Is the client facing role in financial services representative of future clients?

3 minute read

We have recently witnessed a growing focus on ensuring equal representation in the workplace and none more so in need for change than within the financial services industry, notably, financial advisers.

Within wealth management and financial advising, women tend to be outnumbered by their male counterpart on a ratio of 6:1 and 10:1. Couple this with the average age of a financial adviser in the UK being 58 means a significant portion of these professionals will be looking to retire in the next couple of decades. Therefore, attracting new professionals to the financial services industry is key.

The next generation

The next generation filtering through are not coming quick enough which means there will be a considerable undersupply of advisers within the next 10-15 years, according to a report by Recruit UK. With approximately 15% of the industry being represented by women, is this the perfect time to balance the representation, particularly as much of the future wealth will be controlled by women?

By 2025, over half of millionaires in the UK will be female and up to 70% of the wealth being passed down over the next two generations will be inherited by women. While this may be suggesting that the clientele for advisers will be growing in female representation, it is also important to highlight how seven out of ten women who seek financial advice prefer a female adviser.

When seeking financial advice, most people want to be able to relate to whomever they are speaking with. After all, financial services is a people industry and ‘people deal with people’ so they have confidence in the support they are receiving. It is important the end client is comfortable enough to disclose what their financial objectives are, whether it be growing their wealth, saving for retirement or wanting to spend it on home renovations. Discussing a financial position is considered by most people as being more sensitive than discussing a medical issue so being able to trust the adviser is key.

The financial services industry does need to act now to ensure the next generation of advisers fully represent the clients they are speaking with as we see a significant shift in wealth and gender representation across the board in the coming decades.

As environmental, social and governance (ESG) objectives become increasingly more important for investors, equal gender representation throughout a company will be a key factor when doing due diligence.

We have recently started to see the progression in gender diversity within financial services management and board positions. A study by management consultancy firm Oliver Wyman found that women represent 20% of executive committees and 23% of boards for financial services firms as of 2019. This is up from 11% for each category in 2011, however there is still more growth needed with the client facing roles such as the financial adviser and investment manager.

At Quilter Cheviot, we believe it is key to have sufficient female representation from our investment managers, interactions with clients and advisers we engage with, to the companies we invest in on behalf of our clients.

It will be interesting to see how the financial services continues to progress in attracting new talent in authorised roles, such as the financial adviser and investment manager, to develop a more diverse and representative industry. Whilst there have been improvements we are not there yet!