Opening Remarks at the July 16, 2020 Special Meeting of the Asset Management Advisory Committee
July 16, 2020
Thank you, Ed [Bernard]. In the short time since the Asset Management Advisory Committee’s inaugural meeting last January, it already has earned a reputation for taking up matters of real importance to the industry. Today’s agenda—with panels set to discuss diversity and inclusion, as well as data privacy and the effect of technology on investment advice—is no different.
The importance of ensuring that our workplaces are diverse and inclusive is beyond dispute, and I would argue, universally supported. Where the debate begins, however, is what those terms mean, and how we should attain our shared objective. I have never been an adherent of numerical goals and metrics on questions of diversity and inclusion because I worry that, in trying to achieve an objective I share, they unintentionally strip people of their individuality—which is the heart of any true diversity.
People are not fungible. Rather, each person comes to the table with a unique perspective formed through an intricate mixture of personality; personal and professional experiences; core values; education; past triumphs and trials; fears and foibles; influence from family and friends; and hopes for the future. We cannot appreciate that beautiful, complicated blend that makes up a person simply by looking at the person; we can only appreciate it by getting to know the person. Knowing one characteristic or to which group someone belongs is not enough.
I fear that, counterintuitively, that simple, yet profound truth about the value and uniqueness of every individual gets too little consideration when we talk about diversity and inclusion. Scanning a room or looking at the pictures populating the “About Us” page of a firm’s website does not tell us much about the firm’s diversity. I cannot tell you the number of times that people have made some pretty wrong assumptions about me based on my gender. As it turns out, women do not all think the same way! While being a woman is an important part of who I am, it does not completely define who I am. No one woman is perfectly representative of all women. That said, the asset management industry plays a vital role in people’s lives, so it ought to be embedded in, and draw talent from, every community across the country.
When tackling these essential questions this morning, I would urge you all to contemplate the importance of exposing American children early in their lives to financial literacy and, linked with that, the career opportunities open to them in the financial services industry. I wanted to be a securities analyst when I was young, but I was a really nerdy kid. If asked today about a career as an investment adviser, many young people might echo George Costanza when asked whether he thought being a marine biologist was a good job! I didn’t know that a career in asset management was a job! As more and more young Americans look to the asset management industry as a potential career choice, market forces will ensure that talent will be recognized and whole new groups of citizens will find rewarding work assisting their families and neighbors to secure their financial futures.
This afternoon’s panel addresses important questions surrounding data privacy. As the government collects more and more of our private data, it is incumbent upon us all to ensure that, first, the collection of the information is needed, and secondly, that it is protected and kept safe. As I have made clear in my opposition to the Consolidated Audit Trail, we ought to be asking the same questions in financial markets that we ask in other areas of life. Why should someone who is not suspected of wrongdoing have her every move tracked in the financial marketplace? We too often undervalue the right to be free of government monitoring in the financial markets. On a more practical level, many asset managers are confronting significant challenges in trying to comply with new data privacy protection laws. Is there anything the Commission can do to aid firms as they navigate these difficult waters?
This afternoon’s agenda also includes the effects of technology on investment advice. Technology can help to make investment advice available to more people at a lower cost than ever before. It also can be a path for new entrants to come into the industry. Of course, new technology also raises novel legal and operational questions. I hope the discussion will shed light on areas in need of regulatory guidance or regulatory changes to accommodate technologies that would benefit asset managers’ clients. I look forward to hearing your discussion.