INSIGHT by Bank of America

Adds Diversity Analysis Into Review and Selection of Asset Managers on Its Investment Platform

| Bank of America announced that the Chief Investment Office (CIO) has introduced initiatives to promote the representation of women and people of color among asset managers on its wealth management platform and across the industry. Multiple studies reflect the potential for strong investment results by diverse teams.1 In light of this, the CIO is now incorporating diversity analysis into the review and selection of all existing and new asset managers who are available to Merrill and Bank of America Private Bank clients.

In the first quarter of this year, the CIO Due Diligence team enhanced its investment process to evaluate all asset managers’ policies and practices on diversity and inclusion at both their organizational and investment team levels. Going forward, this analysis will be used in the CIO team’s overall investment assessments and factor into their level of conviction in investment strategies.

In addition, this team will collaborate with asset managers and industry groups who are focused on developing investment solutions that serve to (1) aggregate and direct capital to diverse managers, and (2) provide capital to diverse-owned businesses and populations as part of their underlying investment mandates.


“We are deeply committed to advancing the social and economic benefits of greater diversity and inclusion,” said Keith Banks, head of the Investment Solutions Group at Bank of America. “We hope these important steps forward will further encourage the asset management industry to accelerate its support of diverse-owned firms, portfolio managers and investment solutions.”


2019 Knight Foundation analysis found that only 1.3% of industry assets were managed by diverse-owned asset management firms. In 2017, 1.1% of assets were managed by such firms, indicating little progress over two years. The study also “found no statistically significant difference in performance across asset classes,” even after controlling for risk. In fact, it found that “funds managed by diverse-owned firms were overrepresented in the top-performing quartile of mutual funds, hedge funds and private equity.” Efforts to increase diverse-owned firms and investment solutions have intensified as demand for them increases, particularly from high net worth clients, foundations, endowments and other institutional investors.


“Multiple studies link diverse and inclusive organizations to stronger organizational performance,” said Anna Snider, head of due diligence for Merrill and Bank of America Private Bank. “We recognized the need to embed a diversity and inclusion assessment into the core of our due diligence process. We believe that this, along with other environmental, social and governance (ESG) considerations, can and should inform investment conviction and play an increasingly important role in our selection of managers and strategies going forward.”


In addition to these efforts, the CIO will actively participate in several industry initiatives, which include sponsoring the:

2020 Global GenderSmart Investing Summit, a global initiative dedicated to unlocking capital at scale, with a focus on gender equality, the climate crisis, education, health and human rights.

NICSA Diversity Project, which is designed to share research and best practices for building a more diverse roster of next-generation asset managers – breaking down traditional hurdles to success for women and people of other diverse backgrounds.


| Bank of America and the Visa Foundation are sponsoring Project Sage 3.0. The project, conducted by the Wharton Social Impact Initiative of the University of Pennsylvania’s Wharton School and Catalyst at Large, is the group’s third study of women-led, gender- and diversity-focused fund mandates. Based on an annual survey, the study is designed to respond to increased interest in understanding the characteristics of available private equity and debt solutions, including size, scope, stage and geography, as well as focus on diversity in investment selection.

Today, nearly 20,000 Merrill and Bank of America Private Bank wealth advisors serve clients representing approximately $2.9 trillion in client balances.2


| Bank of America commitment to advancing racial equality and economic opportunity

Bank of America recently announced a $1 billion, four-year initiative to help advance racial equality and economic opportunity, with a particular focus on helping to create opportunity for people and communities of color. The company is focusing on areas where systemic, long-term gaps exist and where significant change is required for progress to occur and to be sustainable, including health and health care, jobs/reskilling, and support to small business and affordable housing, all through a lens of racial equity.


| sources

1 Harvard Business Review, July/Aug. 2018 and Nov. 4, 2016

2 Bank of America earnings report, Q2 2020


| about 

Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 66 million consumer and small business clients with approximately 4,300 retail financial centers, including approximately 3,000 lending centers, 2,600 financial centers with a Consumer Investment Financial Solutions Advisor and approximately 2,200 business centers; approximately 16,900 ATMs; and award-winning digital banking with approximately 39 million active users, including approximately 30 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

The Chief Investment Office, which provides investment strategies, due diligence, portfolio construction guidance and wealth management solutions for Global Wealth and Investment Management (GWIM) clients, is part of the Investment Solutions Group (ISG) of GWIM, a division of BofA Corp.