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Beyond Lip Service In DEI
How is the financial advisory industry actually doing at improving representation ?
By Ben Mattlin
DIVERSITY , EQUITY AND INCLUSION ( DEI ) have become buzzwords in many industries . Some companies boast about their DEI record , saying they ’ ve achieved greater participation by women , minorities or other historically underrepresented people . Others simply acknowledge the concept as a noble goal they are working toward .
But beyond the lip service , how is the financial advisory industry actually doing at improving in representation and fair play ?
Some Progress But Not Enough
The answer , of course , depends on whom you ask . To Anita Knotts , the founder and CEO of Lotus Women ’ s Institute , a Chicago-area organization dedicated to attracting , developing and advancing women and women of color in wealth management , the financial advice industry is “ sorely lagging behind other industries when it comes to improving representation of women and minorities .”
That does not mean , however , that she thinks there hasn ’ t been any progress . When Knotts started in financial planning more than 30 years ago , she says , “ all advisors at my firm were white and male . The females were all in sales support roles or back office or human resources .”
It wasn ’ t until she connected with an advisor who was an African-American man — and , later , one who was a white woman — that she began to have hope . “ These two experiences were powerful and necessary for me ,” she recalls . “ Because I am female and a person of color , I needed to see what was possible . This is absolute proof that we cannot become what we cannot see .”
‘ You Can ’ t Just Hire And Call It A Day ’
Today , Knotts says , many firms are hiring women and minorities but not promoting them . “ You can ’ t just hire people and call it a day ,” she says , adding that such practices “ reek of short-term thinking .”
Instead , she says , firms need a bigger investment in coaching , training and generally developing the talents of underrepresented professionals . “ I still see a lot of firms simply trying to check a box and make a ‘ diverse ’ hire , but not really doing much after hiring to actually invest in the development of that person ,” she says . “ Planting the seed is one thing . But you have to water that seed to watch it grow .”
Manal Fouz , chief compliance officer at Azzad Asset Management in Falls Church , Va ., tells a similar story . “ I ’ ve been in the financial advisory industry for nearly 20 years ,” she says . “ When I started going to conferences , I looked like an alien from outer space — a Muslim American woman of Arab descent wearing hijab .”
36 | FINANCIAL ADVISOR MAGAZINE | MAY 2023 WWW . FA-MAG . COM