The Financial Conduct Authority (FCA) has warned financial services firms that little progress has been made for gender diversity.
In a sample of 94 major institutions, the UK regulator found that gender imbalance was very similar to the one present in 2005.
“Diversity has remained consistently low at industry level (approximately 17%), notwithstanding some variation by role seniority, firm size and sector,” the FCA said.
In the last 14 years, however, female senior managers have grown relatively rapidly by 9%, although from a low base.
The watchdog also found significant disparities across individual firms, with female representation in senior management ranging from 3% to 40%.
Larger investment management companies seem to be doing better as they have more gender diverse senior managers compared to institutional brokerages which are lagging behind.
FCA has its own responsibility
Chief executive and founder of industry network City Hive, Bev Shah told International Adviser that the push for gender diversity cannot only come from the industry, but from the regulator as well.
“This report doesn’t tell us anything we don’t already know.
“When the FCA’s own handbook refers to customers as ‘he’ it is no surprise we are not seeing much progress in gender diversity whether it is representation in our industry or customer base.
“Despite everyone acknowledging that gender diversity is important, numbers really haven’t changed. What we need now is action – meaning companies allocating resources to the issue along the pipeline.
“We think the industry and the FCA should commit to our target of a 50:50 split of men and women registered on the FCA register.
“Currently, the number of women registered to be responsible for key investment decision making is woefully low. That is what the FCA should focus on as the industry regulator.”
Long-term challenge
Jane Goodland, corporate affairs director at Quilter, told IA: “Despite a lot more scrutiny levelled at the industry for its poor diversity in recent years, the sector still needs to do more to address the persistent lack of gender diversity in certain pockets to better reflect the society it is there to serve.
“The industry as whole needs to accelerate progress to get more women into senior management positions and as important more women into revenue-generating and frontline investment management roles.
“Not only will this help to reduce the gender pay gap it will also produce positive role models for the next generation of both men and women who will see a diverse meritocracy.
“Whilst we’re moving in the right direction, we know this is a long-term challenge, with more to do to achieve gender equality at all levels, reflecting our overall gender split which is not far off 50/50 male and female.
“But it’s important to recognise this isn’t unique to the investment world; there’s currently only 6 female CEOs in the FTSE100 and only 8 in the whole of the FTSE250.
“All sectors need to raise their game and investors have a role to drive change.”
Think of the opportunities
Gender diversity cannot be just an industry exercise, because it has repercussions both on the individual firm’s business and clients.
“In common with many professions, the financial services sector is addressing its historical legacy when it comes to gender diversity and it is reassuring there is a will amongst leaders to change this,” Keith Richards, chief executive of the Personal Finance Society (PFS), told IA.
“Not just because it is the right thing to do but because it is evident diversity and inclusion can create business opportunities and improve results.
“The women in finance charter has been one initiative which is playing a key role in driving change and increasing focus, but the pace of change will logically be different from firm to firm.
At the [Chartered Insurance Institute (CII)] and PFS we will continue to share good practice across our membership and as well as providing guidance to the smaller entrepreneurial businesses.”
Positive change needed
Similarly, Tamara Gillan, co-founder of the WealthiHer network, told IA the sector has a duty to represent the society it serves.
“As women become an increasingly wealthy clientele for the financial services, there’s a lot to be said for growing their representation at a senior level within the industry.
“Our report found that over a third of women who have dealt with the industry found their experience patronising and close to a third said it is overly reliant on jargon.
“We have been heartened by our founding partners who are working collaboratively to make positive change.”
