A quarter of buy-side firms still have no formal diversity policy, finds The TRADE’s first Diversity & Inclusion Survey

The results, taken from a survey of over 100 buy-side, sell-side firms and trading venues, show that while many firms do have a policy in place, there are still significant gaps in benchmarking progress, while most firms have a notable imbalance of gender and ethnic diversity in senior roles.  

The TRADE’s first Diversity & Inclusion Survey, which polled a wide selection of buy-side firms (48%), sell-side firms (39%) and trading venues (12%), has found that while diversity is highly valued across the industry and recognised as a crucial element, there are still a number of gaps – especially within the areas of formal policymaking and benchmarking progress. 

Within the buy-side, 75% of firms have a formal diversity and inclusion policy, while 25% have yet to implement an official framework. This was even more noticeable on the sell-side, where 34% still have no formal policy. Just over half (57%) of buy-side firms benchmark their progress towards their diversity goals, rising to 62% for the sell-side and 67% for trading venues – meaning that around a third of firms overall still do not benchmark their diversity pathway.  

On the buy-side, 70% of firms admitted that fewer than 25% of their senior trading roles were filled by women – with no firms at all able to demonstrate more than 50% of women in senior roles. Most respondents also commented that this proportion had not changed much over the past five years. Again, the split was even more pronounced on the sell-side, where 91% of firms had fewer than 25% of women in senior trading roles. Trading venues came out on top here, with around a third able to claim 25-40% of senior roles filled by women.  

Interestingly, most buy-side firms (60%) thought they were around the industry average when it came to gender diversity, while 27% thought they were below industry average and just 14% thought they were ahead. On the sell-side, however, over half (53%) thought they were below industry average, while 15% thought they were ahead. Trading venues were (perhaps justifiably, given the above data) the most confident, with 50% believing themselves to be around industry average and a third (33%) thinking they’re ahead.  

When it comes to ethic and cultural diversity, the buy-side is more evenly split, with around a third believing themselves to be ahead of the industry, and a third believing themselves to be behind. The sell-side, on the other hand, saw 40% believing they were trailing the average, compared to just 20% ahead; whilst trading venues were again the most confident with 50% believing themselves to be above industry average.  

Progress remains a concern, however. Around a fifth (18%) of buy-side firms believe themselves to be behind schedule when it comes to their own diversity aims, while 40% think they’re on track and just 9% think they are ahead of schedule. Sell-side firms were far less confident, with almost half (47%) seeing themselves as behind schedule, and just 7% thinking they’re on track.  

Much of the written feedback to the survey was reassuring in its support of and commitment to both gender and ethic/cultural diversity, with many firms highlighting the steps being taken to promote progress.  

Although our turnover is low, we’ve taken steps in our recruiting efforts to attract diverse talent,” said one buy-side firm. “This includes nameless resumes, using diversity-based recruiting groups, and an initiative to attract more women to finance roles. In the last five years, 60% of our new hires are now women and minority.” 

However, there remains some divergence of perspective, with others highlighting their own concerns.  

“[The] hiring of women and the actual desire to do so is lacking. There continues to be a perception of not enough women being available, lower quality or ‘no cultural fit’”, said one buy-side comment. 

“If you learn it, earn it, and [if] you’re better than everyone else, you will get the position (regardless of you race, gender or ethnic background),” noted a sell-side response, while another suggested that there is “too forced of an approach to fill senior positions only by women”.  

Overall, the consensus was that while progress has been made, there remains a long way to go. And of course, while gender and ethnic/cultural diversity is important, there are many other elements to diversity that could and should be considered. For now, however: the conversation continues.  

We want to be asking the right questions. As part of our plans for an annual Diversity & Inclusion initiative, please send any feedback or suggestions to laurie.mcaughtry@thetradenews.com to help us shape next year’s survey.