A recent study by Investec Wealth & Investment found that more women are seeking financial advice due to the increase in the number of female entrepreneurs and rising rates of divorce. The statistics also showed a rising percentage of female clients with women accounting for 40% of IFA clients in 2012 and almost half (47%) of new clients over the past two years (of the 101 IFAs surveyed in June 2017).
But why are these figures changing? The most important reason for female clients seeking financial advice was a divorce (51%) and the death of their spouse (35%). Other drivers cited by IFAs included women taking more control of their financial circumstances (26%) and a fifth (19%) mentioned the growth of women succeeding in business.
Despite the increasing number of female clients, half of IFA firms have no female advisers. It was estimated, that on average only 10% of advisers are female and just 5% of firms said, “they were looking to attract a greater number of female staff.”
Fortunately, I work for a business where the ratio of male to female advisers is 2:1 and they encourage all staff equally in their professional development.
In contrast, I have come across many firms who are exclusively female and although they do not have an all-female client base, that is their target market. This is an interesting proposition and I foresee further growth of these firms in the future to serve this growing number of female clients.
Industry bodies recognise the challenge of the lack of female advisers, but a lot still needs to be done to boost the number of female advisers and some firms risk getting left behind. I don’t feel that the industry is purposefully biased, but a reboot is needed. I only discovered Financial Planning as a career option in my final year of university, which has lead me to believe that perhaps an awareness of Financial Planning as a career is needed more widely. While there some excellent and well known Financial Planners who are women, overall their numbers remain relatively small, this means a lack of good role models for other females entering the profession which I felt was a real challenge.
The Women in Financial Services Charter, launched in February 2016, is an example of how the industry recognises the importance of encouraging financial services as a career for women. The Citywealth Power Women Awards are in their sixth year and aim “to champion women in the wealth sector and highlight the female leaders of today and tomorrow.” These awards highlight those firms that recognise gender diversity programmes and initiatives are important.
Keith Richards, CEO of the PFS, wrote in his September 2016 blog that “the Personal Finance Society is committed to gender parity, and believes the advice profession has an important role to play in promoting diversity and equality across peers, employees and clients of the sector.”
Many in the industry are calling for new blood and perhaps the encouragement of school leavers and graduates into a career in Financial Planning can address this and help to re-balance the ratio of men and women in the industry. Earlier this year the Personal
Finance Society (PFS) launched Aspire, their new financial adviser development programme. Within five weeks of the launch, more than 300 member firms registered their interest in March and 88 aspiring financial advisers prepared to commence the programme.
As a result, Keith Richards highlighted the need and demand for new talent and succession planning.
I joined the industry just before RDR was implemented, when many advisers were leaving the profession. I am increasingly hearing that over the coming years there will be more advisers looking to retire, leaving clients who still require continuing Financial Planning advice. The retirement of many Financial Planners over the next few years is a great opportunity to re-balance the lack of women in Financial Planning and get more women into a profession that has traditionally been middle-aged and male.
Chloe Moran, BSc (Hons), DipPFS is a Financial Planner at Connor Broadley Wealth Management in London. She joined the company recently as a Financial Planner having previously worked at Tilney Group. She holds the level 4 Diploma in Regulated Financial Planning and is sitting her final Chartered exam later this month. She intends to become a Fellow of the PFS next year.