no longer a dearth of women in financial services, with more pressure to recruit women at boardroom level and an emphasis on providing childcare to help women get back into work after, or while, they are raising a family.

Attractive career

Fiona Treadwell, talent and development business partner at Mattioli Woods, says: “For us there has never been any polarisation but we acknowledge that traditionally financial advice has been seen as a male-dominated environment.

“We regularly run careers open events. At some the populous is predominantly male, other events female, so I believe the interest in financial services as an early career choice is there for both sexes.

"I think the practicalities around the need to be out on the road seeing clients and the potential to generate income this way doesn’t always fit well with those juggling family commitments.”

FAS is committed to encouraging more women into the advice field. At the moment 29 per cent of our students are women and we are looking to raise that percentage.Darren Smith

Darren Smith, head of Old Mutual Wealth’s Financial Adviser School (FAS), told FTAdviser at its graduation ceremony in April how attracting more women and introducing financial services to them as a career option was a key focus for him.

He adds: “FAS is committed to encouraging more women into the advice field. At the moment 29 per cent of our students are women and we are looking to raise that percentage.”

Eleanor Armson was among the eight who graduated from FAS on 3 April and one of two female graduates.

“I think it’s a great industry for women and it’s a great opportunity to get into finance as well,” she explains. “It’s one of those industries really suited to women, because it plays to their strengths.”

Marie Calvin, at Standard Life’s advice arm 1825, suggests people are attracted to their traineeship programme regardless of gender.

“Currently I have 15 people on the traineeship program, six of them are women. One of the things just to point out is we never set about creating specific rules for women, these were the top 15 candidates out of 330 applicants,” she says. 

“I think it’s a great thing to have that split and it shows the gender diversity I suppose, in terms of at that younger level it’s quite different from the normal financial services industry. I guess that can only be a positive thing.”

Perhaps if there were more female financial advisers, it may help encourage women to become more confident about investing.

According to research by IP Global carried out globally among 6,007 women over 18, younger women are more likely to invest in stocks and shares than older women are, although overall women are less likely than men to invest.

Creating more of an even split between the numbers of male and female financial advisers may help boost the take-up of their services among greater numbers of people of all ages and genders.

Gender pay gap crackdown

The mandatory gender pay gap reporting which came into force in April this year, is being hailed as the next step towards closing any pay disparity in larger companies.

Paul McGrath, partner at law firm McDermott Will & Emery, explains which firms the reporting applies to and what they will need to do to comply.

“It will require private sector employers with 250 or more relevant employees as of 5 April each year to report comparative information on male and female remuneration as at that annual snapshot date,” he says.

He notes affected organisations will have 12 months to publish the following key information on their website:

• Overall gender pay gap figures based on mean and median hourly rates of pay for male and female employees.
• The proportion of men and women in each quartile across the employer’s overall pay range.
• The proportion of male and female employees who received a bonus in the previous 12 months.
• Overall gender bonus gap figures based on mean and median bonus amounts paid to male and female employees over the previous 12 months.

The information will also need to be uploaded to a government website.

Asset management giant Schroders voluntarily disclosed information on its gender pay gap in its 2016 annual report and accounts.

A Schroders spokesperson says “We are committed to striving for gender equality across our business. Our decision to publish this data in the 2016 annual report and accounts is a tangible demonstration of this commitment. 

“In 2016 we introduced an initial target of at least 30 per cent female representation in senior management roles. Under the leadership of [chief executive] Peter Harrison we have made good progress and have increased female representation in senior management roles from 25 per cent to 29 per cent. As a result we have increased our target again to at least 33 per cent by 2019.”

“I think what will be just as important as the raw data people push out is the explanatory statement that goes along with it.Catrina Smith

While this is not representative of either the financial adviser community or the rest of the asset management industry, it does act as a good example of how a firm can respond to its findings.

Catrina Smith, partner in the employment team at law firm Norton Rose Fulbright suggests: “I think what will be just as important as the raw data people push out is the explanatory statement that goes along with it. Because it’s in there that people can say, actually we pay equally but we recognise there is a pay gap.”

She adds: “It’s what you do with the numbers when you’ve got them that I think will be the differentiating factors between whether you are a good and progressive employer who is likely to attract the best people or whether you just go, ‘never mind’ and move on.”

She points to a good example of a statement on the gender pay gap from utility company SSE.

“It’s quite interesting because in their statement they talk about some quite interesting initiatives they’ve taken in order to boost representation of women among higher-paid professionals in their organisation,” Ms Smith says.

Industry past and present

Is it fair to assume some of the larger financial advice firms which will have to report these figures will find there is a gender pay gap?

The FAS's Mr Smith comments: “Many of the firms I’ve spoken to affirm they pay men and women the same wage. However, the nature of advice means income is based on their client base, which tends to grow the longer they are in the industry.

“Traditionally, there have been a small proportion of women in the industry and while that statistic is growing the pay gap is likely to reflect the advice industry’s past.

“If any financial advice firms do have a disparity between how much they pay men and women that should be addressed as they should absolutely have an equal basic wage.”

Any pay gap may make attracting more women into financial advice difficult, 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.Scott Gallacher

Scott Gallacher, chartered financial planner at Rowley Turton, paints a similar picture when asked why there might be a gender pay gap in financial advice.

“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. Those advisers are therefore likely to be behind their peers in terms of clients and earnings,” he reasons.

“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.”

But he adds: “Any pay gap may make attracting more women into financial advice difficult, 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.”

Admin burden

Could it be the case the mandatory gender pay gap reporting forces smaller firms to ask their own questions about the split between the genders and publish some data of their own?

Mr McGrath thinks that is unlikely, adding “but it is certainly something any smaller company with a particularly positive story to tell should consider”.

But Ms Smith suggests it may not be as easy for smaller businesses to publish similar data. “It is quite an administrative burden to crunch this information and to look at it, think about it and analyse it,” she points out.

“Hopefully it will turn out to be, in the long-term, a benefit for the organisations that do it because it will hopefully help them improve their attractiveness to the widest possible group of people and therefore increase their ability to attract the best candidates, so it might be something candidates might ask some of the smaller firms.”

eleanor.duncan@ft.com