Last week, the excellent Money Marketing Interactive Harrogate event took place, where I was fortunate enough to be part of the panel on diversity in advice.
Last week also saw the 10th anniversary of the Lehman Brothers’ collapse. “If it had been Lehman Sisters rather than Lehman Brothers, the world might look a lot different today,” repeated International Monetary Fund head Christine Lagarde.
She can say this with confidence, as IMF research shows a higher proportion of women on the boards of banks and financial supervision agencies is associated with greater stability.
UK financial services companies would benefit from more stability if there was more gender neutrality and more senior females. Today, approximately 13 per cent of financial advisers, 10 per cent of lead fund managers and 19 per cent of pension scheme trustees are female.
Across the UK economy, construction and financial and insurance services have the worst gender pay gaps. One can appreciate that men are generally physically stronger than women and more suited to digging ditches, but what about advising on or managing money?
I would say women are actually better than men at this because of the female brain. Why? Well, scientists have discovered approximately 100 gender differences between the male and female brain.
Understanding differences from a neurological perspective results in greater appreciation of the different genders. What is more, management consultants McKinsey has found that gender-diverse companies are 15 per cent more likely to outperform.
From an advice perspective, women’s heightened emotions and empathy results in them taking a longer time to commit to a financial decision.
A woman will often have a lower risk outlook and show more interest in ethical investments than a man, who, due to his testosterone, will take more risks and be more keen to move on to his next task.
Female clients need more time to understand a purchase fully but it is worth taking the time, as women are seven times more likely to refer a professional service than males.
As for managing money, research from Morningstar shows an investor who picks a fund based solely on the manager’s gender could see better results with all-female teams in both the equity and fixed income spaces.
But despite this, I am seeing too many female city-based friends of mine losing their jobs due to Brexit leading companies to relocate operations. I fear this shedding of staff (which has been estimated to be as high as 800,000) will result in “jobs for the boys” and business owners recruiting based on a “people like us” mentality.
We have a long way to go to reach gender neutrality in financial services, but a good next step would be to ensure the industry communicates with women in a way that resonates with their different brain types. As it stands, the majority of product and service providers are failing in this.
Kim North is managing director at Technology & Technical