U.S. investment consultants did not significantly increase the diversity of their own workforces and practices in 2021, according to a report about a survey conducted by the Diverse Asset Managers Initiative that was released Tuesday.
In fact, only 15 of the 28 largest U.S. investment consultants responded fully to DAMI's survey, and one firm did not complete the whole survey, the report's authors said.
The survey was conducted in the summer and fall.
The organization's 2021 Annual Investment Consultant Survey reports that the average breakdown of workforce diversity within investment consulting firms in 2021 was 72% white compared with 73% the previous year; Asian American, 12% vs. 10% in 2020; African American, 7% in both years; and Latinx, 7% vs. 6% in 2020. In 2021, DAMI added an "other" category that totaled 2% .
Firm ownership in 2021 among the 16 firms averaged 79% white and 21% non-white vs. 80% and 13%, respectively, the prior year. The average male firm ownership percentage was 68% in 2021 vs. 70% in 2020, while female ownership was 32% in 2021 and 23% the prior year.
One small bright spot in the survey results was that more investment consultants — 11 — have created written policies that require the firm to interview women and ethnic minorities in recruiting, compared with eight firms in 2020.
In comparison to 2020, all 16 investment consultants that completed the DAMI survey now maintain proprietary databases to find and categorize managers compared with 14 the prior year, but "they still struggle to identify diverse managers and diverse-owned firms," the report's authors said.
"There's no question. Efforts to diversify (investment consultants) are moving at a snail's pace. While firms love to profess to their commitment to diversity, they overwhelmingly don't back that up with action," said Robert Raben, founder of DAMI, in a news release Tuesday about the report.
"In addition to the clear hypocrisy, this slow movement is financially irresponsible. A mountain of evidence shows that ignoring diversity hurts performance," Mr. Raben added.
