Diversity and gender equality has become a hugely topical issue, not only within financial services but across all sectors of industry.
With the Equality Act 2010 and the new gender pay gap reporting requirements for companies with 250 or more employees, it is more important than ever for the advice profession to take note of the dramatic changes occurring in what has traditionally been seen as a male-orientated sector.
Recent research carried out by Kantar showed that by 2020, 50 per cent of investment assets will be held by women and 53 per cent of millionaires will be women. Yet 65 per cent of the women surveyed said they had no idea if their retirement plan was on track to meet their retirement goals. This is against a backdrop of some women having to play catch up in the savings race due to lower average wages as well as career breaks to have children.
These are challenges faced by both my female colleagues and our female clients. It is why in 2014 I set up Sanlam’s Women’s Network, which aims to:
- Support the development of women in business with leadership and technical skills
- Highlight the gender imbalance and encourage equality in all areas of business
- Raise the profile and awareness of women in the finance industry
- Provide networking opportunities for women
- Encourage young females in business by sharing best practice and knowledge
A more diverse and inclusive workforce should result in less assumptions or generalisations, and better outcomes for all clients regardless of gender. Research from the Chartered Insurance Institute, as part of its Insuring Women's Futures initiative, shows that women want a better understanding of their finances to gain more confidence in the decisions they make.
Being able to relate to clients is essential in creating a relationship of trust. Part of that equation is giving them the choice of dealing with a male or female adviser or investment professional. If firms managing client money do not become reflective of society’s changing demographic of more financially independent females, they could be at risk of those clients looking elsewhere. For this choice to happen, the advice profession and the wider financial services industry needs to attract more women to see this as a viable route for their career.
Part of this is the difference in financial characteristics of women and men. Women are more likely to have cash savings accounts, Isas and premium bonds, with men saving or investing larger amounts into the stockmarket. Men in their late 30s have 60 per cent more savings than women of the same age. This means that in their 40s women need to save more for their retirement, often with a larger proportion of their earnings needing to be put away due to lower average salaries.
According to the Boston Consulting Group, women will often have smaller pension pots to draw on in retirement, despite having longer life expectancies and higher care costs.
Firms need to embrace and cater for the challenges female clients face. These lower levels of income and savings mean women may be less able to afford to take risks than men – something which may support the slightly mixed perception that women are more risk averse than men. Greater education regarding financial products, investment options and risks may support better outcomes for women, particularly if this is started at a young age.
With so much in the news surrounding the empowerment of women, there are distinct opportunities we as financial professionals have in meeting our female clients’ needs. We must ensure the next generation of women can make informed investment decisions so they can take control of their financial futures.
This will hopefully result in more women seeing a career in advice or finance as one they can relate to and thrive in. It should become the norm to see a female adviser or fund manager leading the way in sound and appropriate investment advice.Illuminate is hosting a conference on 8 March on the value of diversity to your business. Click here to find out more and to register