Increasing diversity takes more than a mindset
After summer anti-racism protests , the financial services industry has begun reexamining its need to diversify . Only 1.6 % of American CFPs are Black , and only 2.2 % Latino , in a nation about 13 % Black and 18 % Latino . Optimistic estimates pin the combined numbers of Black and Latino financial planners at about 15 % of the industry .
This needs to change quickly for the industry to keep up with the nation and clients . For many firms , this requires reimagining of recruitment pipelines , “ colorblind ” policies — changes that become more difficult and necessary the longer firms wait to implement them .
Brenton D . Harrison is a Financial Advisor with Henderson Financial Group , Inc ., and a qualifying MDRT member . He was listed in Think Advisor ’ s 2015 Top 30 Advisors under 30 . Brenton actively attends his church and serves with several volunteer organizations .
This is not the time to get ahead of the curve ; this is the time to catch up ... Only 1.6 % of American CFPs are Black , and only 2.2 % Latino , in a nation about 13 % Black and 18 % Latino .
Many college students of color don ’ t know our industry exists , nor the careers it offers . I didn ’ t learn about it until after graduation . This is true at predominantly white institutions ( PWIs ), but Historically Black Colleges and Universities ( HBCUs ) and tribal colleges , which are often underfunded , can have fewer students and often lack business and career services departments . At PWIs , students of color may not feel welcome inside existing institutions .
Firms must get creative to effectively recruit students of color . Rather than seeking resumes with industry experience , look for personalities and traits that match those of an advisor . Skills can be learned , personalities cannot . Connect directly with professors and minority alumni groups to reach more applicants .
Keeping them Clients are human beings and can harbor unconscious biases . That doesn ’ t mean they ’ re bad people , but they can operate off prejudices , like assuming advisors of color are junior-level or unqualified . In my career , it took being named to Think Advisor ’ s 30 Under 30 , Nashville Business Journal ’ s 40 Under 40 and years of MDRT membership before I retained a single white client to whom I was referred .
Advisors of color usually attract clients of the same race , who are often first-generation high income-earners . They have fewer assets under management , often subsidize their parents ’ finances and their advisors must supplement fee income with insurance commissions .
Firms that only pay advisors through fees for assets under management have prohibitive structures for the success of employees of color . While such rules are “ colorblind ,” they don ’ t account for wealth inequality or the biases of those with more money in the first place .
Playing catch up
White-majority firms and white managers should combat such bias . They should introduce white clients to advisors of color , showcase capabilities and facilitate clients ’ trust . But the industry can ’ t wait for clients ’ minds to change — it has to change itself , immediately .
Workplace environments matter too . Employees of color must feel safe at work , like they can speak up and be listened to . Work must be a safe space . If diversity is the goal , assimilation cannot be the envisioned result .
Creating a more diverse financial services industry requires big changes — widened recruitment pipelines , rewritten policies and braver workspaces . These changes are demanded by the moment and generations of future and current clients . This is not the time to get ahead of the curve ; this is the time to catch up .
44 Perspectives Q4 2020