The industry has failed to become properly diverse, by gender, ethnicity, and age, and is still failing to properly appeal to women, ethnic minorities and younger people
- Diversity is still a huge issue in the industry.
- The industry is failing to appeal to young people.
- There will be continuing divergence, between the larger ‘vanilla’ products, and the higher margin, specialist products.
Two themes dominated in this discussion: diversity in the industry, and how the industry appeals to younger people.
It was acknowledged that women are still unrepresented throughout the recruitment pipeline, despite evidence the presence of women can make companies safer and more successful. Businesses’ makeup should reflect 2019, regardless of sector or client base. It was mentioned that it is “tragic” we’re still talking about gender and ethnic diversity in 2019. On the subject redressing this, it was noted that employment targets, rather than quotas, can be an effective tool.
The discussion then moved onto the need to educate younger people about the industry and what it does. The industry cannot afford to alienate them, with it being mentioned that unlike in the past, investment advisers no longer ‘inherit’ their clients’ children. It was agreed that millennials and Gen Z are savvy, and advisers and asset managers are not appealing to them. Instead, app-based challenger banks are picking them up. Advisers therefore need to adapt to appeal to young people. While the apps and tech platforms are appealing now, it was suggested they will need a face to face proposition at some point.
On the future of the industry, it was mentioned that there will be a divergence. The big, large cap trackers will be ‘supermarketed’. Higher value, specialty services will be kept separate. For example, there is a drive toward private equity, as it is more profitable.
On the role of the adviser, it was suggested that IFAs should avoid largely talking about investment as people want more holistic advice, such as pension planning, etc. Around regulation, there was a view that IFAs can’t be regulated as there are too many of them. This has resulted in the FCA focusing regulation on product providers.
- The industry urgently needs to do more to become more inclusive and more appealing to women and young people.
- The future of the adviser business model is in question, partly because so few young people now choose it as a career.