Culture in financial services still needs to improve to better serve women, says FCA
Recent changes in culture within financial services firms still needs to become fully embedded in order to better attract female talent and female investors, Financial Conduct Authority (FCA) executive director, risk and compliance oversight, Sheree Howard, told delegates at PIMFA’s inaugural Women’s Symposium today (16 April).
Ms Howard said the wealth management and financial advice industry still needed a “different and better mix of advisers and advice” to ensure that women were receiving the help they needed.
While much had changed in the thirty years since she had begun working in financial services, Ms Howard said she feared the industry was in danger of “going backwards”. The rate of appointment of women to wealth management and financial advice boardrooms is continuing to fall and has fallen 28 percentage points in the last year, she said. Meanwhile, in the previous year a third of all board appointments were female directors, down from 61% the previous year.
There had also been a decline in the share of women employed in the industry overall, from 51% to 43%, despite the sector continuing to expand. While this was partly attributed to the removal of lower skilled roles in which women were more highly represented as well as advances in technology, there is more that is needed to be done to attract women into the industry, she said.
Financial services firms need to pivot towards “attracting women into more rewarding mid-level and senior roles” Ms Howard said. Adding that the way to do that was to ensure the right culture existed, so that the right female talent were attracted to the industry at the start of their career, that they were then promoted on their merit and hard work and also continue to be retained within the industry “whatever their life choices may be”.
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 and this misconduct could destroy a firm’s reputation, as well as contributing to toxic group think, she added.
Ms Howard called on firms to tackle those individuals that did “not meet their [professional] standards by risking their firm’s reputation, their clients’ money and their colleagues’ wellbeing,” she said.
She called it “striking” that 74% of respondents were supportive of recent FCA proposals to tackle non-financial misconduct.
And she also reminded delegates of the FCA’s whistleblowing hotline. She raised concerns about sexism in the City and what she called “the pernicious use of non-disclosure agreements to try to supress whistleblowing”.
“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,” she said.
Liz Field, chief executive of PIMFA, commented: The financial services industry has seen tremendous progress in both providing women with the opportunities that they need as well as creating a workplace which allows them to truly fulfil their potential.
“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 Sharee Howard’s sentiments that this should be a wake-up call to the industry.
“The PIMFA Women’s Symposium is an opportunity for our industry to recognise that business case and to seek to address the issues that matter to women, as well as learn more about the issues they face and concerns that have when it comes to navigating investing, saving and advice.
“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 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.”
