For years, diversity and inclusion were viewed as internal workforce matters, issues for HR teams not advisory firms. But, this separation no longer applies as diiversity has become more central to governance and become inseparable from risk management, client trust and regulatory expectations.
One of the clearest markers of that shift came from an unexpected source. During an OECD event on pension investing in 2020, a senior Trump administration representative drew a direct line between workforce diversity, ESG outcomes and fiduciary responsibility. Regardless of political viewpoint, it was a watershed moment. Inclusion stopped being framed as a social preference and was recognised as a performance variable.
For many years, diversity sat outside the adviser remit – although ESG, stewardship and Consumer Duty obligations have steadily expanded. As a result, advisory firms are now expected to demonstrate their own internal governance aligns with standards they ask clients to uphold. And culture, representation and inclusion sit firmly inside that expectation.
When investors, regulators and trustees began requesting workforce data as part of ESG reporting, diversity more into the world of accountability and oversight. It now sits alongside pay equity, leadership transparency, climate risk, wellbeing and conduct culture as part of what defines organisational quality.
The evidence for this shift is strong. McKinsey has repeatedly shown that organisations in the top quartile for gender and ethnic diversity outperform on profitability. At mallowstreet, our own research and conversations with schemes, advisers and asset managers show the same pattern. Culture is not a soft indicator. It is a
performance predictor.
For an adviser, diversity has two direct implications. It affects firm governance. A more diverse workforce brings broader perspectives to risk assessment, client interaction, product design and communication. It reduces blind spots in suitability discussions and improves how firms understand the lived experiences of member groups they serve. But is also affects client outcomes. Consumer Duty has cemented the expectation that advice must be tailored, accessible and fair. Understanding different demographic experiences demonstrates that recommendations support good outcomes for every type of customer.
Trustee boards and investment committees are increasingly viewing diversity as an element of risk management and oversight. Advisers are part of this ecosystem. Trustees are beginning to ask more searching questions about the culture of the firms advising them. This creates a strategic opportunity for advisory firms to demonstrate leadership. Not by publishing slogans, but by treating inclusion as a measurable facet of governance.
I see the impact of this shift through my work with The 10,000 Interns Foundation. What began as the 100 Black Interns Programme in financial services evolved into a national movement. The initial pilot exceeded expectations, placing more than 500 interns in its first year across 200 employers. The mission expanded, to create 10,000 paid internships for Black students and graduates across 25 sectors within five years. In 2025, we surpassed that goal, making this the largest pipeline of Black talent in the UK.
The real measure of progress is not just internship numbers but the system supporting them. The Foundation now focuses on data-driven insight, employer training, mentoring and an alumni network designed to turn access into advancement. The talent exists, but the question is whether organisations are structured to convert potential into progression.
Advisory firms that engage with programmes like this gain more than future hiring opportunities. They build credibility, trust and cultural maturity that translates directly into stronger governance and better client outcomes. The firms that will lead the next decade will be the ones that treat diversity as an operational priority, not a compliance obligation. For advisers, that means embedding diversity into governance, not just recruitment, aligning firm culture with standards they expect clients to meet, and demonstrating that inclusion informs risk thinking and client advice.
The question is no longer whether diversity belongs in ESG or Consumer Duty. The question is whether advisory firms are prepared to treat it with the same seriousness as every other driver of performance, trust and growth.
