With women holding 40% of global wealth, Katrina Shanks, CEO of Financial Advice New Zealand, says more should be done to increase the gender diversity of those working across the financial advice sector.
The recent study published by the University of Otago and RMIT University Melbourne Female Advisers – Where art thou? revisited a persisting issue and opportunity for the financial advice sector.
As much as I struggled with the methodology of the study, and the sensationalist headlines that followed, the discussion of why there are so few female advisers is still important and highly relevant.
At 23.5%, only one in four advisers in New Zealand are female – a figure that, if moving at all, is doing so at an incredibly slow pace.
It’s an issue of increasing attention in many countries; in the UK and US in particular, there is a growing body of commentary and research about female representation in financial advice.
Some commentators point to a perception of advice as a sales-driven culture; some cite the reputation of the industry; others highlight the lack of awareness as to the role of financial advice in helping clients and adding value to their lives in a meaningful way.
But putting the ‘why’ to the side for the moment, there are some pressing reasons for our collective action in addressing the gender gap in the New Zealand financial advice sector.
Women make for great advisers (as do men). Personality traits such as caring, empathy and support are strong drivers of trust and satisfaction for clients* in the modern advice relationship.
These traits – while not exclusive to women – are more commonly female personality traits.
“They are often described to have emotional intelligence (EQ) attributes including ‘understand my needs’, ‘listens to me’, ‘makes me feel comfortable.”*
Soft skills such as listening and traits such as empathy are already in demand by clients – “eight out ten clients find it very/extremely important that their financial adviser makes them feel comfortable and/or is someone they can relate to”* – and it is reasonable to expect that this demand will only continue to grow.
These skills are what should be emphasised and recognised both in the workplace and for consideration when looking at career pathways. With sales volume targets being a thing of the past, these and other attributes should rise to the top and be recognised for what they are – important tools to ensure clients are, and feel, well understood and their needs met.
If we are to truly be accessible to all New Zealanders, it is important that the sectors’ advice workforce reflects society and develops gender, ethnicity and age diversity…
Women’s wealth is on the rise
In 2018, Credit Suisse reported that women hold 40 per cent of global wealth, and commented that: “Getting more education, pursuing a career, combining employment with a family life – these are just some factors that have enabled women to enjoy greater financial independence, earn more, and save more as a result.”**
Research indicates that very few consumers select their adviser based on gender (or age for that matter). But it’s important to consider what this continuing increase in female wealth means for the advice sector, for the expectations of our clients, and what they are looking for in their advice relationship.
If we are to truly be accessible to all New Zealanders, it is important that the sectors’ advice workforce reflects society and develops gender, ethnicity and age diversity to stay relevant to the ever-changing dynamics of our environment.
The challenge to the sector is to change perception through action rather than being passive…
One of the key barriers cited by various research and commentary is confusion as to what the financial advice role actually entails on a day-to-day basis. There is a perception that advice as a transactional, sales-centric role, and lack of understanding that advice is ultimately about helping people.
As quality advisers know all too well, advice today is highly relational. As well as being a highly knowledgeable expert, advice is about building strong relationships and caring about clients and outcomes, which are key drivers of professional satisfaction for female advisers.
In fact, one study found that the leading motivation (by far) for female advisers to stay in the profession is satisfaction from helping clients (91 percent): “Across all age groups, female financial advisers find that the main motivation to stay in their role and the main source of job satisfaction is helping their clients.”*
The challenge to the sector is to change perception through action rather than being passive about this. In reality, this means a strategy to implement career pathways from schools and university that articulate the value a financial adviser delivers to clients and the satisfaction from developing meaningful relationships.
And it means promoting women in leadership and mentoring roles – not in isolation of promoting leadership and mentoring roles for all, but ensuring we achieve balance between genders.
We need to highlight advice as a great career for women by overcoming persisting perceptions…
In my view, the low number of women in financial advice is not reflective of our modern financial advice culture and professional opportunities in New Zealand. But we do have some work to do to attract more women to the sector.
We need to highlight advice as a great career for women by overcoming persisting perceptions, and by better understanding what new female talent are seeking in their workplace and profession of choice.
We’re at 23.5 per cent in 2020. Where could we be in 2025?
* Attitudes Towards Women in Financial Advice 2017 – Australian Financial Services Council and BT Stella.
** Global Wealth Report 2018: Credit Suisse.