“As an industry we need to be braver and more vocal about the opportunities in our industry for people with different backgrounds and skillsets,” Kirstie MacGillivray, head of multi-asset dealing at Aegon Asset Management stated on the first day of TradeTech Europe in London.
MacGillivray said the diversity question is increasingly being featured in RFPs it receives from prospective clients. “It will become the same as asking how many people you’ve got in your front office. Those demands are only going to increase.”
Nav Khinda, managing director and senior relationship manager at UBS and moderator for the discussion on DE&I at TradeTech said there is a massive correlation between diversity and a company’s underlying performance. Citing data from McKinsey, he said global companies that are more gender diverse typically outperformed less diverse organisations by 25% in underlying profits up from 21% in 2017.
“It is not just an HR question, but about companies outperforming their peers when it comes to their financial performance and profitability,” said Julia Streets, CEO of Streets Consulting and founder of the DiversCity podcast. “If you’re not on the journey already, you need to get on the journey.”
But when asked whether they had made recent changes to their team profile because of internal D&I initiatives, only 23% of audience members answered yes and 35% answered no. Another 45% said not yet, but that it was a priority in their recruitment approach.
The challenge both buy- and sell-side firms face is how do they get there more quickly. “This is going to take a long time,” said MacGillivray. “We need to go into schools and be more vocal about the opportunities for people with different backgrounds and skill sets.”
Adam Conn, head of trading at Baillie Gifford said it had struggled to attract a diverse workforce naturally. “Part of the reason for that is that we’ve been going to the same places to find people.” However, during the pandemic, Conn said virtual interviews had allowed it to tap a more diverse talent pool.
MacGillivray said attracting new and diverse talent to the industry is critical in terms of finding the next generation of innovators who can think about new access to liquidity and new market structures.
“We have five generations working in financial services, which has never happened before,” said Streets. “You’ve got digital natives and generations that have lived through different economic cycles. From that, good ideas can come.”
So how can the buy and the sell side promote greater DE&I? Conn of Baillie Gifford proposed that prospective employees not be interviewed by a panel of white people. “We need to make sure we have diversity up front. It’s also about calling out bad behaviour when people have overstepped the mark.”
Streets said a change needed to occur right through to board level, but that it was a journey not a race. MacGillivray said she hoped in five years there wouldn’t be a panel on DE&I at TradeTech. “It should become part of what we do, embedded from the bottom right up to the top.”
Regulation could force firms to get there a lot sooner. In March, the UK’s Financial Conduct Authority proposed introducing diversity requirements into premium listing rules to drive greater diversity and inclusion in the sector.