Financial Firms Looking to HBCUs, “Pipeline” Programs to Bolster Diversity

Two new programs focus on advancing diversity in the financial management space by working with historically black colleges and students.


Asset management firms and an association representing more than 13,000 alternative investment managers are looking to historically black colleges and universities to build a more diverse pool of applicants and leaders.

Earlier this month, a group of asset managers comprised of Allstate Investments, LGIM America, and William Blair launched a program to increase diversity through a two-year entry-level job placement. Called the Asset Management Diversity Accelerator, it is a recruitment program focused on students graduating from HBCUs, including those with majors that are not usually paths to asset management, the firms said in a press release.

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Shortly thereafter, the Chartered Alternative Investment Analyst Association announced a new education program with the Milken Institute that exposes students from HBCUs to the alternative investment space. This type of program, though starting small, is crucial in creating real-world chances for students from diverse backgrounds to learn about, and ultimately have a chance at obtaining, jobs in alternative investing, says Deborah McLean, Global Head of DEI and President of the CAIA Foundation.

“We simply do not have enough diverse talent in the industry right now,” McLean says of the alternative investment space in the U.S. and globally. “We need to start flooding the pipeline with diverse talent if we’re going to make progress.”

The financial services sector, including retirement plan advising, has struggled to make real progress on DEI efforts to make the workforce more representative of its clients. Of the $70 trillion in global financial assets under management across the investment universe, less than 1% are managed by minority-owned or women-owned firms, according to the SEC’s Asset Management Advisory Committee.

The benefit of DEI is not just about improving the employee demographics. New research from financial services firm AON shows that companies with a clear definition of DEI have a higher level of engagement from employees at 82%, which compares to 65% engagement from companies without a clear DEI strategy.

McLean of CAIA is a strong proponent of the business case for increasing diversity as well as inclusivity and equality within the workplace.

“People are realizing this is not just an HR initiative or a feel-good initiative,” she says. “[They know] this is essential to business strategy.”

CAIA’s kickoff diversity program was a four-day introduction to students from HBCUs such as Howard University and Tuskegee University. The students learned about alternative investment types ranging from private equity to hedge funds to real estate. They also received scholarships from CAIA to pursue its Fundamentals of Alternatives Investment educational program as well as an invitation to attend CAIA events in their areas.

“To create change you have to impact individuals,” McLean says. “You have to be very targeted with a program that is sustainable, impactful, and that can ultimately lead to jobs for these young people.”

The Milken Institute, which is working with the CAIA, has also created an HBCU Fellow program for 16 college sophomores to learn more about finance and have access to professional development and networking. The program opens to applicants at 8 HBCUs in December and will start in 2023.

The Power of Diverse Teams

The challenge of increasing diversity is not just one of attraction, but attrition, says Rosalyn Brown, a retirement strategist who is also the equity, diversity, and inclusion lead for the board of the We Inspire Promote Network. She notes that many people who enter the retirement advisory space may be working on commission to start, and if they don’t have a network of people with wealth, nor the ability to live on relatively low pay, then they may not stick with the job.

“It’s not a career that people want to necessarily stay in,” Brown says. “When we talk about setting people up for success, it has to be a program that takes into account their cultural backgrounds.”

The asset management accelerator program introduced by Allstate, LGIM, and William Blair, is designed for students of HBCUs to enter a two-year rotational program as junior research associates in areas including buy-side equity, fixed income research and portfolio management. Students graduating from December 2022 through May 2023—specifically in fields usually outside of the asset management space, such as English literature and political science—will be given the chance to start employment on June 2023, the Chicago-based companies said.

“The power of diverse teams can’t be overstated,” Stephanie Braming, partner and global head of investment management with William Blair, said in the release. “Human capital is our industry’s biggest asset…That’s why we need the best and the brightest talent to join us. And the best and the brightest span many different backgrounds with many different lived experiences that influence their professional acumen.”

Brown of WIPN notes that it’s crucial to have people of diverse backgrounds in the room with decision-makers so their views and ideas can be heard.

“It is imperative that we have more women in leadership, more people from different backgrounds in leadership, and more teams that serve the entire population of the country,” she says. “You can’t just pull people [who are from different backgrounds] in as you need them. They should always be at the tale to provide different perspectives and be more representative of the people who use our services.”

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