Inclusion & Diversity in Finance

Inclusion & diversity (I&D) is critical to the future of the investment management industry. An inclusive environment ensures equitable access to resources and opportunities for all. An inclusive culture that leverages diverse views will be an important element in determining a firm's success. 

A rapidly evolving finance industry demands new capabilities and a more diverse workforce and inclusive workplace cultures. According to CFA Institute's own definition of I&D, diversity is the spectrum of human attributes, perspectives, identities, and backgrounds while inclusion is a dynamic state of operating in which any individual or group can be and feel respected, valued, safe, and fully engaged. Each of these factors must be deliberately encouraged and leveraged to develop a successful, diverse, and inclusive environment. According to a recent PwC Global survey, 85 percent of financial services CEOs polled said promoting inclusion and diversity helps enhance business performance. Other research also supports the business case for inclusive cultures that lead to increased profitability, creativity, and innovation. Indeed, a 2019 McKinsey & Co. study revealed top-quartile companies for racial and ethnic inclusion outperformed those in the fourth quartile by 36% in profitability.

Diversity in Asset Management

The discussion around motivations for pursuing diversity in investment management often revolves around two main areas: "the business case for diversity" (i.e., with more diverse perspectives, business outcomes will improve) and "because it is the right thing to do.” Overall, asset management firms tend to be in a reactive phase of diversity and inclusion, meaning that actions are taken primarily to comply with local laws and social pressure.

CFA Institute Recruits Industry Partners to Drive Inclusion & Diversity in Asset Management

CFA Institute seeks to drive I&D efforts in the investment management industry toward more progressive policies and to demonstrate best practice to create more inclusive investment profession. Through the CFA Institute-led Experimental Partners Program, more than 40 participating firms (representing $17 trillion in assets under management) are committed to incorporating more diverse perspectives into how they run their businesses, and into investment decision making to improve investor outcomes. They are also encouraging the industry to embrace different viewpoints.

A key area of focus is on managing biases, including in hiring and advancement. The impact of the coronavirus pandemic has shown that those firms that have stressed inclusive leadership, built trust through leveraging Employee Resource Groups, and supported regular unconscious bias training for managers adapted more quickly to widely adopted work-from-home arrangements.

• Accelerating Change: Diversity, Equity, and Inclusion in Investment Management

  This CFA Institute 2021 report captures the vast array of data collected throughout the Experimental Partners Program. It records the seismic shift from diversity, equity, and inclusion (DEI) leadership being centered in HR to ownership by business heads, supported by increasingly expert DEI leads.

• Driving Change: Diversity & Inclusion in Investment Management

  This CFA Institute 2018 report on the state of inclusion & diversity in the investment management industry, including survey data and conclusions on where the industry needs to get and how to get there.

• Twenty Actions to Promote Inclusion in the Investment Industry

  Stemming from the inception of the Experimental Partners Program, collaborators identified 20 key concepts of inclusion & diversity and made recommendations for actions that asset management firms can take to improve in each area.

• Why Diversity Is More Critical Than Ever

  Machel Allen, CFA, discusses the ever-growing importance of inclusion & diversity in the midst of the COVID-19 crisis.