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Only Half of Junior Asian-American Employees Make It to Senior Roles in Asset Management
The relatively high representation of AAPI staff at lower levels may obscure the need for training and support.
While Asian Americans and Pacific Islanders are relatively well-represented in junior-level roles compared to other minority groups, they still face barriers to career advancement in investment management, new research shows.
AAPIs account for 17.2 percent of analyst roles in the asset management industry, higher than all other diverse groups combined (11.4 percent), according to the latest report from the Association of Asian American Investment Managers. But in the most senior-level roles, including partners and managing directors, the representation of AAPIs shrinks to 9.9 percent. That’s an attrition rate of about 50 percent, which is on par with other diverse groups but significantly higher than non-diverse groups, according to the report.
“AAPIs are very visible in the beginning but not so much at the top levels,” said Brenda Chia, board co-chair at AAAIM. “The leap is a difficult one to make. That’s where family comes into play, but that’s also where the big promotions happen.”
The AAAIM report categorizes jobs in the asset management industry into four levels based on their seniority. Analysts are tier four, associates are tier three, and principals and vice presidents are tier two. Partners and managing directors make up tier one. According to the report, AAPIs hold 17.9 percent of tier-three jobs and 14.1 percent of tier-two positions, respectively.
According to Chia, one of the factors leading to AAPIs’ low representation at the top is their high visibility at junior levels. She said this has led many investment firms to ignore the need to establish programs that are dedicated to advancing AAPIs’ careers. “The challenge facing AAPIs is the whole model minority myth [and] less focus among the investment firms to have AAPI programs,” she said.
The attrition rate of AAPI women is slightly better than that of women from other diverse groups. Of positions held by women, AAPI women make up 19.3 percent of tier-4 roles and 14.2 percent of tier-1 roles. For other diverse women, those figures are 14.9 percent and 7.9 percent, respectively. However, that doesn’t mean AAPI women don’t need support to reach the upper levels: According to the report, AAPI women face both a “glass ceiling” and a “bamboo ceiling,” which refer to career bottlenecks for women and the Asian community, respectively.
“On the corporate level, few diversity, equity, and inclusion initiatives acknowledge AAPI workers, so AAPI women who seek DEI opportunities typically find themselves grouped with other women,” according to the report. “But initiatives for women don’t account for the unique experiences of AAPIs, including racialization (stereotyping based on perceived race), and differences in cultural expectation and experience including language and immigration.”
There are a number of ways for asset management firms to advance the careers of AAPI employees. For example, they can reassess how leaders are selected and provide more culturally-informed leadership training. In addition, firms can implement initiatives and networking groups specific to AAPI women.
“Firms will need to see AAPIs as an important diverse community in their own right, and not exclude them from the critical discussion that is predominantly focused on other diverse communities,” the report concluded. “At the same time, AAPI workers can reflect on and reconcile their wide range of cultural expectations and experiences while finding and celebrating commonalities.”