As more women are becoming high net worth individuals, the business case for recruiting and keeping more female private bankers and wealth managers is clear. But what are firms doing to achieve this?
Mindful of the need to retain talent, wealth management firms and banks say they are working to improve the share of women in the workforce and ensuring that they stay on board.
The need to retain female wealth managers is particularly acute given work-life balance considerations of a kind illustrated by the lockdowns. This news service wanted to take time out from the geopolitical storms to look at longer-term concerns, including the need to build more diverse workforces.
Firms such as Kleinwort Hambros, RBC Wealth Management, Kingswood Group and Brown Shipley are using several methods such as flexible working, parental leave initiatives, networking and mentoring to stem a potential exodus of talent.
"It is still very tricky to recruit and retain female advisors. Even now there is still a lot to be done in our industry,” Kate Turner, regional director for Schroders Private Wealth’s London hub, who leads a large team of advisors, told WealthBriefing. “Throughout my career I have always found that the top performing teams are those with a strong mix of diversity. We also find that clients want a range of advisors to work with. It can be difficult to get this mix.”
More women are becoming wealthy; some prefer to talk to female advisors. But there are constraints that a traditionally male-dominated business finds hard to overcome, such as when women leave the workforce to have a child and then struggle to return to work in a comparable role.
Some progress is being made, even at the most senior levels: The UK has climbed to second in the international rankings for women’s representation at board level. Almost 40 per cent of UK FTSE 100 board positions are now held by women, compared with just 12.5 per cent ten years ago. And almost 38 per cent of women are on the boards of FTSE 350 firms, according to the FTSE Women Leaders Review, which monitors women’s representation in 24,000 positions on FTSE 350 boards and in leadership teams of the UK’s biggest companies.
There are a number of high-profile women in banks and wealth businesses. For example, among prominent appointments are those of India Gary-Martin as a non-executive director at C Hoare & Co; US banking heavyweight Citigroup named Jane Fraser as its CEO last year; she has already made her mark with a series of restructurings of its business lines. Also in the US, Stephanie Cohen is global co-head of consumer and wealth management at Goldman Sachs. In the UK, Eva Lindholm is head of wealth management UK and Jersey at UBS. Also in the UK is the case of Dame Helena Morrisey, former CEO of Newton Investment Management – a prominent advocate for more women in the industry, who wants woment to form a large proportion of portfolio managers in the UK.
It turns out that greater diversity is also good business. Consulting firm McKinsey & Co has found greater diversity across genders and ethnicity to be strongly correlated to higher profitability and value-creation. Its 2021 report Diversity Wins, its third investigating the business case for diversity, suggests that “the relationship between diversity on executive teams and financial outperformance has strengthened over time.”
Diversity is also linked to better decision-making, with academic studies demonstrating this. Research has suggested that diverse teams are 35 per cent more likely to earn above average returns, and yet 98.7 per cent of all assets in the US are managed by Caucasian men.
Reversing the trend
So how is the industry trying to reverse this trend in terms of recruiting women wealth managers?
Brooks Macdonald, the wealth manager, does not use women-only talent programmes, but said it tries to make sure that when influencing talent initiatives and developing its people there is a focus on gender diversity, for example ensuring that every job has a gender-diverse shortlist of candidates. Every interview panel must also have gender diversity to ensure that there are different perspectives and reduce unconscious bias. The firm also works with agencies to achieve gender-diverse shortlists.
“My team do a lot of work to proactively build a gender-balanced pipeline in the marketplace so that’s particularly relevant to client-facing roles,” Tom Emery, chief people officer at Brooks Macdonald, told WealthBriefing.
The firm has also recently introduced a graduate programme, Inclusive Futures, a partnership with Investment 2020, part of the Investment Association, to attract diverse candidates, through which the wealth management firm aims to attract, retain and grow talent from all walks of life.
"We have a meritocratic recruitment process but there are still lots of ways we can take positive action to attract more female candidates. Women, as well as other minority groups, have long been underrepresented in our industry and we are taking several steps to address this. As part of our commitment to gender diversity, we are signatories to the Women in Finance Charter and partner with City Hive, which encourages better female representation in the investment management industry," Emery said.
Over at Lombard Odier, its Luxembourg office participated in the Positive Actions programme developed by the Luxembourg Ministry of Equality, receiving “Positive Actions” certification. Last year, the bank appointed two female country managing directors: Alberica Brivio Sforza in Milan and Mariella Assumpçao Gontijo in Sao Paulo.
“In the last five years (2017 to 2021), Lombard Odier saw a retention rate of around 80 per cent among the almost 200 women that we employed in positions with front office responsibilities (bankers, portfolio management, wealth management and banker’s assistants),” the firm told this news service.
Brown Shipley, the UK firm, signed up to the Women in Finance Charter in January 2018. At that time, it had 18 per cent female senior management representation. This has increased to 32 per cent as at September 2021. It is committed to having 40 per cent in 2023.
Female representation on its executive committee has risen from 12 per cent in 2019 to 33 per cent as at the end of 2021. Brown Shipley has its first female chair and has appointed a female non-executive director. For the first time the firm now has female board members (29 per cent).
“We have made positive progress within our senior management in 2021 and need to extend this across our population with a continued focus on ensuring that at all stages of [the] employee life cycle there is a policy of gender neutrality and that there is gender balance in recruitment shortlists,” Elizabeth Weir, head of private banking and London, said.
At Kingswood Group, recruiting and retaining females is vital to developing its diverse workforce, the UK firm said. It has recruited more females into its executive team. The wealth manager said it is important to have role models within leadership as well as having female advisors. Currently 14 per cent of its overall advisor count is female.
“Recruiting and retaining female advisors will remain a continual focus for Kingswood,” Rachel Bailey, managing director, head of HR at Kingswood, said.
For its part, RBC Wealth Management said the challenge for wealth managers is to ensure that they have diverse teams that reflect its clientele. The firm is trying to encourage greater diversity among those entering the workforce by being more vocal about the spectrum of roles, products and services in the industry. Along with other companies, it is actively tackling this by going to universities and talking much more broadly about jobs within wealth management. Asking people from a variety of roles and backgrounds to talk from personal experience is making a real difference to the demographic of those attracted to careers in the industry, the firm told this publication.
“If firms aren’t considering second careerists then they are missing a trick. The diversity of thought that individuals can bring from other sectors is what our clients want and need,” Katherine Waller, head of new sales delivery at RBC Wealth Management, said. “Second careerists think differently about things than those who have always worked in wealth management. They have managed different challenges, asked different questions, worked in different leadership teams and worked with different clients. This is like a breath of fresh air for the industry.”
(Additional reporting by Tom Burroughes)