On this day of the year the editor takes a look at how women's position as wealth management clients and managers is faring.

Banks and wealth management firms as varied as UBS, LGT, Lombard Odier and Deutsche Bank – and many others – certainly appear aware of the need to focus on women’s issues in wealth, investment and business. Today is International Women’s Day – a chance to think about how much progress has been (or not) made in bringing more women into the industry and serving them better as clients.

Of course, the sector should be working on this topic 365 days a year, not just one day of the year.

My admittedly very anecdotal (and male-centred) impression is that progress is being made, but it’s still a way off from achieving a clear-cut result. After attending wealth industry conferences and other gatherings in certain countries in the past five years, say, my rough guess is that about 80 per cent of the attendees are men (this seems most pronounced in Switzerland, where I've been working this week). On the investment side, UBS (see here) has presented figures suggesting that female investors and future retirees fare less well than men, for example over investment returns and having sufficient money to live on in their older years. 

Events such as IWD inevitably give rise to data trying to highlight problems and who is doing better. Example: According to claims.co.uk, Iceland leads as Europe’s best nation for female employees with a score of 86.49 out of 100, with its 190,000 female population earning approximately €40,500 annually – twice that of Greece. At the bottom end of the rankings is Turkey. Example: the UK-based Association of Investment Companies found that only 12 per cent of investment trust managers are female, unchanged since 2022 which is in line with the global average for the funds industry. However, 41 per cent of investment trust directorships are held by women, up from 36 per cent in March 2022.

Deutsche Bank has brought up some eye-catching data. It noted that the process of female financial inclusion has been going on for a long time. For example, some US states started giving women very limited property rights in the late 1700s, but it was not until 1974 that women’s right to equal access to financial services was fully established with the US Equal Credit Opportunity Act. (A similar timeline can be observed for the UK.) That means that many people today will have “grown up in a period when women in these countries could still need a man’s approval to open a bank account or take out a loan,” the German bank said. It also noted that legal barriers to female financial inclusion are now “much reduced around the world, but we are still far away from achieving UN Sustainable Development Goal #5: To empower women and girls and ensure their equal rights”. 

While not all data speaks to exactly the same issues, there’s a trend of slow, but hopefully steady progress on certain fronts, coupled with frustration about that slowness. (On the frustration side, I have spoken to female bankers and investors who are shocked at how the venture capital sector, for example, remains reluctant to fund female-controlled startups.) I also notice that in the commentary this year, there is, rather as with ESG investing lately, a solidly pragmatic tone rather than a more evangelical one. Advancing the career opportunities for women at all levels makes hard-nosed sense and builds sustainable revenue, not a piece of PR spin or feel-good fluff. 

For example, consider these comments from Abika Martin, investment manager at LGT Wealth Management: "I have seen criticism of this year’s theme where it was interpreted as implying women are somehow responsible for inspiring inclusion when our to do lists are already pretty full, given that we undertake around 60 per cent more unpaid labour than men outside of the work environment and around 200 hours of `non-promotable’ tasks a year within it (Harvard Business Review). Equally, because women as a cohort are not monolithic, it’s an important message; with the various challenges faced by women in the workplace, it can be easy to focus on our differences such as motherhood, ethnicity, or gender and gender identity, but if we focus more on the commonality of our experiences and `inspire inclusion’ we are more likely to drive positive change as a collective.”

That is very well said, and Martin made this equally important point: “That positive change is important not only for us as participants in the industry workforce, but also for our clients, as the FCA has highlighted in its recent discussion and consultation papers. We are a service industry and we need to reflect the communities we are here to serve: 60 per cent of UK wealth is estimated to be in the hands of women by 2025, so the communities we serve are increasingly female. Commercially, this represents a huge opportunity for our sector, but we must go about it the right way by building trust, confidence and knowledge among women from all walks of life. This will inevitably be easier for businesses that actively involve such women at all levels of decision-making internally."

The war for talent
And that last paragraph takes us to the crux of the issue. As women are increasingly among the ranks of HNW individuals, whether it is about liquid wealth from inheritance/divorce/separation and bereavement, or their own investment savvy, or in the form of businesses they have built, they want to be served by firms reflecting more gender equality. (That doesn’t and shouldn’t automatically mean, by the way, that they don’t want their business and investments to be run by men. That does not follow.) And there’s a talent crunch out there (as our US correspondent, Charles Paikert, had reason to report about here). Ageing populations and declining birth rates mean that there are likely to be fewer people entering the workforce, including wealth management and banking. If that trend persists, then companies must be more open to hiring, supporting and promoting women because that’s where the talent battle takes it. That's a self-interested reason, but no less potent for that.

And here's more in that vein from Lombard Odier: “It’s incredibly important to have female representation in the wealth management industry; diversity brings different perspectives and views to the table, and enables more rounded conversations to be had." That comment came from Jennifer Ollerenshaw, head of Wealth Planning UK at Lombard Odier. “Women and men often have a tendency to think differently; neither is right nor wrong, but it’s the ability to consider these different points of view together that can lead to the best outcomes for clients and for businesses," she said. Work needs to continue, Ollerenshaw continued. 

“Female representation has increased across the industry, particularly in the last decade, but it’s still the case that most senior leadership roles are dominated by men. This isn’t down to one particular factor, but is likely a combination of various factors: barrier to entry into the industry or for promotion (either actual barriers or perceived), fewer female mentors and role models, balancing family life and work, and also confidence," she added.

The end client
A “can-do/must-do” mind-set also comes from UBS when it comes to private bank and wealth management clients, and their situation. Marianna Mamou, head advice beyond investing at UBS Global Wealth Management chief investment office, yesterday talked of how, in a world where gender gaps persist, women can partially offset such gaps with a sound investment approach. Mamou said a study by the Alliance for Lifetime Income shows that 53 per cent of women aged 61 to 65 anticipate that their retirement savings and income will not sustain them for their entire lifetime, contrasting with 36 per cent of men in the same age range. Similar research from Scottish Widows found that 61 per cent of women fret about running out of money in retirement, compared with 52 per cent of men being concerned. 

The 2022 WTW Wealth Equity Index, which takes a holistic view of gender inequities across women's lifetimes and aims to quantify the extent of the gender wealth gap, also shows the gender discrepancies of accumulated wealth at retirement. The report highlights how there is a gender wealth gap globally and consistently across countries (with regional variances). Globally, upon retirement, women are expected to accumulate 74 per cent of the wealth that men have. 

Perhaps unsurprisingly, Mamou argued that women must be more focused on financial planning than might now be the case, and the sector has a role in helping women improve their financial confidence. This seems a no-brainer, and a “win-win,” in my view.

Another angle here is how, because women tend to outlive men in the West, and because of divorce rates, there’s been talk for some time in the wealth sector about the “suddenly single” state where women, perhaps previously unused to handling finances that were the preserve of their former spouse, are launched into the space in a way that can be intimidating. That’s something the sector needs to keep working on.

Changed working environment – how far does it matter?
One major force at work has been the shift in work patterns. The move by staff in some firms to working from home some of the week might, superficially, be thought of as benefiting women, but I wonder about this, at least as a general observation. First of all, it is assuming quite a lot to think that women like spending more time working at home if they have children, for example. For a start, women will want their partners, for example, in many instances to be able to share that child-rearing role. With younger women, forging a new career and needing to get the interaction and mentoring that all of us need when we leave school and college, working from home with all the distractions and joys of spotty internet is a mixed blessing. As some were reminded of during the pandemic, going to an office creates useful boundaries that can all too easily get blurred. The work shift may present opportunities to fine-tune working arrangements that are more female-friendly, but managers must understand that this is not a simple calculation.

Another point is that gaining more opportunities for women by removing prejudices, restrictive work regimes and so on should be thought of as a positive-sum game. Everybody is meant to win, including men, from this process. Let’s not forget that on the male side, there are problems. The academic and writer, Richard Reeves, of the left-leaning liberal Brookings Institute in the US – argued in a book entitled Of Boys and Men: Why the Modern Male is Struggling, that young men in the US, for example, are now falling significantly behind women in academic qualifications, test scores, university admissions and completion of degrees. At some point, this gap could further erode the advantage men have in certain occupations, but that will not be because women have won a fairer deal or made wiser choices over money and career, but because men are in a worsening state. That’s not a “good” way to narrow a gap.

Whatever some of the issues that remain to be worked out, my hope is that International Women’s Day gives the industry a chance to take stock of what progress has been made, and what’s left to do. 

(On a separate but related note, this is a reminder to readers about our Wealth For Good Awards programme, which remains open to entrants. See more here.)