PLANADVISER - November/December 2021 - 26

practice management / diversity
says, citing a 2019 McKinsey & Co. study, then
points to her own finding that women are five
times more likely than men to work with a
female adviser.
Greater client satisfaction can also result,
Abrams says. " When people of color see more
financial [advisers] who reflect their background,
there's greater opportunity for transparency
and trust to be built between the
adviser and client. "
So how does a firm recruit for DE&I, and,
maybe just as challenging, ensure those new
employees stay?
Abandon Tradition
Alternatives that work are reaching out to
historically Black colleges and universities
(HBCUs), recruiting at job fairs and trade shows
and building relationships with professional
groups dedicated to industry diversity; two are
the Association of African-American Financial
Advisors (AAAA) and the NAPFA [National
Association of Personal Financial Advisors]
Women's Initiative, FlexShares reports.
Christopher Thompson, head of diverse
adviser experience at J.P. Morgan Wealth
Management in New York City, also notes
the ineffectiveness of firms recruiting within
their own network.
Those that are most successful see
recruiting as part of a multi-dimensional
process. " Diversity is embedded in everything
we do as a firm, " Thompson says. Not only
contacting HBCUs, the firm's advisers " are
engaged in a five-year partnership with them
to sponsor a financial planning curriculum,
create a mentorship framework and provide
375 scholarships to students who are interested
in financial planning, " Thompson says.
J.P. Morgan takes a long view that has
sights on gaining new clients. Through its
DE&I efforts, it aims to engage and strengthen
underserved
education and life-enriching products and
services, he says.
Charles Schwab, one of six firms profiled
in the CFP Board's Center for Financial Planning
whitepaper " Diversity in Action: How to
Sustain the Financial Planning Profession, "
precedes recruiting with grooming potential
candidates. With nonprofit Braven, an organization
that empowers promising, underrepresented
young people, it created a program
to help first-generation students from lowincome,
minority backgrounds prepare for a
Schwab internship, the paper says.
communities with financial
14%
are nonCaucasian
executives
21%
are
women
executives
Diversity Makes Sense
For Advisory Firms
The financial advisory industry is much whiter and more
male than the U.S. population. Research finds that actively
pursuing greater inclusiveness may help a practice better
position itself for future success.
Diversity Lags
Changing Demographics
Diversity in adviser firms trails way behind the U.S.'s changing
demographics. In 2020, research found:
Ethnicity
31%
of the U.S.
population
is Black or
Latinx1
4%
1U.S. Census Bureau; 2
of Certified
Financial
Planners are
Black or Latinx2
Gender
51%
of the U.S.
population
is female1
18%
Center for Financial Planning; 3
of financial
advisers are
female3
Cerulli Associates.
Gender and Ethnicity in Executive Roles
How women and ethnic minorities are represented, on average,
in the North American finance, insurance and professional
services industries:
Ethnicity
Gender
15%
are nonCaucasian
board
members
30%
Source:
McKinsey & Co., " Diversity Wins, 2020 "
are women
board
members
26 | planadviser.com November-December 2021
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PLANADVISER - November/December 2021

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