DEI in financial services: can the regulators shift the dial?

Though some of the ambitious proposals have been halted, the FCA's work on integrating non-financial misconduct, including sexual harassment and bullying, into its conduct regime is an immediate priority. Lucy Hadrill and Jo Martin examine the story so far, the direction of travel, what this might mean for financial services firms, along with how to take a proactive approach to DEI in the workplace.

Lucy Hadrill (lucy.hadrill@wbd-uk.com) is an associate in the Financial Services Regulation team at Womble Bond Dickinson, where Jo Martin (jo.martin@wbd-uk.com) is a partner who co-leads the southwest Employment team and advises on all aspects of employment law. Legal director Emma Radmore (emma.radmore@wbd-uk.com) is a practice development lawyer specialising in financial services regulation, while Karen Plumbley-Jones (karen.plumbley-jones@wbd-uk.com) is a practice development lawyer whose focus is employment law. Harry Wells and Amy Battinson are trainee solicitors with the firm.

Improving diversity, equity and inclusion (DEI) in UK financial services has been on the regulatory agenda for some time. The regulators' focus was sharpened in 2021 when it became clear that particular groups of consumers were suffering financial harm as a result of the Covid pandemic, and last autumn, the Financial Conduct Authority and Prudential Regulation Authority announced bold proposals to drive forward the DEI agenda in financial services. (This article refers to DEI although the regulators' consultations refer to D&I). These included measures that could ultimately lead to public 'naming and shaming' of firms failing on DEI, with comparable published data available for direct assessment of firms by their customers, employees and stakeholders. Then, in March this year, the 'Sexism in the City' inquiry findings were published, which generated rather disjointed feedback from the regulators and Government.