Bank of America is diving into diversity more deeply than ever before by requiring the asset managers who offer 3,000 investment strategies available to wealthy clients to provide employment diversity numbers down to the individual team level.
The initiative targets those who provide asset management services to clients of Merrill Lynch and Bank of America Private Wealth Management.
According to Anna Snider, head of due diligence for Merrill and Bank of America Private Bank, the bank defines as “diverse” any asset management firm where 51% of ownership is female or a member of a racial minority, or any asset management team where 51% of the members are female or a member of a racial minority, which is higher than the industry standard of 25%.
Bank of America started making data requests from asset managers in April and is about 40% of the way through, Snider said. It expects to finish the fact-gathering process by April 2021. The bank plans to make the data-gathering process an annual one.
“At the end of year one we will have a good sense of where managers and investment teams are stacked in the range of best in class practices in the industry and inclusion, and where we see people who have to do a lot more work on how they advance in those things,” Snider said.
Bank of America itself recently released data on the racial and gender makeup of its Merrill Lynch Wealth Management workforce, revealing that Black wealth managers now make up 4.5% of the advisor population, up from 2.5%; Hispanic or Latino advisors make up 9%, up from 6%; and female wealth managers represent 21% of advisors, up from 18%.
Snider said that while the asset management industry has been talking up diversity programs for a long time, it has not yet made enough of a dent in the problem.
“There have been emerging manager programs for years, but we haven’t seen the needle move for progress in the industry yet,” Snider said.
“This is meant not to be punitive, especially out of the gate,” she said. “It’s meant to say to asset managers, ‘This is really important to us. It makes a difference.’ We will relay to managers where we think they pan out in terms of other competitors in the industry and what we would like to see them focus on.”