Increasing diversity has always been the hot topic when it comes to financial services companies. The benefits for those who have walked the walk in terms of embracing gender diversity are clear. A few studies suggest that an average organisation in general consists of 37.55% women and 62.45% men. Another interesting statistic is that women make up only 38% of entry level, 40% middle level, 44% of senior level and 25% executive level positions in an average company.
When it comes to the finance sector, data shows that gender diversity is significantly more problematic in some financial services sectors than others. Female representation can be represented from worst to the best as Investment management (20%), Investment banking (21%), Capital markets (22%) and Venture capital/ private equity (24%) sectors fall way behind their other financial counterparts.
In sectors such as capital markets, investment banking, and investment management show that female representation is low in entry level positions, and remains steadily low as seniority rises. This is also described as a “pipeline problem”, where there are too few women entering the finance field to fix the gender gap. Data suggests that the barrier for women not only lies in advancement (like equal access to raises and promotions) but also lack of early education, qualified female talent or recruitment marketing to women at entry-level positions.
Studies show some astonishing statistics with regard to female representation when it comes to roles:
Chief Investment Officer — 5.1%
Vice President Investment Banking — 5.5%
Senior Partner — 8.3%
Equity Trader — 8.7%
Trader — 11.8%
Venture Partner — 12.3%
Portfolio Manager — 12.6%
Executive in Residence — 13.7%
Investment Banking Associate — 14.2%
Private Equity Analyst Intern — 14.2%
Nowadays women in general have started to take more interest in managing their finances. However, studies show that they seem to have a preference for female financial advisers. Yes, financial services are trying to cater to women’s financial needs, however, is that really enough?
Why women are more suitable for the role of a financial advisor?
These days, finance has more to do with coaching the mindset of the client and help them develop healthy financial habits to achieve their goals. Skill sets such as patience, listening, empathy and understanding are a requirement as per situation. Women happen to be inherently great with these skills and are also more sensitive toward risk and long-term financial planning.
There have been plenty of known instances where single women have been ill-advised by male family members who are more assertive about their financial knowledge since men have different needs when compared to women. Having a female advisor can help women be more assertive about their financial decisions.
It’s important that young women are persuaded and motivated in the financial sector to not limit their capabilities and expressly share their ambitions with their family members. There is also a new generation of women advisors who have professional qualifications and work independently, making social media as their primary medium to make their presence felt.
Lack of support and incentives
Financial support happens to be the primary motivation in this field. No college student would suddenly make up their mind to become a financial advisor unless there is credibility and viable remuneration built around this profession. Some companies have their own initiatives, conduct training and supply content for women, by women.
Some women advisors have pointed out that clients in western countries have begun demanding their advisory firms to have more gender diverse teams. This, however will be a slow climb for India.
How many women actually show interest in finances and actually speak about it openly? It is not a likely topic to pop up in a conversation with friends and family normally. This itself is a problem. Women need to start showing active interest in managing finance. Recently, there have been a couple of organisations that have emerged to help women reach financial independence. Such initiatives prove to be of great help. With Finin, you can set goals specific to you and your family and the AI also hyper-personalizes your banking experience based on your spending habits. Yes, women and men spend money differently, with Finin you will be able to set goals and save more irrespective of your gender! Join our waitlist : https://finin.in