Does financial advice need more women advisers?
Would financial advice be a different place if there were a higher ratio of women advisers in the market? Fiona Bond sought opinions
Much has been of the gender gap in financial services, with women continuing to be a minority in a male-dominated industry.
In an effort to address the issue, HM Treasury recently announced a pledge to increase gender balance across financial services. The unveiling of its Women in Finance Charter was designed to “reflect the government’s aspiration to see gender balance at all levels,” explaining that a balanced workforce would not only be good for business, but for customers, profitability and workplace culture.
The Charter comes as it’s revealed that the number of female financial advisers remains staggeringly low compared to male advisers. Data released by the FCA found that just one in 10 advisers is female.
Nicola Watts, director of Jane Smith Financial Planning, believes the imbalance stems from the profession traditionally appealing more to men.
“Traditionally, financial advice has been seen as a very sales-driven environment which appeared to appeal more to men. The industry also requires a lot of commitment in terms of building qualifications and women have often had more to juggle in terms of work and family. However, we have seen a number of clients, both male and female, who have a preference for a female adviser and I would love to see more women come into the industry,” she says.
While Watts says around 90% of the firm’s client base has come through recommendations, the other 10% has approached the firm because of their desire to be looked after by a female adviser.
So what is it about a female adviser that appeals?
Those clients specifically seeking a female adviser may do so in the belief their approach is tamer than that of a male adviser.
Claire Walsh, chartered financial planner at Aspect8 (pictured), says a lot of the softer skills required for financial advice are very female traits, such as listening, empathising and explaining. She is not alone in her view.
Managing director of the International Monetary Fund Christine Lagarde once famously remarked that had Lehman Brothers been “Lehman Sisters”, the economic crisis would have looked quite different.
Indeed, studies into the different approaches taken by men and women have shown that women are less likely to take excessive risks. It is a view shared by Addidi founder and managing director Anna Sofat.
Sofat explains: “Women are less transactional than men and have a more nurturing and comforting nature. Generally speaking, I believe women really need to buy into a product themselves before they would feel comfortable recommending it a client. If we had more senior women in our industry, I do think there would have been much less mis-selling.”
Sofat would like to see the industry create a more balanced mix of males and females, believing it would benefit both firms and clients alike.
She says: “There are those clients who actively seek out a female adviser because they want to feel ‘looked after’ and then there are those who will feel more comfortable working with a man and may prefer a more bullish approach.
“In order to strike that balance, there needs to be a cultural shift within firms so that we see more women in senior positions.”
Need to be proactive
Financial planning and investment management firm Gale and Phillipson believes the move to gender equality within the financial services industry will be a slow process and the industry needs to be more proactive.
The firm, which has a 30% female adviser count, is calling upon the Chartered Insurers Institute and the Institute of Financial Planners to do more to make the financial planner role more appealing to young women in education as they start to plan for their future career.
Investment manager Isabel Howdle (pictured) says: “One of the biggest barriers to attracting new talent to the finance industry now is the way the sector itself is perceived. Despite the requirement for a professional qualification, the industry lacks the credibility of becoming a doctor, an accountant or a lawyer.
“The gender gap doesn’t just exist at the top, I have recruited for several entry level roles and have been struck by how few female candidates have applied.
“Until more young women view economics and finance degrees as a viable option, we are likely to continue seeing an unbalanced intake and perpetuate the idea that the industry belongs to men.”
Gemma Williams, director of financial planning at Uniq Family Wealth, says that despite seeing a change in dynamics over the past 10 years the balance still has some way to go. Her experience has taught her that there are clients who have a natural preference to be advised by a woman, particularly those who are in the throes of or following a divorce.
She says: “Remembering my first local seminar in 2006, I turned up with my folder and note pad ready to learn all about our profession but in a room full of men I was the only female and a young one at that. I appreciated the profession wasn’t quite ready for a female invasion, but I think it is now! Nowadays, when I attend conferences there is a clear increase in female participation both from the advisory and non-advisory community.
“By increasing the pool of female advisers the client’s eventual choice of adviser can then be based on other factors such as experience, qualifications or personality.”
Cardiff-based Uniq Family Wealth has a mix of male and female advisers, which Williams says creates an interesting dynamic.
“Overall, diversity should be promoted as much as possible, not through forced politics but by encouraging women to reach their full potential through opportunity and support. However, my feeling is that we still have a long way to go,” she says.
Encouraging diversity is an approach echoed by Newcastle-based firm Lowes Financial Management. The firm, which has recruited two female advisers in the past 12 months, has always adopted an inclusive approach.
Managing director Ian Lowes says: “Ultimately, I’m interested in having good quality people work for us and gender doesn’t play a role in that decision. However, I do think this business is made all the better for having female advisers.”
Lowes recognises that there are clients who prefer to deal with a female adviser, often as a result of having preconceived ideas of male advisers.
“I think women bring different qualities to the role and as a society, we need to accept that men and women can have different approaches and qualities which bring a good balance to a business. I think firms benefit greatly from having diversity and as such, it would be fantastic if the industry had more of an equal balance of male and female advisers,” he says.
Looking to the future, Lowes believes the natural evolution of society and push for gender equality will inevitably lead to a rise in the number of female advisers entering the industry.
“This sector, like many other industries, has been evolving over the years. Previously, it was dominated by males but today’s society is much more focused on placing men and women on an even keel so I think we can fully expect more women to enter the industry,” Lowes adds.
Visit the UNIQ Family Wealth website
Visit the Addidi Wealth website
Visit the Gale & Phillipson website
Visit the Jane Smith Financial Planning website
Visit the Aspect8 website
Visit the Lowes Financial Management website
Fiona Bond is a freelance journalist and media consultant