Consultants Want to Improve Diversity. Why Are Their Efforts Stagnating?

New data show that despite equity and inclusion promises by consultants, the number of female and minority owners and senior leaders is barely moving.

Illustration by II

Illustration by II

When it comes to diversity, investment consulting firms may have their hearts in the right place, but their hiring practices still need more work.

The Diverse Asset Managers Initiative (DAMI) asked 28 investment consulting firms for diversity data. Sixteen of those responded with information on their employee demographics, hiring practices, internal policies, and diverse investment manager programs. The data revealed stagnation when it comes to increasing the diversity of employees at many firms, nearly two years after the murder of George Floyd by a Minneapolis police officer prompted industry-wide calls for improvement.

“I see real emotional movement among leaders in the industry trying to get this right. The problem is that there’s not a lot of movement. We’ve got static numbers around ownership,” said Robert Raben, DAMI founder. What’s more, “We’ve got an odd decrease in minority senior management,” he said.

The consultants that responded to the survey included Agility, AndCo Consulting, Callan, Cambridge Associates, Captrust, Crewcial Partners, Commonfund, Marquette Associates, Meketa Investment Group, NEPC, RVK, Segal Marco Advisors, StepStone Group, Verus Advisory, Wilshire Associates, and Willis Towers Watson. WTW provided a partial response, according to the survey.

As for the 12 that didn’t respond to the survey? “It’s head-scratching why a modern firm just won’t even engage,” Raben said.

On average, for the firms that did respond, 79 percent of firm ownership is white and 68 percent is male. Senior management, meanwhile, is on average 89 percent white and 76 percent male. This, according to the report, is a year-over-year decrease.


According to Raben, the data doesn’t explain the reasons behind the decrease. However, he surmised that, as in the investment management industry, people of color may have left for smaller minority-owned firms, or to start their own organizations.

The data showed that on average, research staffs are only about 27 percent female and 26 percent non-white. According to the report, this contributes to a bias in the research. Junior consultants, meanwhile, are 23 percent non-white and 37 percent female, on average.

Firms are increasing their efforts to hire people of color and women — 11 now have written policies to interview both groups, up from eight in 2020. “There’s a handful of firms that are making a real difference,” Raben said. “Crewcial Partners is the only firm that has made a business of curating people of color. Their numbers show it.”

The report showed that Crewcial’s team makeup is 35 percent white, 33 percent Black/African American, 14 percent Asian, Hawaiian, and Pacific Islander, and 18 percent Latino. Although all of the firm’s senior consultants are white, 100 percent of its junior consultants are non-white.

This is an improvement since DAMI’s last survey. In December 2020, 26 percent of Crewcial’s employees were Black, 12 percent were Asian, Hawaiian, or Pacific Islander, 16 percent were Latino or Hispanic, 1 percent were Indigenous, and 45 percent were white.

NEPC, meanwhile, reported that 76 percent of its entire staff is white. However, Raben noted that this is an improvement year-over-year. “NEPC is probably a standout in terms of steady improvement, because they believe it’s important,” he said.

On the investment side of the business, eight of the consultants have dedicated emerging manager programs, while every single one of the respondents have databases identifying emerging manager programs.

There is, however, a problem with these programs, according to Raben. When firms that are considered “emerging managers” reach a certain threshold of assets under management — usually $2 billion — they’re no longer considered “emerging” and are often no longer sought out as a diverse-owned firm.

“That goes to a larger issue, which is that a lot of allocators and firms stop caring about diversity when it goes beyond emerging,” Raben said. “Most white people think we have a supply problem of people of color. In fact, we have a demand problem.”