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Catherine Emerson is the head of strategy at Kernel Wealth.
OPINION: Around 130 years ago New Zealand became the first country in the world to give women the right to vote. Since then we’ve made a thousand little changes to create a more equal society at work, and at home.
We’ve had one of the world’s most diverse parliaments with over half being made up of women, increased paid parental leave and we’ve greatly reduced the gender pay gap (16.3% in 1998 down to 9.2% in 2022).
All this progress gives us cause to celebrate, and we should. But as a woman working in the financial services industry, I can see that we still have a long way to go.
READ MORE:
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* #EmbraceEquity: What can women do to improve their financial resilience?
We’re not there yet
On a personal level, there’s obviously no way I would have been a senior member of staff at an investment firm 130, or even 50, years ago. The progress we’ve made is incredible but let’s not sugar coat it – we’ve still got a lot of work to do in the workplace.
Less than a third of senior management roles are filled by women and 10% of businesses don’t have a single woman at executive level, according to Grant Thornton’s 2022 Women in Business report. The gender pay gap still exists and is much wider for Māori and Pasifika women.
Better policy, hybrid working and pay transparency
There are thousands of factors driving this inequality, all of which add up over time to give women fewer high-level opportunities, and lower pay on average. For example, parental leave legislation also automatically assumes that the woman is the primary carer, unless she explicitly states otherwise. Weird, right?
It’s important to have good, equitable government benefits, but the private sector also has a role to play. Pay transparency is a step in the right direction – when businesses have clearly defined pay bands, with progression defined by training, tenure and performance, disparities in gender pay are lessened, according to the International Labour Organisation. Turns out businesses are less likely to pay women less if everyone knows they’re doing it.
Flexible, remote and hybrid working can also make a difference, reducing the career setbacks women experience after childbirth by allowing them to fit work around their responsibilities as caregivers. At a time when we’re experiencing a chronic skills shortage, this can also help employers attract talent. I’d call that a win-win.
The realities of women and wealth
Clarissa Hirst, head of content, communications and marketing at the Financial Services Council says that despite the challenges women face in the workplace we should still celebrate our progress, particularly when it comes to investment education:
“Look at platforms like Girls That Invest, The Curve, It’s No Secret or Māori Millionaire and you’ll realise there’s been a shift in the way women’s finances are being talked about. Women are now talking to women – we’re no longer being talked to by men. To me, that’s incredible progress.”
Despite that, she says it’s not all roses: “Women continue to be paid less, retire with less, do more unpaid labour in the home, feel less confident about money and rate their financial literacy lower than men do.”
To be exact, women have a KiwiSaver balance 20% lower than men on average and retire with an average of $13,000 less. She passionately dispels the idea that this has happened because women are more conservative or effective investors. In fact she says women who do invest typically perform equal or better than men: “There certainly is an investment confidence gap, but the main reasons we’re disadvantaged financially are societal and systemic.”
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The responsibility to make change doesn’t lie with just women. It lies with all of us.
Fighting a system designed for men
Women are more likely to take time out of the workplace to raise children, during which time employers don’t make KiwiSaver contributions, which can have a profound impact on compounding returns. All that inequality adds up.
“We typically get paid 9% less than men do, on average. Add to that the fact that we get taxed more for things like menstrual products – this adds up over time. There’s a lot of inequality, which means no matter how financially aware we are, we’re fighting against systems designed for men.”
What we really need is to work together and for those in positions of power to lend their voice to the cause.
“Businesses could implement more equitable parental leave policies, the industry could do more to educate Kiwis about how best to prepare for retirement. And the government could help by tweaking KiwiSaver settings so that it better caters to all New Zealanders, not just those who work consistently throughout their lives. It’s about everyone working together.”
Growing wealth for the future
Women need to be part of the change to put ourselves on level financial footing with men, and part of those changes need to involve investment. But we’ve got a bumpy road ahead – over 60% of women have no or limited knowledge and experience of investing compared to under 40% of men, according to the Financial Services Council.
Daphne van der Oord, head of Australia and New Zealand at S&P Dow Jones Indices, says that part of the problem lies in representation in finance: “It’s one thing to say that our door’s open but if there’s someone on the other side that you can’t identify with or relate to it’s hard to seek help. It’s hard to learn more.”
She makes a fair point – according to Consilium less than a quarter of financial advisors are female.
Part of addressing that inaccessibility can also come through democratising finance. Daphne explains that when the industry was completely male dominated and centralised the establishment had a vested interest in making finance inaccessible, exclusive and confusing. To charge higher fees.
Exchange-traded funds (ETFs) and the ready availability of investment information and data has helped to break that trend.
“Index solutions available through passive funds and ETFs have been a democratising force. They’ve simplified matters instantly: from investment accessibility, diversification and transparency.”
She adds that it’s the industry’s job to continue the work to make investment and education more accessible, not just for women, but for everyone.
Having those difficult conversations
The responsibility to make change doesn’t lie with just women. It lies with all of us. With that said, women shouldn’t be (and have never been) passive or inactive. We can have difficult conversations with our managers or executives when something’s not right and propose a solution to make things better for all women at our places of work. We can access investments, speak to female financial advisors and have open conversations with each other about our work and our money.
It’s not easy (and it’s definitely not fair that we have to) but in many workplaces having these conversations can be effective. I did it myself when I recently went on maternity leave. Kernel didn’t have a parental paid leave policy and when I brought it up they wanted to support me.
It wasn’t my idea of fun at 36 weeks pregnant but I put forward a framework for how our parental leave should work and all my recommendations were accepted (and more employees have since taken parental paid leave or inquired about it).
It’s little steps like these that make a difference in the long run. They seem insignificant at the time, but over years and decades, thousands of these little changes might add up to equality.
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