Despite much talk about inequality and diversity in the financial services industry, reports still show that the industry continues to fall short when working with women, exacerbating a persistent gender pay gap in retirement savings.
Past research has shown women are less involved than men in longer-term financial decisions and hold less retirement wealth — partly due to the gender wage gap and taking time out care-giving — to fund longer life expectancies than men. But the industry, which is still 80 per cent male, also has played a role.
In a recent Life Investments report, only 51 per cent of advisers viewed married female breadwinners as the primary decision maker. Further complicating the situation: While more than half of the married female breadwinners said they are in charge of investing, only eight per cent of spouses had the same view.
The industry is still struggling with stereotypes and unconscious bias that could hurt its prospects, especially as younger women take more control of their financial lives, become less tolerant of biases in the industry and are demanding more, according to a report by Merrill Lynch Wealth Management.
Women under the age of 45 who work with financial advisers are twice as likely as older married women to be a financial decision maker in their family, four and half times as likely as women over 55 to consider themselves knowledgeable about financial products and services and three times as comfortable making decisions on their own, according to Merrill’s research.
Reviewing analysis that tracks eye focuses, Merrill found advisers focus over 60 per cent of their time on the man in meetings with a couple.
Merrill also found miscues in live simulations between investors and advisors that included assuming the man was the financial decision maker, viewing women as more risk averse, and concluding a couple’s finances were merged and jointly invested.
Merrill Lynch Wealth Management executive, Lindsay Hans said: “Unconscious bias and gender bias exists, and being able to be transparent about that as a firm and industry is only going to make faster progress.”
Though women are more likely to recommend an adviser than men, they are also more likely to switch after a bad experience while men are more likely to confront the advisor or file a complaint.
At Merrill, Hans says the firm has trained 20,000 employees about unconscious bias and awareness of its unintended effects, as well as making structural changes, such as changing the wording on new account forms so joint accounts don’t include designations such as “primary account holder”.
The research found fewer miscues when advisers met with women alone. Women also tended to have higher risk tolerance — 2.5 times — when working with a female adviser, and made more of their own decisions, while those who worked with male advisers were more likely to defer decisions to him, according to research.
On a separate issue, of the current dreadful COVID-19 — it appears that the pandemic has made employees in the UK financial services sector introspective and prompted thoughts as to their next move. In a survey of 632 financial services employees, KPMG found that 44 per cent are mulling a career change in light of the pandemic, with just over one in 10 saying they would leave the sector entirely.
That increases to 16 per cent for those between the ages of 18 and 30. Long hours, long commutes and heavy regulation were the main complaints.
However, not all is bleak: 54 per cent of those polled said the competitive salaries and good employee benefits kept them in the sector.
A third of those under 30 said that career progression opportunities attracted them to financial services. (The writer is our foreign correspondent based in the UK)
ANDY JALIL
andyjalil@aol.com
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