In the Investment Association’s Annual Survey 2019, released this month, CEO Chris Cummings identified four themes for the industry in his foreword.
Firstly, the importance of the industry retaining its “international competitiveness” particularly as we are on the brink of exiting the European Union.
Secondly, the “urgent theme” of moving towards more responsible and sustainable investing, as echoed in RiF’s Responsible Investment Review and thirdly, the challenge of encouraging individuals who are living longer than ever to save more for retirement and making sure the “investment engine” is ready to deliver for those outcomes.
Finally, Cummings highlights we are in the “most significant period of change” and with “an unprecedented focus on competitiveness” as well as “transparency of products and services” must come the reassurance the industry’s culture is in line with the “growing responsibilities and public scrutiny”.
Taking the above into consideration, one over-arching theme that leapt out was the fact the industry needs more diversity and it needs it more than ever.
Reflecting back on the above themes, the City needs to be able to retain the talent it has attracted from all over the globe in a post-Brexit world. It also needs to make sure it is responsible in its investing and ensuring equal opportunities for all, while providing the companies that are willing to be diverse and responsible the investment they need to expand their businesses further.
Innovation is certainly required to tackle the retirement challenge and we know that moving away from the group think mentality and encouraging ideas from all sorts of backgrounds (personal, professional, social…) will mean every avenue is explored to ensure we are product-ready for an aging population.
Lastly, the fact that Cummings refers to “the critical area of ensuring great diversity and inclusion” when he makes the point on the “question of culture” emphasises the industry body agrees.
There are only five more specific references to diversity in the report, but many more points highlight where investment professionals are encouraged to think outside the box (NB there is no encouragement to simply box-tick!).
Indeed, an individual at one of 66 IA member firms that participated in the Annual Survey said: “Asset management is no longer just about running the money and talking to investors. It requires huge investment in technology and a different way of thinking, including making the world a better place. You’re going to need different skill sets and different types of people that we never thought of hiring before.”
With initiatives such as Investment20/20 and some asset managers reassessing their recruitment practises, as well as their ability to retain and promote talent already honed in their firms, the industry is making solid moves in the right direction.
Let’s hope that asset managers take into account what is at stake if they do not address and fully embrace increased diversity in their agendas and approach so that the industry really can emerge, in Cummings’ words, “ready for this new environment”.
Research in Finance will be carrying out a study on diversity in asset management including looking how cultures within firms need to change in 2020. For more information to be involved, please get in touch.