Gender diversity in financial services firms has shown no improvement over the past 15 years, according to research by the Financial Conduct Authority.
While gender diversity has become an increasingly important issue in the City, it appears that the actual amount of progress that has been made is minimal. The FCA says senior roles in finance are nearly as male today as they were 15 years. The proportion of women in senior positions across UK financial services is just 17% - almost unchanged from 2005.
Holly Mackay, founder of Boring Money, thinks the stagnation in numbers is “partly down to people hiring in their own image, but also partly down to the difficulty of juggling parenthood". She thinks there is still more of a stigma attached to men wanting to take parental leave, which impacts how couples make decisions.
“The City is not exactly bursting with cost-effective childcare solutions,” says Mackay. “Society also still defers to the woman – it’s my phone that buzzes throughout the day with news of nit outbreaks, colds and outfits for Saxon Day. I think we all have work to do to shift the dial to a more even keel.”
In its research, the FCA analysed 400,000 indviduals in its register between 2005 and 2019, estimating gender from the title given in each entry and, where ambiguous, from first names.
But while overall there appears to have been no improvement in diversity over the past 15 years, there are differences to be found depending on a firm's size and the type of role.
Smaller companies, for example, appear to employ a lower number of women in senior roles compared to their larger counterparts. At larger firms women account for around 23% of senior roles, compared to 17% at smaller companies (the FCA defines small firms as those regulated solely by the FCA and large firms as those that are dual-regulated by both the FCA and the Prudential Regulatory Authority.)
The proportion of women in senior management roles is also higher than in client-facing roles and this holds true regardless of the size of the firm - women typically make up around 26% of senior managers but just 5% of broker roles. The proportion of women in non-executive roles is also higher than those in executive functions.
Mackay says some senior male directors say that they look for women candidates but can’t find any. “If this is the case, then more needs to be done at any earlier stage in people’s careers. But people are not financially rewarded for thinking in such a long-term way so the status quo rumbles on,” she says. “We empathise and relate to people like us. Until we can fix the make-up of the industry, we’re unlikely to really see change in gender investment and pensions gaps.”
But gender diversity is undeniably getting more attention in the financial services industry. The Government's Women in Finance Charter asks firms to commit to improving gender diversity while the 30% Club campaign encourages businesses to have at least 30% of their board made up of women.
The FCA says: “That is not to say there has been no change at all. For example, the proportion of women in approved roles has risen at some systemically important banks, potentially reflecting the high level of regulatory focus on these institutions since the crisis. But even there the rise has come off a low base and only takes this group to just above a low overall industry average.”
Charlotte Yonge, manager of the Troy Trojan Ethical fund, has launched charity Girls Are Investors (GAIN) to encourage women to invest while and Sallie Krawcheck, former chief financial officer at Citigroup has founded women investment group Ellevest.
Investors can even choose funds which back businesses that have a greater level of diversity than others. The L&G Future World Gender in Leadership UK Index fund - or GIRL fund - is a tracker that invests in companies which score highly on diversity.
