Data suggest that for every female investment team hire, money managers recruit two men, according to consultant Redington.
The firm said the data — part of its annual Sustainable Investment Survey of 122 managers, representing £37.7 trillion ($43.8 trillion) in assets under management — comes despite 97% of respondents believing diverse teams improve investment strategy outcomes.
The analysis suggests that male domination within money management firms shows no sign of abating for years to come, the consultant said in a news release.
The average investment team is currently split 78% male and 22% female. Further, 62% of investment teams are three-quarters or more male. Only 5% of investment teams consist of more than 40% women, Redington added.
"The common reason cited for the uneven gender split in the financial industry is the challenge of retention; however, this isn't reflected in our survey results," said Sarah Miller, vice president, manager research, in the news release. The survey results indicate that "the pace of change to address the balance remains glacial, and we're still a long way from societal or even broader industry levels of representation."
Gender diversity is not the only area that requires improvement, Redington said. Fifty-eight percent of respondents said they consider their investment teams to reflect the regional demographics of where they are based. However, a smaller proportion of managers disclosed investment team ethnicity data this year — 32% vs. 39% in 2021. The representation of Black investment professionals continues to be "notably low," the release said, at 2% on average. Asian and mixed groups representation was 23% and 4%, respectively. Comparative figures for 2021 were not available.
"These statistics uncover the uncomfortable truth as to how underrepresented some minority groups continue to be in our industry. Diversity is not just about recruiting individuals to meet a quota, it is about seeking out candidates who will bring valuable new perspectives to the table, thanks to their different backgrounds, skill sets and experiences," Ms. Miller added.
Finally, Redington looked at how managers are considering diversity as part of the investment process. Overall, 54% consider diversity as part of the due diligence process, with 80% of those firms looking at gender.
Ethnicity is considered by more than 50% of managers, while 43% look at professionalism, 36% consider age, 33% look at education, 31% consider cognitive diversity, and 19% each consider religion and sexuality.
However, only 8% of strategies that engage on diversity actually integrate and report on related key performance indicators.
Looking ahead, Redington wants to see a closer link between senior leadership remuneration and diversity performance. In this survey, 61% of managers have firmwide diversity targets, but 40% have key performance indicators linked to senior leadership remuneration.
"Managers have signed up to the initiatives and designed the processes, but incentivization is arguably now the quickest win when it comes to driving meaningful change," Ms. Miller added.
Redington also added that there are opportunities for future progress.
"We cannot expect managers to transform their teams and processes overnight, but it is critical that firms step up their game when it comes to diversity," Ms. Miller said. True change will only be achieved by "replacing box-ticking with honest conversations, actionable policies and collaboration," she said.
