Capital Markets Diversity Problem (article)

Capital Markets Diversity Problem (article)

The capital markets industry has a diversity problem.

The good news? Efforts to build and retain a more diverse workplace have become a priority among top executives surveyed by Pensions & Investments for its annual feature on the Best Places to Work in Money Management.

The highly regarded investment firm, Wilshire Consulting, embraces diverse hiring practices by being proactive in how they identify diverse talent and then aggressively pursuing it for consulting roles and, more recently, for their OCIO practice. “I need people who bring different points of view and different ways of thinking so that I can continue to grow and learn, be a better consultant and be a better leader,” the company’s president, Andrew Junkin, told CBIZ. “Research in this area has demonstrated that organizations with more diversity tend to be high-performing organizations.”

But there’s still a long way to go.

According to the U.S. Census Bureau, 80.6% of all financial managers nationwide are white, while only 8% are black and 6.8% are Asian. Likewise, 72.4% of the financial analyst workforce is white, while 15.9% are Asian and 8% are black.

That disparity extends from small, niche firms all the way to the Wall Street giants. Business Insider survey found more than 80% of all executives at Goldman Sachs, Wells Fargo, JPMorgan, Bank of America, Citigroup and Morgan Stanley are white. More than two-thirds of those executives are male.

Business Insider found a majority of those top-tier companies are doing something about it, with initiatives such as leadership and diversity training and new employee resource groups for minorities. JPMorgan Chase started an initiative in 2016 called Advancing Black Leaders to help the company better attract and recruit black talent, as well as retain and develop its existing minority workforce, CEO Jamie Dimon said in his annual letter to shareholders.

Diversity can be defined in a number of ways that extend beyond gender and ethnicity to include diversity of thought and perspective. The Diversity Project aims to ensure diverse recruitment across the industry in terms of gender, ethnicity, socio-economic background, age, sexual orientation and disability. Helena Morrissey, chairwoman of the UK’s Investment Association at the time of the project’s inception, asserts that “diversity of perspectives is essential to connect with customers and to make the right decisions.” Today’s investment climate needs global perspectives to be equipped to meet the needs of an ever-changing and expanding global marketplace. The Diversity Project undertakes a number of initiatives aimed at helping diverse talent rise up through the industry to its most senior levels.

The Forbes Finance Council tackled this topic head on in its June 2018 article, Six Ways To Address The Diversity Problem In Finance. Council member answers all pointed to not just having a more diverse work pool but also actively choosing diversity and inclusion to change the trends in the finance industry.

Most importantly, your clients will demand it. A diverse client base will be critically attuned to the issue. It’s highly likely that having a diverse workforce could be the key differentiator between the selection of your firm and that of a competitor.

“If you are not having conversations about diversity with clients yet, you will be,” Junkin says. “And you need specific plans in place to demonstrate that this is a priority for you.”

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Capital Markets Diversity Problem (article)~/Portals/0/PackFlashItemImages/WebReady/Diverse Hands.jpghttps://www.cbiz.com/Portals/0/liquidImages/WebReady/Diverse Hands.jpg2018-10-16T20:48:45-05:00