Financial advice is still a man's world
... but change is coming, says Sam Dunn, as demand grows for women to enter an industry in sore need of a shake-up
Sunday 27 February 2005
The minister for women, Jacqui Smith, was banging the drum last week. British women were excelling in business, she crowed, and entrepreneurship was on the up: in fact, start-up businesses were "rocketing".
Ms Smith's speech may have been greeted with applause in some industries (and in Whitehall), but across the financial-advice sector, a stony silence would have been more appropriate. Less than 5 per cent of the UK's independent financial advisers (IFAs) are female - barely 1,500 at a rough estimate - a figure that has refused to budge in the past couple of years.
This imbalance is thrown into sharp relief by new figures that suggest more people now want to sort out their finances with a female IFA.
Around 1,700 online requests for contact with a woman adviser were made to the IFA marketing body IFA Promotions in January - a rising number. And in a survey from Clerical Medical, one in five people who had recently visited an IFA said they had opted for a female adviser.
Older, married men now prefer female advisers for planning, says Gill Cardy of IFA Professional Partnerships.
"They feel more comfortable at the thought of their wife dealing with a woman adviser once they've passed away," Ms Cardy says.
The shortage of female advisers is of particular concern as the industry is trying to shift away from a hard-bitten, macho, sales-driven culture to one requiring skills that often come more naturally to women. These include developing long-term client relationships, having empathy with people's money problems, and counselling them to help overcome these.
"The industry is all about interpersonal skills, and this is what women have [culturally and socially] been good at," says Ms Cardy.
The problem is partly due to a lack of effort to recruit female advisers in the past.
There hasn't been a single major push to entice more women into the industry, concedes Fiona Price, head of the Women's IFA Group (WIG), set up to raise the profile of those who have already qualified as advisers. She says this is in part down to the fragmented nature of the industry, with thousands of IFAs spread out across the country, and its struggle to adapt in response to recent government and regulatory changes.
Another major issue has been an ageing professional population - the average is 48 but falling - and, particularly in the past, the boorish IFA culture.
"The financial community has been so off-putting for women, both as practitioners and clients - it's full of jargon, and the 'hard-sell'," Ms Price adds.
This perception of the industry and of those who staff it has not been helped by a series of mis-selling scandals such as endowments, split cap investment trusts and high-income "precipice" bonds.
Opening up our personal finances to advisers in the wake of the industry's chequered history is not easy. In any case, talking freely about money matters is something many of us still find difficult. Middle-aged male advisers with a tendency to talk down to clients are hardly helping to change this situation.
More than one in 10 of us feel we don't know enough about finance to be comfortable visiting an IFA, while 6 per cent admit to feeling at least intimidated, the Clerical Medical researchers found.
The male dominance of the financial advice industry is in danger of alienating women in particular, Ms Cardy adds.
"[When couples visit], the male adviser will often treat the woman as if they are not part of the conversation. "This is crazy since, statistically, their husbands are going to die before they do - and, having been poorly treated, a widow will go elsewhere for advice after all the assets have passed to her."
Yet growing numbers of women - both young and old - are seeking advice as they earn, save and plan for their own financial future. More women than ever before are choosing to pursue a career and stay single, and the rise in divorce rates has not let up.
With such a clear demand for women financial advisers, it is good to find signs that change could be on the way.
A co-ordinated drive to recruit women remains one of WIG's "longer-term aims", Ms Price says. "It's a shame that more women aren't aware of the career because it's intellectually challenging, you can make a difference to people's lives, and the money can be good."
Faye Goddard, director of the Association of IFAs, says the flexibility of the work, which can often be done from home, will also broaden its appeal. "While the industry's average age may be 48, that of women [in financial services] is much lower - and we are expecting more women to come through."
The age factor could work in their favour as many older male IFAs will be retiring in the next few years. Their companies are likely to recruit internally for their replacements.
Ms Price adds: "Once this economic driver kicks in, firms will look at their own staff, where most of the administrative roles are filled by women,"
A greater choice of financial degree courses at university should also broaden the appeal of the industry for both sexes.
Ms Price has hopes, too, for a change in culture. "[There's still an attitude that] money is not a woman's subject, that whatever her career or interest in personal finance, she'll be taken care of. Of course, this has changed with younger generations but it's still deep rooted. It makes a lot of women less confident around the industry generally."
This lack of confidence is reflected in "execution-only" business calls, where clients do not require financial advice. At IFA Hargreaves Lansdown, 95 per cent of orders come from men on behalf of themselves or their wives.
The lack of financial education in schools also remains a sticking point. While personal finance stays on the periphery of the national curriculum, it will be difficult to get youngsters of either sex interested in how money works.
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