Why red tape is tying up women in advice

Research published in Harvard Business Review in 2019 found that women in business perform better and earn more when they have a supportive network of female peers around them: “Because women seeking positions of executive leadership often face cultural and political hurdles that men typically do not, they benefit from an inner circle of close female contacts that can share private information,” it stated.

Deriving quantitative statistics for the proportion of women who prefer dealing with female advisers is difficult — not least because there are relatively few of us. Yet surely the same applies in this context too.

Anecdotally at least, it is a common point I often hear from female clients. Indeed, many admit they would have sought financial advice sooner had a female adviser been known or available to them.

Regulatory failure locking out women

I have previously written in ifa about some of the myriad issues restricting women from entering and progressing within our industry. One I’m particularly raising is the inability to have an extended period of time off.

One of the greatest barriers of all is the one that should be working to best meet the needs of the Australian community — regulation.

Adviser Ratings suggests the number of female advisers has been falling since 2018 — the same year as the banking royal commission.

In an overzealous attempt to remove conflicts of interest within the industry, regulators have made it harder for new blood to enter the industry, with women bearing the bulk of this burden.

Unbalanced CPD demands

I don’t need to tell you, my peers, how onerous the current CPD and regulatory framework is for advisers. However, what you may not realise is just how out of step our requirements of 40 CPD points are with those of other professions.*

Lawyers — the people responsible for interpreting and defending our nation’s complex and ever-changing legal frameworks – have a mandated minimum of just 10 CPD points annually. Teachers have a minimum of 20 CPD points.

And while chartered accountants have a similar 120-point tally requirement over three years, their annual minimum is only 20 points.

Only doctors and engineers — quite rightly, given the implications for human life and safety — have higher requirements.

Unequal burden on women

Of course, all advisers, regardless of their gender, are affected by these regulatory constraints. Yet women shoulder a greater degree of the burden.

For a start, women are overrepresented in unpaid caregiving responsibilities — both for children and elderly parents/in-laws, sometimes simultaneously. Woman account for 88 per cent of all primary carers leave taken in Australia, according to the Workplace Gender Equality Agency (WGEA).

Given the smaller time commitments to CPD for lawyers and teachers, and the more flexible requirements for accountants, these professions lend themselves more favourably to working part-time or taking extended periods of leave, such as for caregiving. So is it simply coincidence that women make up the majority (53 per cent) of legal professionals and 71 per cent of teachers, but just 22 per cent of advisers? I’d wager no.

Additionally, women changing professions may have smaller savings buffers with which to fund their initial training and ongoing professional development, owing to the gender pay gap. Statistically, any previous career saw women earning 13.3 per cent or $253.50 per week less than their male counterparts. Making the accreditation and ongoing fixed costs more cumbersome.

Regulators must step up

There is a sense of growing interest in advice from women, such as the growing numbers of women attending industry conferences and events nationwide. Yet this interest is not translating into higher numbers of practicing female advisers, with many women either remaining in support roles or walking away altogether.

With 50.7 per cent of Australia’s population being female, who on average outlive men by 4.1 years, it’s crucial that women have access to proper support structures and advice — including access to advisers of their preferred gender.

Sadly, even with the best efforts of our industry, this will prove difficult to achieve unless regulators come to the party and address the imbalances locking women out of advice.

*CPD point requirements based on current Queensland standards where industry regulation is state based.

Helen Baker, licensed Australian financial adviser and author