Gender equality in the SA financial sector has a long way to go

By: Ann Sebastian, Head of Equities at Terebinth Capital

Ann Sebastian, Head of Equities at Terebinth Capital, spoke to us about how financial advisors could be better serving the needs of their female investors, and her views on how there’s plenty of room for improvement when it comes to the role of women in the financial industry.

What unique investment challenges do women face and how can they overcome these?

There are several reasons women don’t invest as widely as men do. Firstly, women earn significantly less than men for numerous reasons, including being penalised by motherhood, and they may be under the notion that they need large amounts of cash to start investing. Secondly, society conditions women to believe they’re not good with money, that they should outsource this task to their husband. The main way to overcome these issues is through education.

What key elements should inform an effective investment strategy tailored for women?

Women face different challenges when seeking to accumulate wealth. They generally earn less, take career breaks to raise families, often work part-time and live longer. They often invest with a longer-term focus and are more inclined towards investments meeting ESG criteria. They tend to hold a larger proportion of their wealth in real estate and other real assets. All these factors contribute to the wealth and investment gender gap. It’s important for the financial advisor to understand the investment objective because women are more open to hearing your advice.

What approach could be used?

One of the approaches for developing an investment strategy that accounts for the wealth and investment gender gap and women’s higher longevity is lifecycle investing. This breaks down the investing into distinct life stages and looks at the unique financial needs defining each stage of an investor’s life. In each phase, women can adjust their investment strategy to reflect their financial goals and needs as they evolve. This puts their money to work at every stage, leads to fewer missed opportunities, and helps build a more secure financial future. A lifecycle investing approach is really tailored to the individual, which is an approach I think many women enjoy.

Are women really more risk adverse than men?

I think that’s an interesting discussion. There is this perception. For example, women are not inclined to buy equities in riskier investments and more likely to prefer fixed income investments. But I believe women aren’t risk averse, they are risk aware. I think for them what’s important is taking calculated risks. Women are often advised by traditional advisors to stay in less risky investment options, such as short-term bonds and cash equivalent, to avoid risk – so there’s stereotyping. This is bad advice and has serious repercussions for women over their lifetime. If a woman is interested in an opportunity and it’s aligned with her values, she will be motivated to take the risk. She might just take more time to make an investment decision.

What advice would you give to women about investing?

Educate yourself about investment basics. Gain confidence by taking action to improve your investment knowledge. Commit to replace fear with self-assurance. This will come with learning more about investing. If you’re going to be a successful long-term investor, you need to understand what you own and why you own it.

Secondly, ask yourself these three questions: What is the goal with this money? When do I need it? What kind of risk am I willing to take? Next, have a look at the investment options out there. Try to find an investment or mix of investments that best matches whatever you’re trying to achieve. Finally, investment is about money and power. Every woman should invest because they should have the freedom to make their own decisions and not be dependent on anyone or anything. We talk a lot about the gender pay gap, which unfortunately we can’t impact ourselves, but we don’t talk enough about the gender investment gap, which we can impact ourselves by starting to invest today.

How do you think women are faring in the financial industry in South Africa in general?

I think pay gaps exist in the financial industry, particularly in the asset management or investment industry. As long as women don’t advance and hold important roles across all levels, this is going to be an issue. There are significantly less female CIOs, portfolio managers and key decision makers. This leads to many females leaving the industry because they don’t feel they can grow their careers. In addition, women face other challenges, such as lack of mentoring or championing and inadequate networks or high-profile opportunities. Many asset managers say there are programmes in place to correct this gap, but many are just tick-box exercises and not intentional. I think the South African financial industry, and specifically the asset management industry, has a long way to go.

With Terebinth Capital being an independent, female-led company, what do you feel you offer that’s diverse or special?

We have been intentional in building a diverse and inclusive team. We have 57% female representation, well distributed across the seniority levels in different departments. For example, we have a female MD, COO, and multiple female heads of units. We have key philosophies about empowering young female talent and a very clear skills transfer. I think women feel comfortable in an environment that is inclusive and diverse. You want to see other senior females because you feel if they can get there, you can too. We are intentional in building roadmaps for mentorship and sponsorship for young female investment professionals. We allow women work-life homelife flexibility. And because we have many women in senior positions, younger females feel safe to grow.

What do you think other companies could be doing to better support women?

Companies need to be intentional about bridging gender inequality. They need to adopt diversity policies with clear gender diversity targets. They should be running programmes to boost gender diversity in senior management, training managers and employees to eliminate unconscious bias that may end up preventing inclusion of females. They should build a safe environment where women aren’t afraid to speak up.