20 memorable — and actionable — takeaways from the CFP Board’s Diversity Summit

November 24, 2020 4:14 PM

The spotlight on racial justice and equity in America following the killings of Breonna Taylor and George Floyd and others has renewed calls for change in the wealth management industry.

Industry leaders have laid out a plan for how action can become permanent and sustainable at the CFP Board’s Center for Financial Planning Diversity Summit, which was held virtually this year.

Two things were made clear at the annual event: There’s work to be done and more companies in the industry are joining the conversation and taking steps to promote diversity.

Against the backdrop of a global pandemic that has disproportionately impacted minority communities, Merrill Lynch began publishing demographics of its financial advisor workforce, including breakdowns by race and gender. FINRA set up a taskforce to assess the self-regulatory organization. Financial advisors joined anti-racism efforts.

In an effort to narrow the wealth gap, the biggest U.S. banks are expanding their lending to Black-owned businesses, according to the Wall Street Journal.

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Such firmwide undertakings build off of the work of organizations like the Association of African American Financial Advisors, which has been supporting Black advisors and other minorities in the industry for nearly 20 years.

The initiatives also follow the action of countless individuals in wealth management who have started uncomfortable conversations, launched resource groups, mentorship programs and scholarship programs at their firms.

Speakers at the conference told attendees that progress can take time. Currently, there are 3,259 Black or Latino CFPs, according to the CFP Board. That’s only 3.8% of all CFPs, though the two groups make up approximately 30% of the U.S. population. Women make up approximately 23% of CFP certificants.

Number of Black or Latino CFPs rises 12% to 3,259

Diversity and equality

Can recruiting and company culture shifts boost CFP diversity?

November 19, 2020 12:35 PM

Speakers also emphasized that the sustainability of diversity must be a group effort, supported by top management and implemented at all levels.

“We need to move away from this model of DEI being a person or a department,” said John Eing, financial advisor and partner at Abacus Wealth Partners.

Scroll through for a recap of the conference to see what still has to be done to implement change:

Mellody Hobson, Co-CEO, Ariel Investments

“This is really [as] mission critical as many companies say that it is. And quite frankly, it should be. To the extent you are not a diverse corporation in the 21st century, I do think you're committing corporate suicide. And it's not a question of ‘if’ you will die. It's a question of ‘when.’ So, if this is mission critical as so many companies and leaders say, then there should be direct accountability in terms of compensation. And it should be very, very clear that there are implications for not meeting goals.”

Tiffany McGhee, CEO, Institutional Investment Services, Momentum Advisors

“By the year 2030 women will control the majority of wealth in this country. We're already pushing up against that right now. So if you're a man and you don't know how to talk to women and girls, that's a problem for your business. And we say [that] to people all the time, because we'll meet with managers all the time. Every week, we do pick individual stocks and we do pick managers. And if your entire team — and I've said this in a group and after I said it, I was like, 'Oh, did I really just say that?' — if your entire team is white male, I don't want to invest in you. And don't give me the excuse that you can't find anybody because it's 2020.”

Matt Aaron, founder of Aaron Financial, Northwestern Mutual Wealth Management

“The advisor career path where you're building your own clientele — it's sort of ‘eat what you kill,’ while someone might not have the financial resources to be able to sustain through that process. They might not have success there and they might have a bad taste in their mouth as it relates to the career opportunity, and then completely derail themselves somewhere else where they could have been great advisors if they’d had the teaming approach. Or maybe they could have been a service advisor first and then grow and develop, build even their own savings to sustain in the business and then continue to flourish moving forward.”

(For a recap of a session on more inclusive recruiting methods and company culture shifts, click here.)

Cy Richardson, Chair, CFP Board Center for Financial Planning Diversity Advisory Group

“With everything that 2020 has brought us, the systemic issues are clearly being laid bare. It’s disproportionately affecting Black and brown people. A loss of women from a workforce at four times the rate of men. Black women and Latinas are at a double-digit unemployment rate, almost twice that of white women. And then America, and around the world, people are reckoning with the systemic racism that plagues colonial countries.”

Lauren Taylor, vice president, Advisor Diversity and Inclusion, LPL Financial

“If you are an emerging talent, if you are in the earlier stages of your career, speak up. Actively seek out those mentorship opportunities from those who have that experience. And if you need help with something or you want advice in a certain area, a lot of times it's not just going to fall out of the sky. You’ve got to really go out there and be proactive about seeking out that mentorship. None of us reach our maximum potential, and no matter what the career is, if we try to go it alone.”

John Eing, Partner, Abacus Wealth Partners

“There needs to be a major cultural paradigm shift in what DEI is. I think we need to move away from this model — and this is just from the perspective as advisors — we need to move away from this model of DEI being a person or a department. It really needs to be like a culture or behavior or practice we apply to every area of the business. And I believe if we do that, we can all really do our jobs even better.”

Anita Knotts, senior vice president, Calamos Wealth Management

“We're at a point now in society — not just in our industry — where it's so much more about action than words. A lot of people are saying the right thing. A lot of the firms out there are saying the right thing. But now it's watching who does what with those words.”

Andy Sieg is the head of Wealth at Citigroup

Andy Sieg, President, Merrill Lynch Wealth Management

“For too long, the larger firms — including Merrill — have been able to avoid the diversity spotlight. Many promises, good intentions, lots of rhetoric.”

(To see how Merrill Lynch President Andy Sieg described his company's efforts, follow this link.)

Brittney Castro, Founder and CEO, Financially Wise

“I was not like the rest of these advisors. Introduction after introduction, an older white male advisor and his wife would ask if my boyfriend was the one who won this conference event. When I told him it was me and not him, their faces would change. Why would they assume it was him and not me, I thought. Interesting. At that time, I wanted to throw in the towel and just give up. Why should I even bother in this male-dominated field? If no one could see that it was actually me, a young female financial advisor, that was the up-and-coming one and they should be watching out for? But I didn't give up. And actually this experience was the fuel for a lot of my initial drive to become a top young female financial planner in the U.S.”

Brian Lamb, Global Head of Diversity and Inclusion, JPMorgan Chase

“We all have a role around sustainability. We all have a role play to drive change within financial service.”

Elaine King, founder and president, Family & Money Matters Institute

“They hired me because I made a comment and that opened an option, an opportunity, and actually a position in a large bank. So for those of you who say, ‘How am I going to get into financial planning? I don't even know stocks and bonds,’ don't worry about it. Just get your foot in the door and be very curious about it.”

Raymone Jackson, Global Head of Diversity & Inclusion, T. Rowe Price

“A client focus has always been a critical priority for success in this industry. And what that means now is you have to have cultural competence. If you don't have cultural competence and aren't building cultural competence, you're going to struggle because clients are expecting that now.”

Jen Kelly | KeliComm LLC

Rodolfo Rodriguez, vice president, Diversity & Inclusion, Ameriprise Financial

“How do we enable and empower people to bring their whole selves to work and have those candid conversations on race and diversity? I think those are critical.”

Bernie Clark, head of Schwab Advisor Services

“I’m bullish on what's to come, because even though we have a long way to go, we're going there, one story at a time.”

Dipti Kachru, chief marketing officer, JPMorgan Wealth

“If we don't measure, we don't know whether we're moving the needle. And if we're not moving the needle, we don't know where we're falling short.”

D. A. Abrams, CAE managing director, CFP Board Center for Financial Planning

“While the CFP board's 2020 CFP exam data points are not yet official, we are on track to meet and will likely exceed our diversity goal for CFP professionals.”

Amanda Kerley, head of HR Strategy and Culture, Dynasty Financial Partners

“In the last year, we have noticed so many of our prospects and so many people that we're interviewing, they want to know about diversity at Dynasty. They look at our website, they look at our board, they want to know, ‘What are we doing? What are our goals?’ And that’s shifted a lot because I will honestly tell you, five years ago, definitely 10 years ago, people didn't ask that question.”

Boaz Lahovitsky, head of National Branch, JP Morgan Chase

“I think the financial results are a result of what happens underneath, which is you get better talent. The talent stays, and the talent is more creative. This is what you are trying to unleash or unlock with good diversity and inclusion. I think diversity gets you part of the way. Inclusion unleashes the entire potential.”

Kevin Keller, CEO, CFP Board

“Let's not forget that when you're in with the children in elementary and high school, that's a great opportunity to talk about how good a career you can have in financial services and delivering financial advice. So that's my plug for the future of Certified Financial Planner professionals... Our goal is to ensure at CFP Board that everyone has access to competent financial planning.”

Barry Simmons, managing director, eEast division for Chase Wealth Management at JPMorgan Chase

“We need to listen. It's not our objective — it's what are our clients telling us that they need, that they feel that they're missing or how we can assist them so they can achieve whatever goals and objectives that they may have … because that's where the relationship and the trust really starts to meld, as opposed to us always trying to proactively tell them where we think they need to be.”