What are asset managers doing about DEI?

With a lot of heavy lifting left to do to address underrepresentation in financial services, a new report offers a valuable glimpse into how players in the asset management industry is tackling the problem.

Callan, a prominent investment consulting firm, unveiled its 2024 Asset Manager DEI Study, shedding light on how asset management firms help address the representation gap in the financial space.

The inaugural report, which represents insights from more than 1,200 organizations, examines the prevalence of DEI practices within the asset management industry.

Lauren Mathias, senior vice president at Callan’s Global Manager Research group, emphasized the importance of integrating DEI into business frameworks.

"With this study, we're able to gauge how asset management firms are incorporating DEI practices into their core business, which we feel is important to the success and longevity of any firm," Mathias, who’s also the firm’s diversity, equity and belonging champion, said in a statement.

A majority of the firms actively participating in the study, representing 63 percent of respondents, have smaller books of less than $10 billion. Firms managing between $10 billion and $50 billion, and those above $50 billion account for 20 percent and 17 percent, respectively.

Among other key findings, the study found 70 percent of the firms have established formal DEI policies. A nearly equal number (71 percent) are engaged in diverse recruitment initiatives, although regional variations exist, particularly in comparison to the US and UK.

Meanwhile, roughly two-thirds of firms (65 percent) offer DEI training programs, with larger organizations leading the effort as they’re able to devote more resources to the cause. Mentorship programs are in place in 50 percent of the companies surveyed, with underrepresented groups being the heaviest beneficiaries.

However, challenges remain, as only 37 percent of firms have implemented a pay-parity policy.

The DEI score, a proprietary metric ranging from 0 to 3 that Callan uses to measure DEI best practices, showed a median score of 2.03, with larger firms generally scoring higher. "While we've been tracking this type of data in our proprietary database for decades, this study is the baseline in our benchmarking as we analyze trends over time," said Mathias.