NASP supports equitable participation and equal opportunity in all business dealings. As part of NASP’s objectives to foster the growth and development of minorities and women; of minority-controlled and women-controlled institutions in the securities industry and to pursue progressive and balanced policies affecting public and private finance, NASP has an active legislative agenda.
NASP hosts its Annual Legislative Symposium in September in Washington, D.C. Key financial oversight representatives and decision-makers from congressional committees, federal and regulatory agencies and quasi-public private sector entities participate in this event. Among others, past speakers include Timothy Massad, Former Assistant Secretary for Financial Stability, U.S. Department of the Treasury; Michael Strautmanis, Deputy Assistant to the President and Counselor for Strategic Engagement to Senior Advisor Valerie Jarrett, The White House; Roel Campos, Commissioner, The U.S. Securities and Exchange; Congresswoman Maxine Waters; Congressman Gregory Meeks; Sandra Thompson, Deputy Director, Division of Housing Mission and Goals, FHFA; Don Graves, Deputy Assistant Secretary, U.S. Department of the Treasury; and Timothy D. Hauser, Associate Solicitor, Division of Plan Benefits Security, US Department of Labor.
An essential component of the organization’s efforts is to serve as the voice for its members at the federal, state and local levels of government to advance its mission of diversity and inclusion. There are substantial resources – over $70 trillion – that are under the control of governments, endowments, companies and other institutions that are managed by third party investment professionals. While minority and women owned asset management firms make up 8.6% of this sector, they only manage 1.1% of all assets under management. The decision making around how these assets are managed has far reaching impact across the economy related to job creation, growth, wealth building and too few minority and women owned firms have a seat at the table in this process despite strong track records of proven success.
What can be done to address this gap and increase opportunities for diverse securities professionals?
• More focus on recruitment/selection process by government agencies and large institutions to diversify their asset managers. There is a clear need for more intentionality in the efforts to identify, engage and collaborate with diverse managers. Greater outreach to minority and women owned firms; use of the “Rooney rule” in the selection process of asset managers (must interview at least one diverse firm); and directing federal regulators and retirement systems to be aggressive in engaging diverse asset managers.
• Refine minimum qualification statements and relevant terminology. Often large institutions, especially government bodies, have investment policy statements that have the practical effect of excluding diverse firms from competing to manage these assets. According to GAO, the minimum size requirements for assets under management could potentially exclude smaller minority and women owned firms. Similarly, there needs to be greater clarity on the definition of “diverse” so that large institutions and government entities have a consistent, working understanding of which firms they should consider. While there can be some variance across entities as to what constitutes sufficient minority ownership levels for these firms, it must be a priority to adopt some recognized standard by these decision makers.
• Include professional services in “supplier” diversity data collection. Tracking the use of vendors and suppliers in government, large companies, endowments, and universities is a best practice to monitor progress (or lack thereof) in the number of diverse suppliers across a range of functions (physical plant needs, security, food services, advertising, office supplies, etc.). However, asset managers and other professional services may not always be included among this type of survey for various reasons. Tracking professional services by large entities will help maintain a focus on whether diverse asset managers are being included in these important decisions about how organizational resources are being directed.
• Urge federal and state regulators to diversify their advisory panels. The Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Securities and Exchange Commission, the Commodities Futures Trading Commission and many other federal regulators have industry professionals and other experts serve on formal advisory committees that focus on various policy and regulatory priorities for these agencies. These advisory committees not only perform important roles for the regulators, but they afford their members unique insight into the workings of these agencies and perhaps more notably, give select thought leaders a seat at the table. These advisory committees are woefully lacking with few people of color on them and need to intentionally recruit more diverse participants.
NASP played a leadership role in crafting the provision in the Dodd Frank law that created Offices of Minority and Women Inclusion in the banking regulators. This was an important step to create some institutional structure in government agencies that work with the financial services sector, but more needs to be done to achieve the intended results of greater diversity and inclusion. The House Financial Services Committee in 2019 created the first Congressional Subcommittee on Diversity and Inclusion that has focused attention on these issues and demonstrated bipartisan recognition of the need to do more in the industry.
will take place VIRTUALLY September 22 – 24, 2021!
Please click here to see our 2020 VIRTUAL Conference Program Guide