The financial industry has long been the preserve of the elite in society, both in the UK and more globally. This group, unsurprisingly, is chiefly composed of white men who often come from privileged backgrounds (hands up: I am a white man). The numbers are stark, with women accounting for over half of employees at 50 of the world’s biggest banks, insurers, asset managers and professional services, but just 25% of senior positions (FT, 2018). I found that statistics are hard to come by for black, Asian minority ethnic (BAME) people in financial companies – which may be telling in itself. As a proxy, Sir John Parker’s report ‘Beyond one by 21’ into BAME diversity on company boards found that only 85 (8%) of the 1,050 directors in the FTSE 100 index were from a minority ethnic background, while 51 companies did not have any black and minority ethnic board members
Diversity is severely lacking in all sectors but this particularly true of financial services. This has a number of impacts including but not limited to (i) companies suffering from group think lack different perspectives and as a result make inferior decisions (ii) the best people don’t get available jobs which creates inefficiency. This situation has turns leads to poorer financial performance relative to more diverse peers (McKinsey, 2015).
More specific to my sub-sector of the financial services industry, asset management, there is a big issue with diversity and the unfairness when it comes to pay and bonuses. A study published by the 30% Club (a think tank focused on increasing representation of women in senior roles) found that there was a 18-48% pay mean salary gap and even more shocking a 34-86% mean gap in bonus. This is clearly not a fair system, and it will likely take time to increase diversity of all types. One way I can help with this situation is to help people from different backgrounds learn about the profession, the different roles available and the type of skills required for investment positions.
My personal sustainability challenge over the coming years is to encourage people different from myself with a different perspective and background to think about a career in asset management. This will first start by helping my team recruit for new interns through a partnership with a local charity, and then helping those interns from diverse backgrounds to get the most of their time with us in (i) building up there understanding of the roles available to them and what it would take academically (ii) develop their network in the industry and enable them to pursue a fulfilling career in asset management.