Unlocking the power of financial advice
Expert: Vincent Tiseo, Managing Director, Business Strategy, Strategic Advisory Solutions
Facilitator: Kate Rainbow, Senior Sales Manager, FundsNetwork
The State of Play
- There is no doubt that the female market could add significant revenue and assets to the financial services industry. Recent surveys indicated that if providers were able to engage more meaningfully with women this could add a further £12.4 billion from millennial women and £24.4 billion from generation X women. In addition, the centre of Economics and Business research found that 53% of generation X women will be millionaires by 2025 (Opinion Research February 2020). Given these statistics you would have thought that the financial services industry was looking at ways of engaging better with this market. However, this does not appear to be the case in certain sectors of the market and possibly for good reasons.
- The financial advisory market has been working under the assumption that in order to engage better with the female market it needs more female advisers. Research has proved that this is actually not the case with 81% of women saying they had no preference when it came to the gender of their own adviser. In addition, many IFAs have fed back to state that their client base contains a very healthy proportion of female clients and when it comes to providing advice for couples they engage with both partners in the relationship. This makes sound commercial sense and provides a deeper working relationship with the client. It is therefore obvious to see that there is a degree of apathy within the advisory market when it comes to running specific projects looking at engaging with women better as the view is that the statistics do not prove they need to do anything different as they stand today.
- During this session statistics were shown that indicated women were as engaged as their male counterparts when it came to searching for current accounts and or switching current accounts and when looking for mortgages and protection. However, there was a massive disparity between genders when it came to matters that involved investments and pensions. It seems at this stage women struggle to engage with the financial services industry in the same way men do. This has to be of concern for both the industry and society as a whole as this leads to poorer financial outcomes for many women.
- The debate then moved on to the question of how to attract more female financial advisers into the industry as this was seen as an important step as the majority of people in the room agreed that the female financial advisers they knew were of exceptionally high quality. Some of the feedback was that female advisers work better in a collaborative way rather than some traditional male advisers who are seen as hunter gatherers.
- Certain firms were already able to demonstrate that their advisor Salesforce had an equal 50/50 split between genders but other firms felt they needed to do more. It was also mentioned that experience with female advisors indicated that they suffered from a lack of confidence. It was also stated that this lack of confidence was unfounded because in the majority of cases the female advisor was of far high quality and her very confident male counterparts. This lack of confidence or perceived lack of confidence is an issue that impacts both on the ability to attract women into advisory roles and the ability and desire of women to seek financial advice.
- Given that the makeup of the financial advisory sector is predominantly smaller businesses it cannot be expected for them to be able to have a significant impact in how women, as a whole, engage with this industry. The issue itself is far greater one and needs to start being addressed at school age and both men and women being educated on financial matters better than they are today. However, a consensus was reached that in many cases the language the industry uses needs to change in order to engage with women better but this has to be genuine and cannot be seen to being done just for commercial reasons. The culture has to be a genuine one to reflect the businesses desire to encourage women to engage with them and to work with them because the business believes this leads to better outcomes all round and not just commercial ones.
- All firms are hugely supportive of any initiative that would allow more women to enter the advisory aspect of their businesses. They are looking at ways of trying to encourage more women to move out of some of the back-office functions and move into the adviser community and try to provide the type of environment that would encourage this.
- With the impact of Covid this might actually help in creating new environments which could be more attractive to women by the means of them being able to work for more from home or have a more flexible working environment.
- Whilst the IFA community in itself will not be able to resolve some of the root issues to this problem nevertheless there are signs that firms are trying different approaches to make significant improvements. From providing education in the workplace to mentoring new female advisors IFAs are trying different ways of attracting and retaining quality female advisers.
- One of the over-arching views that is common across this topic is that the language used by the financial services industry has to change in order to better engage with women both as clients and employees. The language is viewed as difficult to understand and has the impact of making individuals feel inferior for not knowing what it means. Any barriers such as this seem to have a far greater impact on women as research has shown. Better language, better explanation and education around financial topic and better methods of communication that really have an impact on women are essential going forward. See the world through a woman’s eyes as well as making the effort to step credibly into their world.
- Going forward the more that IFA firms can share the results of initiatives they have tried, whether successful or not, will help accelerate a move in the right direction.