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How NTAM’s Minority Brokerage Program Helps “Level the Playing Field”

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  • On: 12/08/2022 10:24:29
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By Lizzy Lees, NCPERS

NCPERS spoke with Bob Parise, Managing Director, Head of Sales & Relationship Management for Northern Trust Asset Management (NTAM), about the firm's Minority Broker Program and commitment to advancing diversity, equity, and inclusion.

Earlier this month, Northern Trust Asset Management (NTAM), selected 16 minority-owned broker-dealers for its Minority Broker Program, an increase from 11 in 2019. NCPERS spoke with Bob Parise about the 15-year old program, the advantages of working with minority-owned firms, and NTAM's commitment to advancing diversity, equity, and inclusion.
Bob Parise, NTAMParise, who serves on the NCPERS Advisory Council, is Managing Director, Head of Sales & Relationship Management for NTAM, which is a premier level service provider member of NCPERS. In his role with NTAM, Parise collaborates across sales and client relationship management to establish business strategy and lead the delivery of investment solutions, including equity, fixed income and alternative asset classes.
NTAM's Minority Brokerage Program started in 2007. Why was it created and how has it evolved over the last 15 years?
Companies that excel on cultural, ethnic and gender diversity are among the top performers in their respective industries. At NTAM, we attribute this to the fact that different backgrounds and views drive higher levels of engagement and increased innovation, leading to greater profitability. In 2007, this led us to send out a request for information for minority brokers engaged in equity trading, as we wanted to advance our use of minority brokers through a formalized selection process. Our ultimate goal, which we're proud to have achieved, was to develop a more comprehensive program that was transparent to constituents, including clients, trustees, legislators, and participants in the plans.
Over the years, the program has evolved. We continue to take a leadership role in the industry and saw an opportunity to extend our commitment to diversity, equity and inclusion (DE&I) by increasing our utilization of minority brokers regarding our common & collective funds. In 2018, NTAM instituted a 10 percent trading target for them. In 2021, we raised the target to 15 percent. Targets have been consistently met or exceeded.
What are the barriers in the investment industry for firms owned by minorities, women, and disabled veterans? And why are programs like yours so important?
Across the industry, we find firms owned by minorities, women and disabled veterans often encounter the same barriers to entry, including limited access to equity capital, size/capacity constraints, and limited back office support. They also face challenges regarding technology and international capabilities. Programs like our Minority Brokerage one are intended to help lower these barriers by providing minority brokers with a window or avenue to compete, based on qualifications that are clearly evident. In short, such programs are essential to leveling the playing field.
Are there advantages to working with minority-owned firms that public pensions should know about?
Public pension funds typically serve a diverse range of employees. These individuals have a diverse range of needs. Specific to the needs of minorities, minority-owned firms will obviously be more likely to have shared experiences with them and related much more to their needs. Hence, by partnering with minority-owned brokers, public pensions will gain a better understanding of such needs and consequently be better able to meet them.
ESG as a framework for investing has received increased attention over the last few years. How does DE&I fit into an ESG investing strategy?
As previously noted, different backgrounds and views drive higher levels of engagement and increased innovation. So, recognizing that strength that lies in our differences, it's only logical that DE&I should be considered a core component of the S in ESG. DEI covers a range of such social issues, such as hiring from a diverse slate of candidates and achieving gender parity in senior management. In fact, advancing DE&I is integral to advancing ESG.   
Internally at NTAM, are there are any DE&I initiatives?
Diversity, equity and inclusion are core values of NTAM. As such, we advance DE&I through a number of initiatives. These include using a DE&I dashboard to assess our outcomes quarterly on hiring, retention and promotion, including at senior levels. We also have an Enterprise Talent Leadership Program that seeks to prepare diverse, mid-career talent for leadership success.  We also launched Unconscious Bias training for all employees; it had a 99 percent complete rate. And a DE&I Executive Leadership Learning series that provided leaders with training and resources to advance their DE&I knowledge on key focus topics.



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