Investment world's male domination bad for diversity
Male, white and private school educated. It's the image Australia's investment management industry can't seem to shake, and some experts say it may be causing some companies to overlook opportunities.
Male, white and private school educated. It's the image Australia's investment management industry can't seem to shake, and some experts say it may be causing some companies to overlook opportunities.
Three quarters (76 per cent) of people who work in investment management are male and almost half (48 per cent) are private school educated, according to research from consulting firm Mercer.
The research suggests the imbalance has roots in university where female finance students are almost 50 per cent less likely than their male counterparts to consider a career in investment management.
Australia's finance sector is struggling to shake the white, male, old school tie stereotype.
Divya Gordon, 26, a former business student with a sub-major in finance at Sydney’s University of Technology, said she chose a different career path because there was a lack of support and a lack of female industry leaders on campus.
"The people I was around at university were mostly male and all they seemed to be interested in was making money," she said. "I never felt like my values and vision for the future fit in."
"After university I saw a female investment manager talk at an event and the experience stuck with me. It was something about the way she spoke and carried herself which was inspiring. She didn't look like the typical investment manager."
The Mercer study was co-developed with 15 asset owners and managers and was based on a survey, focus groups and interviews with 339 investment managers, 743 employees from neighbouring functions and 1,119 university students.
Mercer, in collaboration with partners across the financial services industry including some of Australia's largest superannuation funds and asset managers, hopes to reverse the imbalance by launching an initiative to attract a diversity of talent.
The centrepiece of the project is a website that aims to help students from a range of backgrounds to understand how to start their investing careers, gain exposure to the industry, and affect change through investment management.
Students will also gain access to internships, industry mentoring and graduate programs through project partners.
Yolanda Beattie, Mercer's learning and inclusion practice leader, says industry leaders were starting to recognise their ability to build high-performing teams by attracting and valuing diverse talent.
"When Mercer started looking into this issue in 2016, chief executives would lament to me how hard it was to attract a diverse candidate slate for investing roles, particularly with respect to women," Beattie says. "This initiative aims to change that status quo by taking the long view and building our future talent pipeline from the ground up."
Because women are the largest underrepresented cohort in the industry, Mercer's efforts will initially focus on attracting females to the industry, before reaching out to students from different cultural, socioeconomic and educational backgrounds. Diversity of thought is the endgame.
Mercer's research revealed that women are 30 per cent less likely to be promoted and are up to 50 per cent more likely to leave the industry than men.
In contrast, Anglo-Celtic male workers are benefiting from a nurturing environment throughout their careers, with 77 per cent saying they feel their manager supports their ambitions, compared to 59 per cent of female investment managers.
Still, there is evidence some advances are occurring. Last week, Shemara Wikramanayake, the daughter of a Sri Lankan migrant, made history by becoming the first-ever female CEO of investment powerhouse Macquarie Group.
Super fund members and investors also have a role to play in supporting women, Beattie says, by making diversity a priority in their investment decisions.
"Investment management is often about problem-solving and white men who did a master of finance at Sydney University are not the source of all knowledge," she says.
"As an active investor you should be asking your leaders about what they're doing to ensure that diversity is brought to the table."
Global asset managers say the initiative deserves support.
"We believe that diversity of experiences, backgrounds and ways of thinking will give us a more nuanced understanding and identification of investment opportunities, disruptive threats, and the inherent strengths of the companies we intend to invest in,” says Gerald Stack, head of investment, Magellan.
Pendal chief executive Richard Brandweiner says the project, and more diverse investment teams more broadly, would help society regain a sense of the "underlying purpose of finance".
"This will be critical in regaining the trust of our community and realising the potential of 'universal ownership'," he says.
Mercer has set a three-year time frame to roll out the program to universities across the country and bring on more funding partners.
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Emma Rapaport is a reporter for Morningstar Australia
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