Only one in five proposed senior financial staff members are women

The figures show that financial institutions are continuing to struggle to fill senior roles with female talent, according to Carolyn Saunders of Pinsent Masons. Applications on behalf of female candidates accounted for 18% of the total in 2016-18, compared to 19% in 2014-16.

The FCA received just 8,471 applications for 'approved person' roles from women in the two years ending 28 February 2018, compared to 38,493 applications from men. However, applications from women had a slightly higher change of successfully completing the process, with 86% of female applicants obtaining approval last year compared to 80% of male applicants.

Approved persons are those who perform regulated functions, or 'controlled functions', at regulated financial services firms. They typically have significant influence over the firm's regulatory conduct.

"The absence of gender diversity at the top of financial services is a challenge for institutions," said Saunders, who is head of pensions and long-term savings at Pinsent Masons.

"Although this is an intractable and difficult problem, it is critical for business and society that it is addressed. It is well-established that businesses with a better gender balance typically outperform others. Also, our own research has found that female consumers are largely under-served as a consequence of the way in which financial products are developed and marketed," she said.

Research by Pinsent Masons and the Fawcett Society, published in October 2017, suggested that the lack of gender diversity in senior roles was contributing to a shortfall in the development of pensions, insurance and investment products that are relevant to women. The report found that women are underinvesting in pensions and insurance products and under-insuring themselves relative to men, and found a gender pension savings gap of 54%.

"The lack of women in senior roles means that products are rarely developed with female consumers in mind," said Saunders. "This contributes towards a financial security gap for women, who feel that the financial services industry is not relevant to them. There is an urgent need for the industry to better understand female consumers if we are to improve women's financial security and independence," she said.

The FCA has made diversity a focus of much of its recent work, including in its March discussion paper on transforming the culture at financial services firms. Since April, large insurers have been required to have a policy in place to promote board diversity; and similar requirements are due to be introduced for large EU financial services companies in June.

At the same time, the results of the UK's first statutory gender pay gap reporting exercise showed that the gap among financial services firms significantly exceeds the national average. The figures showed a 27.2% mean gender pay gap in favour of men and a 23.1% median gap in favour of men, compared to a UK-wide average mean of 18.4%, according to analysis by Pinsent Masons.

As of March 2018, 205 UK financial services firms had publicly committed to improving gender representation in senior roles by signing up to the government-based Women in Finance Charter. This commits them to setting public gender diversity targets; appointing a member of the senior management team as responsible for gender diversity and inclusion; and "having an intention" to link senior pay to delivery against their diversity targets. In March 2017, Pinsent Masons became the first law firm to sign up to the charter.