UPDATE: Why there should be more minority financial advisers
By Alessandra Malito, MarketWatch
More diversity could help the industry in many ways
Malik Lee, a financial adviser at Henssler Financial in Kennesaw, Ga., is determined to bring awareness to the lack of diversity in the financial planning profession because when he started in the industry 14 years ago, he was often one of the very few African-American advisers in any given room with other advisers.
Lee is still one of only a small group of minority advisers in the industry, but he makes a point to talk about his profession to try to change that, and where other, sometimes younger, advisers fit in. He is a guest lecturer at Morehouse College and Kennesaw State University, he is a committee member of the National Diversity Committee for the Financial Planning Association and he writes test questions for the Certified Financial Planner exam.
"In an industry like mine, one can look around a room on many occasions and be the only minority or woman in the room," he said.
The financial services industry is lacking diversity (http://www.marketwatch.com/story/heres-how-much-men-dominate-the-asset-management-industry-2017-05-04), in all sorts of ways. About 30% of personal financial advisers were women in 2016, according to the Bureau of Labor Statistics (https://www.bls.gov/cps/cpsaat11.htm), but the numbers are even lower for minorities: only 6% of all advisers were black, 7.7% were Asian and 7.1% were Hispanic.
See:Financial services industry is at risk to get even whiter (http://www.marketwatch.com/story/financial-services-industry-is-at-risk-to-get-even-whiter-2016-11-14)
Having diversity helps the industry in numerous ways, advisers say:
Diversity provides firms and colleagues with different perspectives. "No matter what I read or study, I can't put myself in the position of what minorities deal with on a day-to-day basis," said Randall Bruns, a financial adviser at HighPoint Planning Partners in Downers Grove, Ill. "I think everyone would be better at their jobs if there was a more diverse, open, understanding industry of consumer needs and consumer experiences."
Clients of various backgrounds can connect with people who share similarities. "It helps to work with people who understand you," said Bellaria Jimenez, managing partner of MassMutual Tri State. "Clients want to feel they are being heard and understood -- it helps people get out of their comfort zones."
The industry can grow, and firms can gain more young advisers (http://www.marketwatch.com/story/how-advisers-can-hire-and-keep-young-employees-2017-03-27), who may one day take over the business. "If you look at where the industry is going and where demographically we are going, it is critical that all companies of any size expand and create an environment where they're welcoming and supporting diversity," said Jocelyn Wright, a financial adviser and assistant professor of women's studies at The American College in Bryn Mawr, Pa.
Some clients will also undoubtedly benefit, as they might prefer an adviser with whom they can connect, and therefore take their advice or ask specific questions both adviser and client can relate to. "We are in no way saying women only want to work with women or certain minority groups want to work with people of their same backgrounds, but familiarity breeds comfort," Wright said. "If we don't have quality professionals to offer that option for these consumers, they will likely go unadvised."
The industry has recognized this shortfall: numerous firms mention a need for diversity and inclusion on their sites, such as Edward Jones, which has a cross-cultural development program (http://careers.edwardjones.com/explore-opportunities/new-financial-advisors/support/programs/diversity.html) to address challenges advisers may face, and Morgan Stanley, which boasts a 600% increase in women and multicultural complexes and branches and its diversity networking groups (https://www.morganstanley.com/people/financial-advisors/diversity). Scholarships also exist to encourage financial services students to join the profession, such as the Milton Stern Scholars Fund for students in New York, Connecticut and New Jersey and the Deena Jo Heide-Diesslin Foundation Challenge Match Scholarship, for those who demonstrate a financial need or represent underrepresented populations within the financial planning profession.
See also: Why many financial advisers use someone else to manage their own money (http://www.marketwatch.com/story/why-some-financial-advisers-use-someone-else-to-manager-their-own-money-2017-04-12)
But more needs to be done. One PricewaterhouseCoopers report (http://www.pwc.com/gx/en/industries/financial-services/assets/pwc-diversity-and-inclusion-making-diversity-a-reality.pdf) showed organizations say they are homing in on diversity, yet actions are not being effectively executed. To make diversity happen, it has to start from the top down, such as having leaders clearly articulate goals tied to diversity. Recruiters should find candidates of all backgrounds, and employees of all backgrounds should seek promotions, the report suggested.
-Alessandra Malito; 415-439-6400; AskNewswires@dowjones.com
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