Poor gender diversity not a 'women's problem': Panel

Gender diversity issues are no longer a "women's problem but a business problem", according to wealth managers, who urge the industry to seize the opportunities to make meaningful changes.

In a fireside chat discussing women and wealth at the Stockbrokers and Investment Advisers Association Conference (SIAA), prominent leaders of wealth advisory firms discussed the tangible benefits of leading gender diverse teams.

Panellist Kate Galvin, the chief executive of Victorian Funds Management Corporation (VFMC), said the firm's investment team is 44% female, while the entire organisation boasts a 50% gender balance. Moreover, VFMC decreased its gender pay gap from 26% to 16% in a short space of time.

This was made possible by its leaders making a concerted effort to be deliberate in becoming a gender-balanced fund manager about five years ago.

"We created the case for why we did that. I think that the best investment decisions are made by diverse teams. You've got diverse voices at the table deciding how you deploy capital, then you get to the right outcome - a tested outcome," she said.

Leaning into gender diversity, VFMC ended up with not only with a gender diverse team, it also has a workforce that is ethnically diverse with staff speaking at least 10 different languages.

"We've got people from amazingly different backgrounds, because we became a place where we were different, and we obviously wanted to be different," Galvin said.

For firms that want to move the dial on their gender pay gap, Galvin advises leaders to be very clear with the teams they lead on what they want to achieve.

Some firms may come across structural impediments that won't make it possible to create diverse or bigger teams. This is something, she said that must be thoroughly discussed.

"But you need to set an ambition and maybe even a target. You need to think outside the square about how you want to lean into that target," Galvin said.

Leaders spearheading the initiative must also open and public about their goals, she added, noting that the results can "be really game changing."

Looking at the business in its entirety, Rebecca Hill, the head of Morgan Stanley's wealth management unit in Australia, said teams that have gender diversity "significantly outperform" teams that don't have such diversity. This is across different metrics such as revenue, growth, and return on assets.

Additionally, Morgan Stanley's analysis found that those who operate in teams in the US as opposed to a solo practitioner outperform one and a half times than individuals.

"So, there is a real tangible benefit to diversity; to building bigger teams and I do think that's the way the industry has to move forward," Hill said.