15th December 2023 Joint letter to FCA and PRA on socio-economic diversity in finance

Dear Nikhil Rathi, CEO, Financial Conduct Authority, and Sam Woods, CEO, Prudential Regulation Authority.

We are a collective of organisations passionate about improving UK social mobility in the interests of individuals, the economy and society. The finance sector has the largest class pay gap of any profession. On average, those from lower socio-economic backgrounds receive £17,500 less per year than those from higher socio-economic backgrounds. Your current consultation on diversity and inclusion is a unique opportunity to address this and ensure the sector continues attracting and retaining top talent while acting in the interests of consumers and wider society.

The financial services sector is a powerhouse of the UK economy but is affected by the UK’s longstanding productivity problem. A focus on increasing socio-economic diversity can address this and ensure the sector remains internationally competitive.

City of London research suggests positive action would be transformative; increasing productivity and creating a more commercially successful financial services sector. Improving social mobility to the average level in western Europe could increase annual GDP by approximately 2 per cent.

At an individual level, research by Progress Together has found that socio-economic background is more likely to affect a person’s route to success than gender or ethnicity.

We know in business, what gets measured gets done: we urge you to make data collection mandatory.

The collection of socio-economic background data by the financial sector is rapidly accelerating when compared with the situation only two years ago. Investors are increasingly asking for socio-economic data, recognising it as an indicator of a company focused on growth, avoiding groupthink and taking every step to identify talent.

Progress Together represents over 30 per cent of the UK financial services workforce and all its members collect socio-economic background data, while 40 per cent of the Investment Association’s membership already collect data. You can support this acceleration towards positive change; do not miss the opportunity.

Jenni Anderson CEO, The Talent Foundry

Sarah Atkinson CEO, Social Mobility Foundation

Becky Bainbridge CEO, Reclaim

Nick Bent CEO, upReach

Laura Boyle Head of Stakeholder Engagement, Snowball

Sophie Hulm CEO, Progress Together

Shirine Khoury-Haq CEO, Co-operative Group

Sophie Pender CEO and Founder, The 93% Club

Nathalie Richards CEO, SEO/London