Empowering Women in Financial Advice

We all have a part to play in raising the number of women advisers

I explained in a recent article why addressing the gender imbalance in the financial advice industry is far more than a box-ticking exercise. It represents a powerful means of safeguarding the future of our profession and better reflecting the needs of our clients.

The big question, of course, is this: exactly how do we encourage more women to pursue a career as a financial adviser? After all, this would demand nothing less than the reversal of a trend that stretches as far back as any of us might care or dare to remember.

I have written in the past about the advice gap. We can hope to meet this broader challenge only if we build a new pipeline of talent and do much more to ensure the many advisers now approaching retirement have effective succession plans in place.

Yet there is no guarantee that these measures alone would result in more women advisers. They could even tip the balance further away from equality. And if we somehow close the advice gap without achieving a “levelling up” in gender terms – well, that would be a golden opportunity missed.

So what can we do? I think it is important to think generationally. The wider experience of science, technology, engineering and mathematics – collectively known as STEM – serves as a useful guide here.

Below are three potential lessons from the academic literature on the lack of women in STEM. They are arranged in chronological order, ranging from pre-career to early career, to give a sense of how attempts to recruit more women advisers might span different life stages.

  1. Generate interest as early as possible

It is routinely assumed an individual decides on a job in financial advice relatively late in life, perhaps after first working in an entirely unrelated capacity. Historically, many advisers came from the military. Believe it or not, I came from the motor trade!

Yet there are many people who make their career choices much earlier. For example, studies have found girls tend to lose interest in STEM subjects even before the age of 16 – very likely because of prevailing stereotypes[1].

This tells us there could be considerable value in promoting awareness of the financial advice industry during school years. An even greater focus on developing children’s financial literacy might help spark more interest among young girls.

  1. Make the most of key influences

Informal influences on career decisions can be extremely powerful, particularly during a person’s teenage years. They usually come from sources close to home and are intrinsic to what are sometimes called “relationship constellations”.

Family members provide the most obvious illustration of the phenomenon. Research has shown, for instance, that a significant proportion of women who become engineers have fathers who themselves work – or worked – in the same trade[2].

This does not mean existing or former financial advisers are honour-bound to urge their daughters to follow in their footsteps. But they could certainly play a larger part in encouraging increased female participation in our industry – say, by serving as mentors, advocates and sponsors in schools and universities.

  1. Recognise the importance of role models

Especially if they are young, women need to be inspired by the achievements of others[3]. At the same time, it is essential that such achievements are associated with role models who are perceived as “real”.

This requires a successful career in financial advice to be seen as aspirational but not out of reach. It requires frank discussions about the pros and cons, the attractions and the shortcomings, the good stuff and the bad. In short: it requires honesty.

Such insights are often best delivered by someone who is only a rung or two higher up the ladder. Manifest seniority can prove intimidating and might even act as a deterrent, while tales of clearly atypical “superwomen” can also be counterproductive.

I am not suggesting for a moment that these ideas will produce a sudden and spectacular surge in the number of women financial advisers. Ditto the many other efforts and initiatives that have been proposed and/or put into practice over the years.

But maybe a crucial point here is that those of us already in this industry can do more to make a difference. We cannot simply hope for a dramatic change. We cannot simply wait for an astonishing turnaround. We have to do our bit in whatever way we can.

This means seeing the bigger picture. It means understanding the women financial advisers of the future must find our profession attractive, must sincerely want to enter it and must be welcomed into it at every turn.

We all know this is a gradual process, as demonstrated by the fact that women’s representation in STEM as a whole is still so low[4]. But any acceleration we can help bring about has to be worthwhile – both for the adviser community and for the many clients who stand to benefit from positive, lasting change.

Katie Brinsden is Managing Director of Truly Independent.

[1] See, for example, CNN Business: “The exact age when girls lose interest in science and math”, February 28 2017 (https://money.cnn.com/2017/02/28/technology/girls-math-science-engineering/index.html).

[2] See, for example, Medium: “Women in engineering: an historical oxymoron of the greatest importance”, May 27 2020 (https://medium.com/through-the-eye-of-the-prism/women-in-engineering-an-historical-oxymoron-of-the-greatest-importance-9a9476822c34).

[3] See, for example, British Psychological Society: “Female peer mentors have long-lasting positive impact on female STEM students”, January 24 2023 (https://www.bps.org.uk/research-digest/female-peer-mentors-have-long-lasting-positive-impact-female-stem-students).

[4] See, for example, WISE: “Updated workforce statistics”, September 2023 (https://www.wisecampaign.org.uk/updated-workforce-statistics-september-2023/).

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