Financial services can't afford to ignore female talent

0:11Sarah Lyons: Hello and welcome to the FT Advisor podcast. I'm Chief Reporter Tara O 'Connor. Today I'm joined by Jenny Segal, who's held senior roles in financial services and is now a workplace culture expert and Parmenian's Chief Customer Officer, Sarah Lyons. This Sunday, March 8th, marks International Women's Day, which was honoured for the first time in 1911. I'm hoping Jenny and Sarah will be able to give us their insights on how financial services is faring when it comes to the representation of women in the sector and what this means for clients. As women in financial services, I mean, how do you feel that women are presented in the industry, really, to start off with?

0:48Jenny Segal: Well, I think the numbers have improved at entry level, but things change round about mid-career. when the numbers of women tail off and the pipeline really narrows, narrows sharply at points of real influence. And we see around only 12 % of fund managers are women and the female representation in senior UK financial services roles is around 30, 35%. So it's not great. It's not great.

1:18Tara O'Connor: And I think if you take that on to the financial advice market, female financial advisors represent about 18 % of all financial advisors in the UK and that has not moved the dial is not moving so that's been around that level now for about 20 years and we can talk later about why the reasons of that for that might be.

1:38Sarah Lyons: That's interesting so in the US we've had a rollback on diversity and inclusion policies and that's something that has kind of come over to this side of the pond and we've seen it here with the regulator reducing their own diversity and inclusion policies. How do you think that this has impacted the gender balance of the sector or will impact it in the future?

2:03Jenny Segal: I think there's two ways we can think about this. Firstly, the firms that really believe in it are still doing it anyway. The ones that didn't really believe it were paying lip service. You could say that nothing's really changed on that front. However, there is evidence of rollback, particularly from the US firms. And I think one of the big risks is this almost quiet deprioritization that happens. It's not like firms are announcing they're pulling back on DEI. It's happening at the sidelines without scrutiny. And that's the problem, that it is without scrutiny, because if people were up front about it, then there could be pushback.

2:43Jenny Segal: There could be arguments made, but it's being done quietly. and the language is softening. So inclusion's becoming culture, equality's becoming fairness and we're seeing a rollback of data collection. And it's those small procedural decisions that compound over time and simply go unnoticed until the data catches up.

3:03Sarah Lyons: Yeah. And once that happens, how easy or difficult is it for us to kind of come back up to where we were?

3:12Jenny Segal: Well, it becomes harder and harder because it impacts the way that a business looks. It impacts the culture of the business. And I think that comes down to the heart of the problem in your first question about why it is that there are women are underrepresented in the industry. I think it's not so much a recruitment problem, getting people in the door. It's a cultural problem that when women do get in the door, once they start climbing the ladder, they don't necessarily like what they see. And until we address that, we're going to have an ongoing problem. Yeah.

3:41Sarah Lyons: So you think more needs to be done, is it to keep women in the industry?

3:47Tara O'Connor: Absolutely.

3:47Sarah Lyons: Yeah.

3:48Tara O'Connor: I think that's right. But I also think for the financial advice market and financial advisors particularly, the lack of, the market's so unstructured, if you like, full of thousands and thousands of small firms. the lack of a structured entry program or even knowledge of it being a career option is probably one of the root causes in terms of financial advice. I think the regulator in 2025 rolled back on its mandatory D &I requirements on firms. And the language used is disappointing, right? Because they said, we want to reduce the burden on firms. We want to drive growth. Well, I'm not sure D &I activities, policies are negatively impact growth and negatively impact businesses.

4:50Tara O'Connor: It's the wrong way of looking at it in my mind.

4:53Sarah Lyons: Where do you think that idea comes from, from the regulator? Is that from firms themselves pushing back on it or is it just an approach that they've taken maybe without consulting?

5:05Jenny Segal: I think part of the problem when anything is regulated is it stops being about the thing itself. That's the risk. It becomes about reporting on the thing. And a huge amount of effort gets focused on the box ticking rather than actually addressing the underlying problems. And that's where the burden comes in.

5:22Tara O'Connor: Yeah, no, I can see that.

5:24Sarah Lyons: Yeah. And obviously now you said about kind of financial advice, that number not having changed for, was it five years, you said? 20. Oh, 20 years. 20, 2005. It's not really moved. I mean, what impact does that have, do you think, on the services that financial advisors can provide?

5:46Tara O'Connor: The services themselves are probably the same. It's the impact that those services have. So if you speak to women, 65 % of them would rather have a female financial advisor than a male financial advisor. when you when a woman has a female financial advisor they're two and a half times more likely to take more investment risk because of how those things are talked about in the conversation and that directly impacts the financial outcomes for women and so to me it's it's quite short-sighted because at the end of 2025, women had, it's well documented, right, 60 % control of 60 % of the wealth in the UK.

6:33Tara O'Connor: So huge, huge market. They're not seeking financial advice. They feel under represented by financial advisors themselves. And when they do speak to a female financial advisor, they're more likely to invest and they're more likely to invest more money. So it just makes, and they're going to get better outcomes. So it's kind of a win, win, win. And And I don't really, I'd kind of like to move away from a label of D &I on this stuff because it's just good business sense, right?

7:01Jenny Segal: Yeah, it's one of those wonderful intersections where everything's aligned. Yeah. It makes totally good business sense. And it's right for society as well.

7:11Sarah Lyons: Yeah. And do you think that that would be quite a good way, I guess, for like the regulator and businesses to look at it as it being more about their business?

7:21Tara O'Connor: And opportunity. it's a growth opportunity without a shadow of a doubt and i think the biggest challenge is addressing some of the root causes that you talked about jenny around it's seen as an old boys club it's seen as a culture that's traditionally quite difficult for women and and while the retail banks are making good progress i think in terms of um female representation in wealth management asset management financial advice it's still quite poor so we've got a long way to go but the that visibility lack of a lack of a structure program just googling what exams do I need to be a financial advisor you cannot get a straight answer

8:04Jenny Segal: to that question yes and we need to address the cultural issues that are that firms have that put people off, put women off in particular. And I did an extensive project of research a year and a half ago for my book on women and workplace culture. I interviewed 77 people, 67 of them women, to find out what the issues are. And it was largely financial services people that I interviewed. And there are three problems, and it doesn't take a rocket scientist to guess what they are. The first one is hashtag me too, still really alive and well. in financial services 42 percent of the people that i spoke to had themselves directly experienced sexual harassment at work the second one is the age-old motherhood penalty which again hugely affects women disproportionately affects women the domestic load that they bear even the work they've had to do even before they get into the office and this is a societal issue until we have equality domestically that's not going to get addressed really but it falls right through we still we see we see the gender pay gap we see promotion prospects hindered because of the motherhood penalty and the third one that came through which i think is the one that's really interesting because it is much more easy to address is this phenomenon that i've calling guilty until proven innocent whereby we assume that men are competent until they make a mistake but we assume that women are not until they prove themselves.

9:37There's a much higher bar that women have to jump over

9:42Jenny Segal: before they are afforded credibility. And that's reflected in, it's a cultural thing. There's this male hubris, female humility problem whereby men across cultures, demographic, age, time, consistently overestimate their abilities and women consistently underestimate theirs. And that follows through in the imposter syndrome, which disproportionately affects women. It's about mid-50s compared to high 30s percents of people are affected by imposter syndrome. So these are issues that need to be acknowledged that there is unconscious bias whereby we don't afford women the credibility that their experience deserves.

10:25Jenny Segal: and we need to call that out live. We need to find ways of addressing it and make sure that women and men have fair and equitable career paths.

10:35Sarah Lyons: That's quite striking. The 42 % have experienced sexual harassment in the workplace. Do you think, I mean, what do you think can be done to kind of, to change that, I guess?

10:47Jenny Segal: Making it unacceptable. that peer pressure has a huge influence. And actually we see it with what's happened with Epstein. If you look at the spectrum of sexual harassment behaviour, there is some of it which is so unspeakably egregious that monsters are carrying out these kind of behaviours. And then the other end you've got the very, very many good men who would never think about doing that. And then it's a sliding scale. there's a bunch of men who when somebody says something that is inappropriate or doesn't think that's inappropriate they they disapprove but they don't actually do anything about it and that is the bulk of the people that we need to get behaviors to be to change because if it's called out live if we make it if we make it clear that this kind of banter is not acceptable then it doesn't it's not the thin end of the wedge that allows the door to be open to much more egregious behavior Yeah.

11:43Sarah Lyons: And how have you how have you both actually found your careers in financial services? How have you found that it's changed in the time that you've been in it?

11:52Jenny Segal: Well, I started 35 years ago and I'm an actuary. And I when I graduated there, I joined a firm because it had a couple of female partners and I didn't even apply to firms that didn't have female partners and I think that's really interesting the whole you can't you can't be it unless you can see it really affected my my career choices I only wanted to work in firms where I could see that there were senior women who'd been successful and I think there are definitely more many many more women in the actuarial profession which is great to see there are still there but there are still structural problems in the industry so it hasn't changed nearly as much as I would like as I wish it have I would like the young women coming in today to not have to go through those sorts of rites of passage that young women coming into the industry in the 1990s did and from my research I don't think that's the case I would agree with that I think

12:55Tara O'Connor: I think what happens more now is that behaviour is called out so I agree that it's not always called out but I think it is called out more when I think back to the 90s when I entered the industry it was I'm not going to go into the stories but I could tell some stories about how men treated women, particularly how senior men treated young women in the industry. And it was just accepted. It was just that was the way it is. And I think now it would be less so. So I think that is changing, actually. But I still think we've got an image problem as an industry, which puts women off entering. I was looking at some stats in preparation for today, and the statistics of the number of women in financial services when you compare it to the law or you compare it to accountancy are stark.

13:57You know, 50 % of lawyers are now women.

14:05Tara O'Connor: 50 % of accountants are now women. Again, you've got the pipeline problem. It reduces as you go up to partner level. But nevertheless, there is a healthy pipeline of young women coming into those professions. And we're not seeing that in the same way in financial services.

14:22Jenny Segal: I think the things that we can do to help this, there's a lot of talk about allyship. And on the one hand, I'm slightly reluctant about asking men to rush in and rescue women. However, I think having male allyship backing is incredibly important. and most women will have experienced being spoken over in meetings, having their ideas repeated 10 seconds later. And I'm not sure if it's a timbre issue, it's that women's voices are not as readily heard, actually physically audible. Most women will have experienced this and what is really helpful is if live someone else calls it out and it's particularly powerful if it's a man.

15:08Jenny Segal: So it's actually, that was Sarah's idea. That was a really great idea, Sarah. And gives credit where credit's due. And they seem really small, but those live call-outs, going back to what I said about peer pressure, really make it clear that women are valued and that they have an equal voice at the table.

15:30Sarah Lyons: Yeah, I mean, I think it's really interesting, isn't it, that those small changes can make quite a big difference.

15:37Jenny Segal: Yes. And mentorship is the other aspect. And having, as I said, having senior, visible senior women in the industry as role models and as mentors aiding the path. I think there were a generation of women who had a really, really tough time, who had to make very difficult choices between career and family. and fortunately I think that's getting better. There are still sacrifices that need to be made and women who've ploughed that furrow and are senior now, they are paying it forward. They are looking out for younger women and that mentorship really, really helps a safe space to navigate the difficult problems and challenges that are quite unique to women.

16:23Sarah Lyons: And do you think that's one of the ways that we can get that next generation in through mentorship? Yeah, I do.

16:28Tara O'Connor: I do. Yeah, I do as well. There's some really good networks in financial services now, women in banking and finance, women in platforms, very supportive, very open to anybody that wants to engage. Right. but they are serving those that are already in and I still think we have this challenge of attracting women in in the first place so I would love to see some of those organizations and you know maybe I should push for it myself become more front foot around recruitment awareness when you when you look at it and I'm in danger of stereotyping which I don't like doing but financial advice itself is a career that should suit women the skills that are needed the flexibility it affords the um and the the progress it offers the job satisfaction i think it should attract more women than it does and it's a mystery to me why it doesn't and you and you have to go to that root cause about education and awareness

17:42Jenny Segal: So I think that part of it relates to what you were saying about having female advisors advising women. I think it's the way that the perception of financial services is, that there is this machismo about it. There is this place where you can come and get rich in financial services. And that puts a lot of people off and also I think probably disproportionately women off. If we make it much more about purpose, what's the societal value that financial services offers? And it is huge. The gender wealth gap is massive. Women have a different career path because they often have children and they have career breaks, these kind of things that materially affect their wealth.

18:27Jenny Segal: and if we position it that this is actually solving a problem you're helping society and as the move from defined benefit to defined contribution we all have to be our own chief investment officers we all have to take responsibility for our own wealth in our in our old age and it's that's a really difficult thing to do so if we frame it as purpose driven rather than yes than than money driven money driven yes i think we'd have more luck in attracting women in.

18:55Tara O'Connor: I agree with that.

18:56Sarah Lyons: Yeah and Sarah you said about how kind of having a female financial advisor can encourage more women to get financial advice and improve their kind of financial resilience. Is this a broader trend as well like is there a way that women approach money different to men?

19:15Tara O'Connor: I think there is so and it links to what you were saying Jenny about women underestimate their own abilities compared to men typically and the same is true of investing so um it's in my view quite lazy to assume that women are more risk averse than men but that is something you hear and see a lot it's not actually the case what women will want to do is understand the risk whereas men will take a punt right so they will assume it's all going to be okay once a woman understands risk they are more than happy to take investment risk they're more likely to stay invested in times of market volatility they're more likely to to get better returns than a man because of they've got that deeper understanding because they want to take the time to understand it and so when I see in the Parmenian book for example that women are one to two risk grades lower typically than men which material affects their investment outcomes that's because of how the investment risk is being framed in the conversation not because women are inherently more risk averse and um and i think when we talk about regulation regulation has been defined largely by men over the last couple of well two three four decades and you see capital at risk over everything and that will scare a woman perhaps more than a man but what we don't talk about is the risk of missing out the risk of um the opportunity the risk of not investing we don't give that equal weight and that's the conversation that needs to be had and i think women will listen to um a woman more talking about that than perhaps a man

21:05Jenny Segal: Is that reckless conservatism? Yes. Yeah. And we see that women are very good at risk management and we see that in female-led companies that often outperform those led by men across so many different dimensions and measures from profitability to stock price performance to employee satisfaction and even time taken for VC-backed firms to go public. Women are good at risk, risk management. They approach it differently. And that's the beauty of cognitive diversity. It's not about women versus men. It's about getting that beautiful combination because there are complementary approaches which are so valuable and valuable to bottom lines.

21:48Sarah Lyons: One final question is what would you both say to those who say there isn't a problem with representation in the industry?

21:57Tara O'Connor: I'd say look at the data. 18 % of financial advisors are women. 32 % of senior roles in financial services are taken by women and we are 50-51 % of the population it's bonkers that we're ignoring that talent absolutely bonkers I would agree with that I'd

22:19Jenny Segal: say look at the turnover rate for female fund managers 42 % compared with 28 % I'd say look at the average gender pay gap, which is 7 % in the general population, is 10.2 % in financial analysts. There is a structural problem and the data backs it up.

22:38Sarah Lyons: Yeah, super interesting stuff. I think that's all we have time for today. Thanks very much to Jenny and Sarah for joining us. Please do join us again for the FT Advisor podcast. We'll have a new edition for you next Friday.

22:57Thank you.