Wealth and investment management has been a male-dominated industry since time immemorial, but finally, that balance is beginning to change.
The balance is changing because business leaders, including at Nadero Wealth Management, are now committing much more time and effort into shifting the established position.
Even in 2017, it was found that white men and women make up more than four-fifths of executive committees, C-level positions, and investment managers, a number many find astonishing in these current times.
It’s even more inexplicable when all the latest studies indicate that companies with more diverse management structures perform better than comparable companies who do not have a diverse workforce. Moreover, as far as the investment management sector is concerned, more diverse investment teams generate higher returns.
So why haven’t things changed already? Multiple factors could account for that, however, the cultural and institutional changes that are needed to enable recruitment and retention from a wider pool tend not to happen suddenly.
Effective change also takes a wholesale commitment from the top of the company down to alter the way people are recruited, promoted, and treated by colleagues, such as we have at Nadero Wealth Management.
So how can wealth and investment managers create more diverse and inclusive work environments, and what are the benefits of doing so for both companies and their clients?
To create a diverse pool of talent, those in the investment industry must do better to educate young people from different backgrounds about the business. Access and information about the investment industry are largely absent for many women and those with diverse racial and ethnic backgrounds. This is especially unfortunate as investment management has many benefits for people that may be at risk of bias. In investment management, an individual’s performance is evaluated on facts such as performance returns rather than subjective opinions.
Nadero Wealth Management promotes diversity through formalized recruiting processes and working with diversity and inclusion organizations.
It is an easy way out for a company to say that it is impossible to find the right applicant who will add diversity to the talent pool. In most cases, this can be reconciled by trying harder. Adding balance to an existing team can bring something extra that can be more valuable than hiring purely based on the most impressive resume. To help find that elusive talent, we look for recruits from a much more extensive range of sources than the traditional method of people we know and other existing network connections.
Even this extra effort is sometimes not enough. Engaging the services of a recruitment company with specific instructions to bring in many diverse candidates often pinpoints talented individuals who may otherwise have missed out.
Diversity isn’t only about race, gender, age, and sexual orientation. The concept of diversity encompasses acceptance and respect. It means understanding that each person is unique and recognizing individual differences. People who grew up in different economic circumstances or cultures or who have had varied careers also add unique perspectives.
Keeping hold of a pool of diverse talent is just as essential as creating diverse teams in the first place. This means that everyone needs to feel welcome – or they will leave.
At this point, everyone accepts that it is no longer acceptable to express biases at work openly, but sometimes it is the more subtle, unconscious biases that need correcting. Nadero Wealth Management first began educating employees about recognizing and overcoming unconscious bias in 2015.
Education of awareness can be enhanced by ensuring that diverse teams evaluate applicants for both new positions and internal promotion.
Some workers may feel threatened by increasing diversity programs, and ignoring those feelings can exacerbate matters. Therefore it is crucial that all people understand that everyone in the company feels they are receiving the attention and resources to grow their skills, and they fully understand the real meaning behind any diversity measures.
Simultaneously, leaders must establish that diversity and broader inclusion are an immutable part of the company.
Diversity and inclusion are not merely catchphrases; they are values that take us step by step towards a fairer social order. A large volume of evidence points towards the understanding that companies, especially investment companies, gain from making diversity and inclusion a primary concern.
Companies with higher racial and ethnic diversity are one third more likely to earn returns above the industry average when compared to similar companies with less diversity. This is not surprising if we consider that different perspectives and experiences lead to more nuanced views of the investment markets and the wider world. Promoting diversity is necessary not only for the betterment of society but for the benefit of shareholders, workers, and clients.