Some years ago, I visited a yoga retreat in Portugal. Late at night, two women arrived in a taxi. They were from California and so had had a long journey. They explained their decision to get a taxi from the nearest town rather than try to negotiate the bus as follows: “That is what money is for. It’s for making life easier.” It struck me that this was entirely right. You might disagree. Either way, the issue feels more pertinent than ever.
The purpose of the fund industry is to help people to increase the amount of money they have. But what will those savers do with their (hopefully) expanded slice of wealth? Fund their retirement? Pay a child’s university fees? Go on holiday? Get a taxi when it matters? Support a charity?
There is a diversity of possibilities. Embracing that diversity is – or should be – part of creating the more diverse fund industry that we all (again, hopefully) think is a good idea.
I recently moved my bank account from a large high-street to a building society. The change in imagery when I log into my account is startling. Gone are the ladies and gentlemen in smart suits who are considering private health care. In their place are bike mechanics, florists and nurses who are saving up for a hillwalking holiday. I feel more comfortable in this new place, but you might not. The fund industry needs to be able to provide a good-quality service to people like me and people like you.
At Funds Europe, we are preparing for a diversity roundtable in mid-May. We’ll be looking at how fund management companies can promote diversity within the workforce – but also within the client base. For if the fund industry doesn’t meet the needs of, say, women, gay people and that most unloved of all groups, the not terribly well off, we may legitimately question the point of it.
A recent report entitled ‘Understanding the diversity of women’s wealth’, commissioned by the WealthiHer Network, delved into the specific issue of women’s financial goals. The report, which is based on interviews with 2,542 adults, found that 59% of women thought that wealth was about providing for family, security and comfort. Forget the Lamborghini. Furthermore, over two-thirds of women (67.4%) said making a social impact was of high importance when investing.
The report sets out five ways that the finance industry must improve to cater better to women. These include being more open and accessible with less jargon, offering a more personalised service and including more women in finance roles.
On the last of these, help is coming. For some investors, the gloves are off when it comes to gender diversity in senior roles. Legal & General Investment Management has voted against all-male boards of S&P 500 companies since 2017 and now does so globally. It has also announced that from 2020 it will vote against the largest 100 companies in the S&P 500 and S&P TSX where there are currently less than 25 percent of women on boards.
What difference might more women in senior roles make? Well, for one thing, Tamara Gillan, co-founder of the WealthiHer Network, says that “for women, wealth is not an end in itself but a means to an end”. It’s back to the taxi situation.
Let’s hope more diversity in the boardroom can mean better outcomes for clients. In the fund industry, that means excellent, fairly priced products for all. For let’s not forget that some of the most vital tasks in our society – nursing, teaching, caring for the elderly – are carried out by people who are overwhelmingly female and poorly paid. Surely they deserve the very best.
Fiona Rintoul, editor-at-large at Funds Europe
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