FCA data reveals major gender gap in authorised firms

FCA data paints a bleaker picture for gender diversity in financial services than recent studies suggest, as investment firms are urged to commit to a five-year plan to improve equality within their businesses.

Speaking at an event for The Diversity Project, an initiative launched by former Newton Investment Management chief Helena Morrissey a year ago which aims to create a more diverse workforce in the investment management industry, FCA supervision director Megan Butler said out of a total of around 137,500 employees in financial services firms, only 23,000, or 17 per cent, are female.

The figures come from the FCA approved person register which includes everyone with a position of responsibility within authorised firms.

Butler says: “As a regulator we’ve implemented the senior manager regime. We have many conversations about conduct, unsurprisingly. But it is conduct that frameworks culture and as a regulator I am interested how you hire people, and how you promote [them].

“There is research that says diversity will support better decision making in the interests of every single firm. Our own statistics within the FCA makes a slightly less comfortable reading.”

For executive roles, the FCA estimates about 12 per cent of top jobs are currently held by women. Looking at high street firms that the regulator is responsible for supervising, 57 women hold senior executive positions and 467 roles are held by men.

Butler admits the regulator itself, and not just regulated firms, can play a part in progressing diversity.

Butler says: “We need to become the best regulator we can be. It’s really important that we reflect the society that we serve.

“Much of some of the regulatory initiatives are under way or coming soon that we hope will drive further change so don’t read into this any kind of pessimism about the future. There is real commitment for change.”

Within its senior leadership team, the FCA aims for half to identify as female by 2025.

The FCA data comes along The Diversity Project Benchmarking Study, conducted by Mercer, which found that in the investment industry, women account for only 23 per cent.

The study, conducted in the second quarter, surveyed over 3,755 participants from 24 firms including 650 investment managers.

The report found that while people with disabilities represent 11 per cent of the population, in the investment industry they account for 4 per cent.

While the 81 per cent of the industry that identifies as white British is slightly lower than the 89 per cent in the UK population, on other measures, such as education and gender, the face of the investment industry is further out of sync with the rest of the population.

The Diversity Project carries a five-year plan for firms to improve their engagement in the cause.

Butler said five years is a “reasonable” time frame to expect “significant change”.

Also speaking at the event, Morissey says: “From what I’ve seen over the last few years is that there is a real commitment to address the [diversity] issue now. There is now a sense of urgency and a sense of realisation that we have to do this if we are going to continue to deliver good results for customers.”

Aviva Investors chief executive Euan Munro says: “We’re not happy [with the results of the survey] and I guess many leaders of our industry are not happy with where we are and this is an opportunity to discuss how we get better.”