Over the last year, International Adviser has been focused on diversifying the financial services with articles on the LGBTQ+ community and female representation.
Black, Asian, and minority ethnic representation (BAME) is a key area to tackle in the fight for a diverse IFA and wealth sector.
The 2017 McGregor-Smith Review looked at many industries across the UK, and it found 35% of Pakistani, 33% of Indian and 29% of Black Caribbean employees said they feel that they have been overlooked for promotion because of their ethnicity.
Elsewhere, the UK government stated that it plans to pursue further work in addressing the need to overcome pitfalls and barriers, in response to the results from recent ethnicity pay-gap consultations.
Changes are needed and things need to be done, but how does the advice sector improve?
Tali Shlomo, people engagement director at the Chartered Insurance Institute, said to IA: “In order to address and overcome obstacles such as these, we first need to understand our unconscious biases, of which we have, and learn how to mitigate and undo the impact they may have on the judgement we make.
“One useful mechanism to use when beginning to deal with this complex issue is to start collecting data.
“We know as with gender pay gap reporting, that by collating, measuring, and reporting, we start to raise awareness of the challenges and obstacles blocking opportunities for growth and positive change.”
Wealth management firm Henderson Rowe said that it believes “understanding and respecting how other cultures and sub-cultures communicate are paramount to increasing diversity in the financial sector”.
It said that four of its five directors are of ethnic or racial minorities in the UK, as well as its head of research, head of operations, head of compliance, head of finance and office manager.
What are the challenges to increase BAME representation across the sector?
Ana Diaz, head of operations at Henderson Rowe, said: “Despite fast globalisation, communication across cultures remains a challenge.
“A Chinese idiom captures perfectly this challenge, which is usually translated as: ‘It’s like a chicken talking to a duck’.
“If there is an absence of conscious effort to understand and respect other cultures and experiences, cross-cultural miscommunication will remain a meaningful obstacle to diversity in our industry.
“Instead of trying to reduce or eliminate miscommunication – an impossible task – firms should seek to recognise and discuss, in real time, culture-based miscommunication. This recognition alone will mitigate potential damage and better capture the benefits of a multi-cultural organisation.
“In our experience, cross-cultural miscommunication provides opportunities to develop more inclusive perspectives and workplace environments, which is something our industry often lacks. You can’t turn a chicken into a duck – nor should you want to.”
Adam Jacobs-Dean, managing director at the Alternative Investment Management Association (Aima), said to IA there are several policies that the financial services industry can undertake to improve diversity.
- Anti-discrimination, anti-bullying and anti-harassment policies with disciplinary consequences; and
- Adopting a formal diversity and inclusion policy.
They are all steps firms can take to support “BAME employees and encourage applications” from those considering a career in the financial services sector.
Jacobs-Dean added: “Championing, a diverse and inclusive workplace culture is critical, both to hedge funds and to the financial services more broadly.
“Diversity of thought, whether it be from increased BAME representation or from those with alternative approaches to learning, improves decision-making, and in turn has a positive impact on returns.”
This story originally appeared in International Adviser, a Last Word publication.