The financial services sector must undergo a cultural shift to attract more female talent and female investors, says the Financial Conduct Authority.
In a speech to PIMFA’s Women’s Symposium, Sheree Howard, executive director, risk and compliance oversight at the FCA, said the financial advice industry still needed a “different and better mix of advisers and advice” to ensure that women were receiving the help they needed.
The rate of women appointed to wealth management and financial advice boardrooms is continuing to fall and has dropped 28 percentage points in the last year. In the previous year a third of all board appointments were female directors, down from 61% a year earlier, Howard said.
There has also been a decline in the share of women employed in the industry overall, from 51% to 43%, despite the sector continuing to expand.
Howard called for financial services firms to pivot towards “attracting women into more rewarding mid-level and senior roles,” adding that creating the right culture was key to ensuring that more women were attracted to the industry at the start of their career, and promoted on merit and hard work.
According to Howard, one of the main deterrents to women entering financial services were the large instances of non-financial misconduct, which often took the form of sexual harassment. Nearly three quarters (74%) of people were supportive of recent FCA proposals to tackle non-financial misconduct and Howard said firms must deal with individuals that do not meet their professional standards and risk their firm’s reputation, as well as clients’ money and colleagues’ wellbeing.
Howard said: “It is worth reminding ourselves collectively that nothing in an NDA can prevent an individual from reporting an incident to the FCA. And I mean nothing. Treating colleagues well, protecting against group think and delivering for a diverse range of customers should not be controversial or antagonistic. It’s the right thing to do.”
Liz Field, chief executive of PIMFA, said while the industry has seen “tremendous progress” in providing women with more opportunities to fulfil their potential, there was still more to be done.
“While this progress is undeniable, it’s clear there is still much work to do and the figures outlined by the FCA are testament to that. Women are set to control 70% of global wealth within the next two generations which makes the business case for the change in culture we want to see undeniable and I echo Sheree Howard’s sentiments that this should be a wake up call to the industry.
“We also strongly support the FCA’s expectations of firms to tackle individuals who do not meet their professional standards for both financial and non-financial misconduct. We believe that there is a clear role for the regulator to set out its expectations of firms in this regard and are committed to working with other relevant industry bodies to better equip firms with the tools needed to identify and act on issues of non-financial misconduct.”
