Diversity imperatives snapped into focus

Accountability for fulfilling vows of diversity and inclusion has been scarce, but a spate of new scholarship and outreach programs signaled progress.

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Diversity promises made in 2020 and 2021 started to be fulfilled in 2022.

The wrenching events of mid-2020 — the murder of Minneapolis resident George Floyd; high-profile incidences of racially motivated violence; and racial disparities in the impact of and response to the Covid-19 pandemic — spurred pledges of solidarity for racial and economic justice. National accountability for fulfilling those vows has been scarce, but a spate of new scholarship and outreach programs in the advisory industry signaled progress.

Greater accountability and transparency for the insurance industry landed in the form of a report released in September by the House Financial Services Committee. It documented that while 91% of large American insurance companies made public statements in 2020 about improving diversity in their ranks, only 16% translated their lofty missions to specific goals for workforce diversity and only 0.04% applied their mission to hiring more women and minority-owned asset management firms. Still, the insurance industry embodies greater racial diversity on its corporate boards, with 22.3% of seats held by racial minorities, than do publicly held banks and investment firms, according to prior reports released by the committee. Gender diversity on boards is roughly equivalent at insurers, with women comprising 28.5% of directors; investment firms, with 28%; and banks, with 30%.

In autumn, three large industry firms activated their diversity aspirations with financial support to expand scholarships and resources intended to win women and racial minorities to the advisory profession, in partnership with the Certified Financial Planner Board of Standards Inc., Merrill Lynch Wealth Management led the way with a $1.25 million donation, while Charles Schwab & Co. and Wealthspire underwrote scholarships. Separately, the Diversitas symposium at the University of Akron gained momentum as it looked to expand its scope to recruit midlife career shifters into the advisory profession.

Propelled by simmering hostility that spilled into view in early 2021, Asian women in the investment industry raised their voices through a first-of-its-kind report released in late 2022 by the Association of Asian American Investment Managers. The research found that 65% of Asian women in the investment industry detect racial assumptions that block career advancement, especially as they seek to rise above middle management.

“All women deal with caregiving stereotypes, but Asian women deal with the additional perception of being subservient or weak,” said Maryling Yu, chief marketing officer of Backstop Solutions, a corporate sponsor of the research.

MAKING THE BUSINESS CASE

Finally, lest there be any doubt about the already-well-established business case for advancing women in the advisory and investment sectors, a report from consulting firm Simon-Kucher & Partners calculated that women would be willing to pay $14 billion more annually in value-added fees — if only the industry would offer them the additional services they want.

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