After the assassination of George Floyd in the US more than two years ago, wealth managers have made major efforts to increase the level of racial diversity in their organizations.
However, new research into the UK’s financial services sector shows that wealth managers have gotten worse over the past year at improving the workplace experience of ethnic minorities.
According to the Race to Equality Index, compiled by nonprofit organization Reboot, wealth management was the only financial services subsector to fare worse this year — scoring 64 points for diversity, equity and inclusion out of a target score of 100. This was a drop from 66 in 2021.
Hedge funds saw the biggest improvement overall, rising to 68 from 65 in 2021. Meanwhile, companies in insurance, investment banking, private markets, wealth management and pensions saw slightly better results from a year ago.
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Reboot’s index is based on an August survey of 800 mid- to senior-level employees at 392 UK financial services firms, representing nearly £1.4 trillion.
The annual index comes as wealth managers have made efforts to increase ethnic minority representation within their ranks, including participation in initiatives such as 10,000 Black Interns and their support for the #TalkAboutBlack campaign.
Wealth managers and investment banks were among the companies that pledged to improve racial diversity in the wake of the 2020 Black Lives Matter resurgence.
Goldman Sachs, JPMorgan and HSBC were among those announcing targets to increase the number of black recruits joining their ranks in the coming years, while a project to attract 100 placements for young black wealth management graduates is the initiative “10,000 Black Interns” spawned .
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Sachin Bhatia, an Invesco executive who co-leads the race and ethnicity workstream at the Diversity Project, said there was an expectation that asset managers would take the lead in supporting some of these initiatives.
“Progress has been made in some areas, albeit slowly, but we need to step up our efforts,” Bhatia said.
“We know that many wealth management firms have taken concrete steps to attract, develop and retain diverse talent, but this assessment shows that the industry as a whole still has work to do and needs to ensure that creating inclusive cultures is a staple remains a strategic goal with clearly measurable measures.”
Reboot’s annual index comes after a separate study published last month found that nearly a third of ethnic minority professionals working in Britain’s financial services sector said they had considered quitting due to a lack of professional progress.
More than 400 financial service providers said people from diverse ethnic backgrounds still don’t have as many career opportunities as white counterparts. Meanwhile, 31% of survey respondents from minority ethnic backgrounds said it was what prompted them to leave the financial services field, while 35% had considered not applying for certain jobs as a result.
To contact the author of this story with feedback or updates, email David Ricketts