Wealth Manager - the site for professional investment managers

WM - Wealth Manager
Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

IWD 2019: the unpalatable truth about the gender pay gap

Initial results are not encouraging: based on the reports filed so far the gender pay gap widened by 1%

IWD 2019: the unpalatable truth about the gender pay gap

The asset management sector was forced to examine some unpalatable truths about the yawning gap between the income and status of its male and female employees last year, following the first ever release of mandatory, regulated data on gender pay gaps.

We are now halfway through the follow up reporting season, with all companies employing more than 250 people once again having to disclose detailed information on where men and women fall in their pay structure by quartile, and the size of the gaps between average pay packets by gender.

So, with the substantial qualifier that we do not yet have the full 2019 dataset, how has the industry done in the past 12 months?

Numbers do not lie

As a refresher on some of last year’s numbers: the number of top paying asset management jobs held by women stood at just 24.9%, versus a UK average of 40%. 

That was reflected at the bottom end, with women employed in 62% of the industry’s lowest paying roles, versus a national average of 54%.

Mean average female earnings were 31% lower than their male colleagues, an astonishing gap compared to the average of 10.6%.

At the headline level, the initial results this year are not encouraging: the businesses which have reported so far this year have seen the gap between the median male and female pay cheques actually widen in the period, from an average gap of 32.6% to 33.1%.

Women's relative hourly median pay (%)

Firm   2018 2017
BARCLAYS   -44.1 -43.5
JM FINN   -43 -40
HSBC Private Bank   -39 -35
RBS   -36.8 -36.5
HSBC Global Asset Management   -35 -39
CHARLES STANLEY   -33.8 -31.9
Lloyds Banking Group   -32.8 -32.80
AXA IM   -26.90 -27.20
COUTTS   -26.7 -24.4
Hermes   -24.5 -24.4
OMGI   -22 -22
BlackRock   -29 -23
Avearge   33.136 32.669

source: gov.uk

Charles Stanley’s group human resources director Kate Griffiths-Lambeth – alongside Quilter one of just two businesses which was prepared to put up someone for an interview, rather than issuing a generic statement reconfirming its commitment to equality – said the industry was struggling to address the bias of many decades.

‘Over a long time, there have been roles in organisations that women have encouraged women to do like, marketing, HR etc. If you want to see if you have good gender pay analysis, you take it down to the granularity of whether you are paying the same people for doing the same job,’ she said.

‘Increasingly, clients are asking for data, for example charities want to know what we are doing in the diversity department. Having a good balance also attracts more talent. Recruits look at these figures and it is important for them.’

Mind the gap 

Credit goes to BlackRock, which reduced its wage gap from 23% to 20%. Of a limited number of private client managers to report so far, Quilter Cheviot 

was the only one to report a narrowing, from 45% to 44%. All the rest saw their pay gaps worsen, with Charles Stanley’s widening from 31.9% to 33.8%, 

JM Finn from 40% to 43% and Coutts from 24.4% to 26.7%.

A Coutts spokesperson said: ‘Since we reported last year, there has been significant staff turnover at Coutts. The overall number of staff has decreased and this has led to a decrease in the number of women in the highest earning roles, which in turn has lead to the pay gap widening.     

‘We have a plan in place to turn this round and we are committed to ambitious targets to significantly increase the number of women we have in senior positions, which will help drive a reduction in our pay gap. Our targets are the same at Coutts as the rest of the RBS Group.’

Women in top quartile positions

Firm   2018 2017
Lloyds Banking Group   36.1 35.4
OMGI   33 34
RBS   31 30.3
HSBC Private Bank   30 28
BlackRock   28 25
AXA IM   22.4 25.2
COUTTS   21.5 25.3
BARCLAYS   19 19
HSBC Global Asset Management   16 17
JM FINN   9 9
Average   23.01666667 22.9


That echoed one of the most frequently offered criticisms of the way the government requires pay data to be presented: the businesses which have taken the most active steps to recruit women into junior positions in order to address a gender deficit may find themselves penalised because of their higher number of women in junior roles.

Quilter director of corporate affairs Jane Goodland said: ‘Even if you try to make changes to the diversity of your work force, that won’t be reflected on pay gap numbers for a number of reasons.

‘One, there is a time gap; and two, if the pay gap is because less women are in senior management roles, who may be doing a lot of stuff but not showing a lot in the numbers because you may be developing talent in lower levels, then the gender pay gap numbers won’t reflect that for several years.’


 Women in mid-quartile positions

Firm   2018 2017
HSBC Banl Plc   62 64
Lloyds Banking Group   53 53.4
OMGI   52 54
RBS   48.9 49.4
COUTTS   40.3 36.7
Hermes   37.6 33
AXA IM   35.3 35.9
BlackRock   35 35
BARCLAYS   32 31
HSBC Private Bank   32 28
JM FINN   28 32
HSBC Global Asset Management   28 27
Average   38.69285714 38.24285714


There is limited evidence that this criticism explained the worsening average numbers of the last 12 months however, with no discernible correlation between companies which reported a higher share of women in the bottom quartile earnings range, and a wider overall pay gap. 

The data became much noisier in the middle two quartiles however, where the industry was able to point to some improvement, albeit in such small margins that they may have limited statistical significance. The share of women employed in the lower middle quartile fell from 54.5% to 54.3% and the number in the upper middle rising from 38.2% to 38.6%.

Group level numbers

BlackRock, which has this year made sustainability a big plank of its active management strategy, with chief executive Larry Fink saying that portfolio companies must adopt a sense of social responsibility, said that it had made progress by addressing pay scales, and offering targeted promotions. 

The firm said that 40% of all senior leaders hired into the firm in the UK were women, as were 51% of all new hires and 68% of the UK graduate class.

It also said that 29% of its EMEA executive committee are covered by women. It aims for senior leadership roles globally to rise to 30% from 28.4% currently.

Hermes Investment Management also showed a notable increase in the number of female senior and mid-level appointments by some 3.5% in each category, although the median pay gap stayed largely unchanged.


Women in lower middle quartile positions

Firm   2018 2017
HSBC Banl Plc   73 73
Lloyds Banking Group   66.1 66.2
RBS   64.7 65.1
JM FINN   64 61
OMGI   61 59
BARCLAYS   52 51
BlackRock   50 50
COUTTS   49.7 54.2
AXA IM   46.1 51.2
HSBC Private Bank   44 48
Hermes   42.4 44.3
HSBC Global Asset Management   40 43
Average   54.36428571 54.57142857


The firms says it endorsed an inclusion strategy and three-year plan based on a review it conducted in 2018 in order to understand how to create a more diverse and inclusive working environment.

The asset management branch of HSBC also improved its median pay gap, which dropped from 39% to 35%.

The bank at group level did not do as well, however. Although there was an increased female presence in nearly all levels, the pay gap widened by 4% to 39%.

Results for Axa Investment Managers were not particularly encouraging either, with wider pay gaps and less women in the business as a whole since 2017.

Axa IM’s median pay gap increased slightly and the percentage of women, which dropped in all quartiles, fell by more than 2% in senior position appointments.

An Axa IM spokesperson said small fluctuations in the data from year-to-year are to be expected based on the ongoing organisational and people changes.

JM Finn’s median pay gap widened from 40% to 43%, with no spectacular increase in the percentage of women at any level of seniority.

Those in highly-paid positions occupied a meagre 9%, both in 2017 and 2018, while women in the mid and bottom quartiles decreased by 4% respectively.

Pledging to the future 

The latter two companies have signed the Women in Finance Charter 2017, a public pledge to reach a target of 40% of ‘senior executive women’ by 2020, a goal AXA IM said it has extended to its global workforce.

JM Finn said it had a number of initiatives in place, including a mentoring scheme, pre- and post-parental leave coaching and an annual ‘young women in finance day’ to encourage women to consider an industry career.  


Wome in bottom quartile positions

Firm   2018 2017
Lloyds Banking Group   72.1 72.2
HSBC Banl Plc   70 71
RBS   69.3 69.6
HSBC Private Bank   68 57
COUTTS   64.4 60.2
BARCLAYS   64 63
OMGI   58 59
AXA IM   56.4 58.6
JM FINN   56 60
Hermes   55.9 53.4
HSBC Global Asset Management   53 51
BlackRock   48 48
Average   61.03571429 60.37142857


Elsewhere, not much has changed for Lloyds and RBS between 2017 and 2018.

The former said it already has in place several initiatives, including a ‘Women in Leadership’ programme for mid-level managers and a returners programme to support staff after taking career breaks, and is aiming to increase women in senior positions to 40% (now 36.1%).

RBS, which recently promoted Katie Murray to group chief financial officer, said that in 2014 it set a target to have 30% (around 700 roles) of senior role appointments filled by women (now 36.8%). 

Share this story

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Share this story


Top stories

Read More