The U.K. investment industry has a younger workforce than may be expected, but shows an underrepresentation of women and little ethnic diversity, a new report shows.
The Investment Association and Willis Towers Watson's Thinking Ahead Institute published on Nov. 16 a report on DEI data in the U.K. investment management industry, which they hope will act as a benchmark against which investment managers can measure diversity, equity and inclusion efforts.
The data shows that 96% of firms collect diversity data on at least two attributes, with age, gender and ethnicity as the attributes with the highest response rates from employees. While firms are beginning to collect information on neurodiversity and socioeconomic backgrounds, response rates are low, the report said.
A snapshot of the investment management industry against six key demographic attributes — age, disability, ethnicity, gender, religion/belief and sexual orientation — "reveals a relatively young workforce and, despite inroads made in recent years, a largely male workforce with little ethnic diversity," the report said.
The report said 32% of the industry's workforce is between 18 and 34 years old, compared to 34% of the U.K.'s working population; while 63% of employees are between 35 and 64, compared with 62% of the overall U.K. workforce. Just 1% of the investment industry's workers are over age 65 vs. 4% of the U.K.'s working population.
"This suggests a relatively younger composition of the investment management workforce, which diverges from historical perceptions of an industry with an older employee demographic," the report said.
Despite work on finding the gender balance, "the industry continues to be largely male," at 55% vs. 37% female. The remaining 6% of workers did not disclose their gender or preferred not to say.
When it comes to ethnic diversity, 61% of U.K. investment management professionals are white, compared with 10% who are Asian/Asian British, and just 2% who are Black/African Caribbean/Black British. A further 2% are of mixed/multiple ethnic groups and 1% were of other ethnic groups including Arab, the report said. A total of 24% of workers did not disclose their ethnicity or preferred not to say.
The report compared the industry's ethnic diversity to that of London's population, since the majority (83%) of respondents have their U.K. headquarters there. The white population of London totals 54%, while London's Asian population represents 21% and the share of Black Londoners is 14%.
Further, the proportion of employees who are not disclosing their ethnicity in data collection exercises "suggest this is not concentrated to a few firms. It is unclear as to whether those not disclosing are concentrated within certain demographics, but it does highlight the importance of bringing all employees along on the journey towards more diverse workforces," the report, said.
The majority of firms said they collect diversity data to better understand the makeup of the workforce (65%), to foster an inclusive corporate culture (60%), and are using data to better inform DEI initiatives and interventions (48%).
In terms of future focuses for data collection, 33% of firms said they have plans to collect information on socioeconomic backgrounds of workers, caring responsibilities and neurodiversity.
"It's crucial that the investment management industry reflects the people that we serve and the society we operate in," said Karis Stander, director of culture, talent and inclusion at the IA, in a news release accompanying the report. "Creating a culture of diversity presents a clear business case, and organizations with an inclusive workforce offer better returns, drive innovation, retain talent and ultimately provide a better service to our clients."
Marisa Hall, head of the TAI, added: "Unlocking industry progress in equity, diversity and inclusion means measuring more than we currently do. But transformational change requires more than just data measurement — it involves deeper thinking on issues necessary to build a sound infrastructure for equity, diversity and inclusion plans."
Hall said the study by the IA and TAI "serves as a gateway to change, being the first-ever unveiling of U.K.-specific EDI statistics, and I hope it establishes the pulse monitor for progress in the U.K. investment industry."
The data, as of Dec. 31, covers 52 U.K. investment and fund management firms, collectively representing 75% of total U.K. assets under management and employing 78% of the about 46,200 people directly employed by the investment management industry in the U.K. IA member firms ran about £8.8 trillion ($10.6 trillion) as of Dec. 31.
