With public awareness of anti-Black systemic racism seemingly at an all-time high, many people hope the investment industry is on its way to becoming more racially diverse.
The killings of Ahmaud Arbery, Breonna Taylor and George Floyd earlier this year sparked Black Lives Matter protests around the globe. Business leaders — including hundreds in Canada — now promise to appoint more Black people to senior leadership roles.
The urgency for change has spread to the investment industry as well — but boosting diversity will take more than simply updating companies’ hiring policies, says Dennis Mitchell, CEO and chief investment officer with Toronto-based Starlight Investments Capital LP.
“As the world is beginning to see, Black people and other visible minorities are being steered away from these types of careers as early as kindergarten,” Mitchell says.
Mitchell cites a scathing February 2020 review of Ontario’s Peel District School Board that revealed Black students and students of other racial backgrounds were being systematically dissuaded from taking university-track courses in high school. He notes that Black people are often “weeded out” of careers in finance years before they enter the workforce.
“You have a situation where the pool of people who are progressing to these careers doesn’t represent the communities they purport to serve,” Mitchell says.
Financial services firms may have the best of intentions for hiring a diverse workforce, but, Mitchell notes, the pervasiveness of systemic racism in the school system poses challenges that can’t be overcome by hiring policies alone.
“The refrain is always ‘We recruit from the best schools,’ but the students being sent to those schools are not representative of the population as a whole in this country,” Mitchell says.
The problem isn’t unique to Peel. A 2017 report authored by Carl James, a professor in York University’s faculty of education and York’s affirmative action, equity and inclusivity officer, noted that only 53% of Black high-school students in the Toronto District School Board jurisdiction were enrolled in “academic” (i.e., university-track) courses — compared with 81% of white students and 80% of students of other racial backgrounds.
In July, the Ontario government announced its plan to end the controversial practice of “streaming” — which funnels students into academic and “applied” (i.e., college- and workplace-track) courses — by September 2021 in an effort to combat systemic racism. But ending streaming won’t necessarily end racism in schools, James says.
“It’s a first step, but there are a lot of other things that are required if you’re really going to address the issue of anti-Black systemic racism,” James says. “You might end streaming ‘officially,’ but it appears in other guises.”
One of those guises is what James refers to as “the racism of low expectations.” His research has shown that teachers in Toronto routinely expect Black students to perform poorly and are often suspicious when Black students do well in class.
“After streaming has ended, will I go to classes and see Black students proportionally represented in the academic programs destined for university?” James asks. “Are we going to see them in the ‘gifted’ programs?”
In addition to creating an unlevel playing field in the school system, systemic racism causes economic disadvantages for Black people living in Canada.
Data from the 2016 census revealed that 23% of Black people in Canada were low-income earners, compared with 12% of white people. Black people were also more likely to be unemployed — 12.5%, compared with 7.7% of white people.
Jackie Porter, partner and financial planner at Mississauga, Ont.-based Carte Wealth Management Inc., says a “wholehearted effort” must be made to introduce financial literacy programs to all communities, including low-income neighbourhoods.
Porter has run after-school financial programs for kids in middle school who live in at-risk communities. Those eight-week programs introduced students to money-management concepts.
“I’ve done a lot of financial literacy programs for young kids, and I see the level of excitement they have when we talk about money, goals and visions for the future,” Porter says. “Not too many people are having these types of conversations with them.”
Porter says she didn’t discover financial planning until adulthood. The concept of having money work for her was “revolutionary,” she says. “I was very grateful to have that first money conversation with a woman of colour. Just seeing someone who looked like me who was in finance was something that gave me a lot of encouragement.”
Those hoping for change in the investment industry may be encouraged by the Black Lives Matter movement — although what lasting effects the movement will have remains to be seen.
In April 1992, when four Los Angeles police officers were acquitted after brutally assaulting Rodney King, there were riots in the streets. More than a quarter-century later, little has changed: people are still protesting police brutality against the Black community.
Will things be any different this time around? “The proof will be in the pudding a year or two from now,” says Colin Lynch, vice president and director, global real estate investments, with Toronto-based TD Asset Management Inc. “I’m a hopeful person, so I hope that this time is actually different. What will make it different is sustained action across society.”
Movements such as Black Lives Matter, Lynch notes, tend to “rise and then fade from public consciousness” over time. Lynch says he’s encouraged by business leaders in Canada promising to address anti-Black systemic racism, but “actions speak louder than words.”
“At the end of the day, creating positive change such as trying to eliminate systemic racism is a marathon; it’s not a sprint,” Lynch says. “All of us in society, including those in the investment industry, should be aware of these issues next year and the year after — and not necessarily presume that the focus today solves the issue.”
Mitchell says the current climate is more conducive to change than 1992’s was. Social media, for example, has brought the shared experience of Black people to everyone’s attention.
“I think 28 years ago, the world wasn’t ready,” Mitchell says. “I don’t think there was a critical mass of people outside of the Black community who understood the issues that we deal with on a daily basis and were ready to accept that those things must change.”
The widely circulated videos of police officers killing George Floyd may have driven that point home for people who hadn’t been aware of systemic racism, Porter says: “Maybe years ago, a lot of people who weren’t brown or Black who watched the Rodney King riots didn’t really understand the anger, because they didn’t see this man’s humanity literally being taken from him in front of their eyes.”
Mitchell says he believes there’s now “enough of an awakening on Bay Street” for people in the investment industry to understand the need for change.
But that change won’t happen overnight.
“You can’t just say, ‘I’m going to hire five random Black people and 10 random Indigenous people, and presto — I’ll have a diverse workforce,’” Mitchell says. “You have to make the long-term commitment to sourcing those people in their communities, bringing them into your organizations, inculcating them into your culture and having them naturally progress.”