Much progress made, more to go

Opinion

The financial industry is no longer the old boys’ club it once was decades ago.

Indeed, Canada’s largest investment firms, banks, insurers and credit unions have all made tremendous strides to boost the number of women in their ranks, particularly in leadership and advisory roles, including financial planning.

So, this March 8 — International Women’s Day — Canada’s financial institutions indeed have much to celebrate regarding progress made particularly in the last decade toward gender equality and, more broadly, efforts regarding equity, diversity and inclusion (EDI).

Yet more work remains, say three Winnipeg women who have worked in the industry for years and now hold leadership roles.

“More and more women are becoming financial advisers and planners,” says Christine Van Cauwenberghe, head of financial planning at IG Private Wealth Management.

“In fact, last year, 49 per cent of the (certified) financial planners we recruited were women, which is a big improvement.”

Given women make up a little more than half of the Canadian population, it’s certainly progress, especially through the lens of Van Cauwenberghe.

She started in the industry about 25 years ago, among a handful of women in financial planning.

“It was very much still that old boys’ club about who you knew and who you golfed with.”

Van Cauwenberghe admits more work remains to see true parity in the industry workforce, but the industry is markedly different today.

Especially with the rise of ESG (environmental, social and governance), financial institutions have become notably more progressive, concerned that their workforce reflects the customers they serve.

“It’s like anything else,” says MaryAnn Kokan-Nyhof, a certified financial planner and division manager with IG Wealth Management, also with more than 20 years of experience.

“Everyone is focused on the boardroom tables with gender and other kinds of diversity.”

These efforts are not only good because they reflect fairness and promote equality. Diversity is also good for business because it brings new perspectives, she adds.

“It’s been proven that when you have a diverse board that the company is more profitable.”

Plenty of studies point to diversity’s benefits, including one by Gartner finding diverse teams achieve 30 per cent better performance than homogeneous groups, while a McKinsey & Company report pointed to the most diverse companies being 36 per cent more profitable than non-diverse peers.

Yet EDI remains a work in progress, says Aimee Palmer, vice-president of sales at NEI Investments (a leading provider of responsible investment funds).

“To be honest, we haven’t really moved the needle in 80 years in terms of gender representation,” she says when taking a broader perspective of financial services — from investment advisers to financial planners to portfolio managers and securities analysts.

“We’re still sitting at 15 to 18 per cent women.”

Of course, the push is on to be more diverse because of the recognition that women, people of colour, people with disabilities, and non-binary and transgender people are slowly but surely gaining economic parity and prosperity.

Consider Statistics Canada data showing that between 1976 and 2015, women’s average personal income grew from $16,100 to $35,300 (in constant 2015 dollars). Men’s income is still significantly higher over that span, growing from $48,400 in 1976 to $51,400 in 2015, but the equity gap was cut in half, Statistics Canada noted.

Arguably, women and other underpaid groups require much more help to grow their wealth. To that end, a Mercer study in 2021 found women retire two years on average earlier than men with 30 per cent less wealth.

Yet these gaps in wealth could shrink even more in coming years, Palmer says.

“Women will typically be the beneficiaries twice amid the transfer of intergenerational wealth — from their aging parents and often being a surviving spouse.”

This trend has been underway for decades with widows — who may have left investments to their husbands — looking for advisers who reflect their values, Kokan-Nyhof says, who speaks from experience.

“My client base is predominantly widows and women-led families, and they typically look for women advisers who are empathetic, compassionate and reliable,” she says, noting these traits are certainly not exclusive to being female.

But she still sees a diversity gap for advice, amid efforts to fill it.

“IG is doing an amazing job at promoting and encouraging (EDI),” she says, adding the director who hired her was a woman, and that she herself looks to hire and mentor young women.

These efforts are already changing the industry for the better as women tend to be more values-focused when making financial decisions, which has driven trends like responsible investing, Palmer says.

“There is now an impact piece to that as well,” she says, noting many women are interested in investments that do social and environmental good — like affordable housing projects and clean energy.

“It’s a perspective of ‘I want my money to do more than just grow over time.’”

To Van Cauwenberghe, EDI initiatives making the industry more reflective of the client-base will only become more commonplace in the next few years.

Simply put, most people want to see themselves reflected in the financial companies they must trust to help grow wealth to retire, buy a home and support their families.

“It’s like seeing a doctor where people feel more comfortable with a male or female doctor,” she says, noting that gender does not always matter to everyone.

“If you have a more diverse advisory team, that is more likely to resonate with more people who need financial help.”