Financial Services Ireland


Addressing the diversity and inclusion imbalance

Read more

As an industry, asset management has historically been dominated by men and to a large extent, this unfortunately remains as the status quo. However, it is encouraging to see that there is an appreciation that companies do better when there is diversity of thought.

Stakeholders in the industry from investment managers to investors alike increasingly recognise the role that diversity can play in combatting groupthink – creating better decisions and thus better investment outcomes. Some of the key players such as Vanguard Group, Inc., State Street Global Advisors and BlackRock Inc. have taken bold moves to bring greater attention to the lack of diversity on boards and in senior management positions. And more recently, Goldman Sachs has announced that starting from 1 July in the US and Europe it will not take a company public unless there is at least one diverse board candidate with a focus on women.

While a lot is being done to increase awareness of the importance of diversity of perspective in the wider business arena, investment managers themselves face challenges when it comes to attracting and retaining a diverse workforce. To understand the challenges firms face we must first acknowledge the barriers to greater diversity and inclusivity. These start with the talent pool from which asset managers recruit: largely investment banks or graduates with STEM degrees. Investment banks too struggle with trying to attain diversity, so recruiting from them is unlikely to lead to better results and as for STEM degrees the take up of these by female students still remains low.


The challenges and barriers can be overcome, and much is being done in the industry to achieve this. In November 2019, the Alternative Investment Management Association (AIMA), supported by EY, published a paper outlining 45 practical steps that can be taken by asset managers to improve their diversity and inclusion.

These include:

  • the creation of neutral job descriptions;
  • training interviewers on how to avoid unconscious bias;
  • holding meetings between leaders and staff on inclusion;
  • conducting regular, anonymous surveys on the issue;
  • adopting formal diversity and inclusion policies, securing internal buy-in for these, and examining the diversity practices of the companies in which they invest.

Akin to the bold moves made by institutional investors in recent years to put pressure on boards to increase their diversity, we are now seeing managers look to tackle the lack of diversity within their own industry head-on. Man Group has become the second fund manager after Schroders to come to an agreement with its banks that it will pay lower borrowing costs if it meets certain social and charitable targets which include increasing the number of women in senior positions and pay more if it does not.

In Ireland, there are several initiatives with a specific focus on increasing female leadership in the financial services industry. These include 100 Women in Finance which launched its Irish chapter in 2017, Triple FS – Females Fast Forward in Financial Services which offers a unique cross-organisation mentorship programme and Women in ETFs. These initiatives and active involvement of asset managers with such initiatives can help to attract, develop and retain female talent.

Achieving greater levels of diversity is a critical part of the equation as asset managers look to successfully navigate the disruptive trends and challenges that are transforming the way they do business. Diversity is no longer “a nice to have” and has now become a business imperative as investors, regulators and other stakeholders expect this of asset managers. And this is a good thing as it pushes the industry to do more and at a faster pace. What is key to turning this around and making it a success is for all participants in the industry to embrace this change and openly commit to moving it from an ambition to a reality.

This article is part of EY’s Outlook for Asset Management in 2020 – explore the full publication. 

Ailbhe MacManus

FS Partner, Wealth and Asset Management
Ailbhe's Full Profile