The securities industry work force is not noticeably more diverse today than it was two years ago, even as the nation's largest investment firms strive to hire more women and minorities, according to a new survey.
The survey, conducted for the Securities Industry and Financial Markets Association, showed that white men make up 45% of the industry's work force, and white women 31%. These figures represent a decrease of 1 to 2 percentage points from those in a similar survey in 2005.
The results include data from 31 firms that are members of SIFMA, which is based in New York and Washington. The firms employ about 330,000 people.
The survey showed that about 2% of the brokers and financial advisers at these firms were minorities, and 16.3% were women.
Overall, about 5% of the professionals at these firms were black, 4% were Hispanic, and 12% were Asian or Pacific Islander. The percentages doubled for blacks and Hispanics when administrative positions were included, according to the survey, which was conducted by Towers Perrin MGMC, a Stamford, Conn.-based global-professional-services firm.
Diversity-enhancing strategies that securities firms increasingly use include holding managers accountable for diversity performance, awarding financial bonuses to managers who achieve diversity goals and setting up affinity groups or employee resource networks.
Some of these measures have come about as several large securities firms, including New York-based Merrill Lynch & Co. Inc. and Morgan Stanley, along with
UBS Investment Bank in Stamford have been sued in recent years for sexual or racial discrimination. All three of these firms were included in the SIFMA survey.
At Merrill Lynch, where a two-year-old lawsuit in which black employees allege discriminatory hiring and promotion practices is still pending, diversity in the work force increasingly is seen as making solid business sense, said Subha Barry, the firm's global head of diversity and inclusion.
There are business opportunities in various minority communities, and there's an increasing acknowledgement that diversity of thought requires employing people of many backgrounds, she said.
"If you are able to employ disabled people, for example, they will give you more insight into that community, including the products they consume," Ms. Barry said. "They act as a bridge to understanding that community."
The lawsuit may have played a role in Merrill Lynch's making strong efforts to diversify, but the company "is now pursuing an active strategy" for recruiting and retaining a diverse work force, Ms. Barry said.
Lee Baker, president of Apex Financial Services Inc. of Tucker, Ga., said he believes that most securities firms are genuinely working to increase diversity, although they may have different reasons for doing so.
"Some do it because it's the right thing to do. Some do it for the purposes of marketing," Mr. Baker said. "But at end of the day, what's doing it is business and long-term viability."
Not all the baby boomers who are retiring and cashing out retirement assets are white, of course, Mr. Baker noted. A lot of money from black, Asian and Hispanic retirees is up for grabs, and people typically are more comfortable taking advice from someone they believe has been in their shoes, he said.
In fact, the SIFMA survey showed that more firms have been marketing their products and services to specific populations since 2005. The percentage of firms marketing to Hispanics, for example, had increased 17 percentage points to 44%, while those marketing to gay, lesbian and transgender individuals had increased 19 percentage points to 38%.
About 50% of firms said they didn't market products this way, according to the survey results.
Susan Bradley, a financial adviser for 26 years and founder of the Sudden Money Institute in Palm Beach Gardens, Fla., said that one reason minorities don't rush to become brokers or advisers is that they worry about finding a client base.
Mr. Baker, who also is chairman of the Denver-based Financial Planning Association's diversity task force, said the securities industry is a hard business for anyone to get into and stay in long term. But for those who haven't grown up amid multiple generations of people who understand the need for professional financial advice, gaining traction is even tougher, he said. Social networks are good for finding potential clients, but it's not the same and is more time-consuming than tapping family and friends, Mr. Baker said.
The issue of time is especially obvious at large securities firms, where advisers are required to produce early on and where company executives face other pressures, he said.
"When you have to hit a number, there isn't time to nurture [newcomers] and allow them to grow," Mr. Baker said. In the independent arena, there's a lower threshold, and they can take more time to increase production, he said.
