New report highlights industry efforts to strengthen ethnic diversity

New steps to improve ethnic diversity and inclusion in investment management have been set out today in a new report by the Investment Association (IA), in conjunction with law firm Eversheds Sutherland.

Investment management’s increasing focus on D&I stems from a widespread recognition across the industry that more must be done to address the under-representation of professionals from ethnic minority backgrounds, especially at senior levels, and to cultivate a consistently inclusive culture. Some of the key findings include:

• 75% of firms currently collect, or have begun work towards collecting, data on the protected characteristics of their workforce, including ethnicity. However, legal, data protection and issues of trust currently stand as obstacles to full disclosure, with only a handful of firms currently obtaining sufficient data to draw meaningful conclusions – issues this report, supported by the IA’s diversity data working group, attempts to address.
• 96% of firms are running regular training to educate their employees on D&I related issues, including understanding racial bias; micro-aggressions in the workplace; everyday racism; privilege and belonging. The report emphasises the importance of refreshing and re-evaluating training on a regular basis to ensure it is effective.
• 96% of firms are currently engaged and supporting at least one charity or organisation seeking to open industry access to a more diverse cohort of young people, such as Investment20/20, the IA’s talent programme for the industry.
• 42% of firms have signed up to at least one initiative, pledge or charter that suggests or requires action or targets to improve their ethnic diversity.
• 87% of firms have dedicated diversity networks, which play a central role in supporting employees and shaping, producing and driving change.

Chris Cummings, Chief Executive of the Investment Association, said:

“The findings of this report show that our industry is turning ideas into action, and taking steps towards greater ethnic diversity and inclusion. Change is essential so we can better represent the customers and society we serve. Much is already being done but more sustained action is also necessary.

“Many of the positive actions outlined in our new report recognise there are no quick fixes. But combined with targets and our commitment to change, they will go some way to strengthening ethnic diversity and inclusion across investment management.”

Sandra Kerr CBE, Race Director at Business in the Community, said:

“This report cuts straight to the heart of the challenges facing companies investing in diversity and inclusion. Until issues like the lack of comprehensive data or the barriers to ethnically diverse entry level talent are resolved, real change will not come fast enough. Firms’ choice to prioritise listening over top-down action is a deceptively simple step which is actually a hard-won game changer and I am excited to work with the investment sector as it makes the most of these findings.”

Matthew Allen, Head of Financial Services Sector, Eversheds Sutherland, said:

“We recognize that a diverse talent pool brings many benefits for our business and that in order to achieve that goal we need to have authentic conversations about race and ethnicity that may not have happened in the past. As Head of our Financial Services Sector group, I am particularly determined to ensure that we engage with our clients across all parts of the industry in order to share and deepen our knowledge, and to support and galvanise the journey towards greater racial and ethnic inclusivity across the entire financial services ecosystem.

“Against that backdrop, we are delighted to have partnered with the Investment Association on this important piece of work which we hope helps catalyse further debate and action on racial and ethnic diversity by shining a light on some of the themes and best practice which have emerged in the investment management industry over the last 12 months.”

The report, Ethnicity in Investment Management – Building Positive Intentions into Meaningful Action, contains case-studies from several firms on their experiences advancing ethnic diversity and inclusion, as well as snapshot analysis from other industries, and aims to provide an overview of the obstacles firms have faced as well as the actions they’ve taken to improve their ethnic diversity.

Ethnicity in Investment Management builds on several recent IA initiatives to advance the position of ethnic minorities not only within investment management, but across UK plc. In October 2020, Investment20/20 launched its senior black leaders mentoring programme to grow the industry’s next generation of black C-suite leaders, and last month the IA outlined its priorities ahead of the 2021 AGM season, with the IA’s IVIS warning it will ‘amber top’ listed companies that fail to disclose the ethnic make-up of their boards.

The report follows the IA’s 2019 Black Voices report looking specifically at the experiences of black professionals in the investment management industry. The report bases its findings off discussions with 24 firms from across the industry that collectively manage 60% of the £8.5 trillion of IA members’ managed assets.