This article appears in the Mid-October 2022 issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.
This year’s Investment Executive Report Card series was the first to ask advisors to rate their firms’ diversity, equity and inclusion (DE&I) policies. The results are encouraging.
Brokerage, dealer, retail bank and insurance advisors collectively rated the category 9.1 out of 10. That made DE&I the second-highest performing category out of the 30 assessed this year in the Advisors’ Report Card.
Those same advisors, however, only rated the importance of firms’ DE&I policies at 8.6., among the 10 least important categories to advisors’ day-to-day work. That suggested firms are exceeding advisors’ perceived needs in the area.
That dichotomy is present due in part to mixed opinions about the necessity of such policies. A retail bank advisor in Atlantic Canada said that DE&I is “ingrained in our culture, really,” adding that education regarding inclusivity helps to “weed out our own systemic biases.”
Other respondents felt discussing diversity was unnecessary. For example, a brokerage advisor in Ontario said the goal is to hire “the best person to do the job; their identity or gender doesn’t matter.” Similarly, a dealer advisor in Ontario said, “I don’t care [about DE&I] as long as we have the right people.”
A dealer advisor in Ontario said their firm is “doing as much as anyone can do. [They know that] our staff needs to mirror our community.”
Of the four segments, retail bank advisors and planners rated their DE&I policies highest for performance at 9.4 and highest for importance at 9.1 (in the latter case, by a significant margin).
“The [banks] have their committees for diversity and inclusion, as well as various employee internal networks for employees [sharing] the same background,” said a retail bank advisor in Ontario. “There is a lot of celebration of various cultures; [the bank is] inclusive on various levels.”
“We have to complete courses on this, about inclusion for example,” said another retail bank advisor in Ontario. The advisor said their bank has “women’s initiatives,” offers guidance on how to be allies for people of colour, and provides courses on how to combat bullying in the workplace.
Advisors with dealer firms gave their companies’ DE&I policies the second highest average performance rating, 9.1, and an average importance rating of 8.6. Many also were knowledgeable about their firms’ DE&I efforts.
“We have, once a week, a meeting about diversity and equity, and someone explains their background and culture,” said a dealer advisor in Atlantic Canada. “It’s a way to get acquainted with different cultures’ religious practices. Corporate also tells us how we are performing in different categories of visibility, and we use pronouns in our email signatures.”
But a dealer advisor in Ontario suggested their firm needed to expand its efforts: “They’re a little too focused with solely hiring more women instead [of adding people] across a diverse spectrum.”
Advisors with brokerage firms and insurance agencies each gave their respective corners of the industry an average performance rating of 9.0. For importance, brokerage advisors gave the DE&I category an 8.4, while those with insurance agencies gave an 8.5.
DE&I “is way better than [it was two] years ago,” said a brokerage advisor in Ontario. “We’ve seen a huge policy overhaul.”
“It is improving slowly,” said an insurance advisor in Ontario. “The company tended to hire 20-to 30-year-old white males for many years [and] that culture is changing for the better.”
That same advisor credited senior leadership for taking a stand, but noted the shift toward improved diversity is “a slow process [that] will take a number of years.”
“Like every business today, there are shining examples of incredible diversity and care toward important issues, but there are also examples that don’t shine as brightly,” said another insurance advisor in Ontario. “There are still too many old white guys.”
In particular, “there should be more women,” said another insurance advisor in Ontario, while an insurance respondent in the Prairies noted that “one or two minorities in a group of 100” isn’t sufficient. (For the 2022 Advisors’ Report Card, 22.9% of respondents were women; in the insurance segment, 24.2% of respondents were women).
“I think they’re trying, but you look around, and it’s mostly white males,” echoed a brokerage advisor in Ontario. “It’s hard to tell if it’s working when there’s so many of one demographic.”
Ultimately, advisors painted a picture of an industry working toward a more diverse future.
“I know how hard they work at [DE&I]. The policies are there but implementation is a structural issue across the industry,” said a brokerage advisor in Ontario.
The key to a successful DE&I policy, according to a brokerage advisor in Atlantic Canada, is acknowledging that professionals want to be “with a firm that walks the walk.”