In the first of a two-part interview, PFS chief executive Keith Richards talks to Hannah Godfrey about diversity in financial advice, how the profession is moving forward, and the role quotas can play in addressing inequality.

The issue of diversity – particularly with reference to gender equality – has moved firmly to the top of the agenda of financial services businesses over the course of the last 12 months.

The government’s request that firms with 250 or more employees publish data comparing the remuneration of men and women, for example, shone an overdue spotlight on pay inequality.

Time and again, data was published that showed a clear gender pay gap between men and women that could mostly be attributed to men holding more senior, well-paid positions.

Despite the largely negative headlines that have resulted from that exercise and elsewhere in recent months, Personal Finance Society (PFS) chief executive Keith Richards appears pretty upbeat about where the advice professional is heading.

“The gender pay gap is historical,” he says. “Whether we like it or not, certainly within financial planning, it has been male-dominated – often because of the hours or the work or simply the way that society was in the past.

“That is turning now on its head – but the important part is that firms now actively think about what it is they are going to do about it. That, for us, is what has been really important – looking forward and not being frightened of the fact that we are where we are.”

Looking forward, then, Richards believes it is crucial to address the unconscious bias that might be present at some firms. “Highlighting [the gender imbalance] brings to the fore the importance of addressing it more quickly,” he continues.

“Nobody deliberately tries to discriminate against women or not bring women in but the reality is, if women don’t necessarily see the sector as a place where women are welcome, they won’t necessarily apply.

“It is therefore a case of deliberately doing things that demonstrate we do need more females and we do need a lot more diversity. We are a diverse nation, so we need a diverse adviser population that better serves the needs of a diverse consumer population.”

So how do Richards and his colleagues at the PFS go about addressing this unconscious bias? As an example, Richards picks out the way the PFS, as an organisation, works hard to ensure women are adequately represented on panels and as presenters at its events.

“I want the body to lead by example,” he adds. “And, as a result, we have found some really good female advisers who did not necessarily feel we wanted them.”

Polarised Views

Richards views quotas as useful in this respect – as an “aspirational target” – explaining: “They help you focus on how to achieve a goal rather than using a quota as definitive goal in itself.”

He reveals the PFS already uses quotas within its recruitment system for certain areas in which the body wants to see a better gender balance, although he emphasises these are not “arbitrary numbers”.

It is hard to deny gender diversity can be a divisive subject. Comments on Twitter, in particular, and the media in generally suggest some find the topic frustrating at best – and infuriating at worst – and Richards duly acknowledges the mere idea of quotas can generate “the wrong emotions” in debate.

“There will definitely be polarised views across the market – there’s no doubt about that,” he says. “I think the more it is pushed, sometimes the more other people feel threatened by it, so the best form of defence is attack

“It is a topical subject now – and some people will see it as no more than that. Of course it is good to debate yet we cannot underestimate that, for some, it is emotionally unnecessary to keep highlighting it. There are some men who are now saying there is reverse discrimination because we are only looking for women.”

Looking further ahead, Richards maintain his optimistic outlook for diversity in financial advice. “We are starting to see the role of professional advice change,” he says. “Compared to the past, the profession is naturally more appealing to women.”

This is reproduced from Professional Adviser; all views are from the publication. This originally appeared online on 11 June 2018.