Independent financial advisers (IFAs) we interviewed reported that five years ago, their client base split approximately 60% / 40% in favour of men. However, in the last two years, that gap had narrowed, with women making up 47% of IFAs client base, and men accounting for 53%.
This trend is also reflected in the gender of the person who leads the client-IFA relationship. Five years ago, men led that relationship on the client side in 56% of cases, with women taking the lead only 21% of the time, and the remaining 23% seeing both genders take an equal role. Fast forward to today and the percentage of male-led client-IFA relationships has dropped to 51%, with female-led relationships moving up to 22% and joint decision-making moving up to 27%.
Mark Stevens, Head of Intermediary Services at Investec Wealth & Investment, is heartened by the trend towards a joint decision-making model. “It’s encouraging to see that increasing numbers of couples are taking joint responsibility for managing the relationship with their adviser. Men have tended to take this role among older generations but fortunately this is showing clear signs of change. It has to be in the clients’ best interests for both partners to be equally involved in this key relationship,” Stevens explains.
What’s driving the increasing prominence of women as recipients of client advice? Investec’s research found various factors contributing to a more equitable gender balance in the sector. Divorce was one of the key factors identified, and indeed 25% of new female clients coming to IFAs are divorced. However, IFAs identified an increase in successful businesswomen as a decisive factor in 19% of cases, and women taking more control of family finances as key in 26% of cases.
It has to be in the clients’ best interests for both partners to be equally involved in this key relationship
Our research suggests that financial advisory firms might not be taking full advantage of the opportunity that the growing female client base represents. When asked what changes they were considering to their business model in order to attract a greater number of female clients, fewer than 10% identified any specific measures. Alarmingly, more than 90% responded that they are either doing
nothing specific, or not considering any changes at all, in order to attract more female clients.
“Given the growing importance of women as clients, surprisingly few firms are currently taking steps to encourage greater gender diversity among their advisers,” Stevens says, “but this may start to gather momentum over the coming years as the industry evolves.” This research suggests that the growing female client base represents a huge opportunity for those IFAs ready to react.