J.P. Morgan Wealth Management launches HBCU scholarships

After a megabank pledged to spend $30 billion to advance racial equity and hire 300 Black and Latino financial advisors in the next five years, its wealth management arm is collaborating with the United Negro College Fund on a new program aimed at carrying out both goals.

The J.P. Morgan Wealth Management Scholarship Program will provide 75 sophomores with $2,000 towards their tuition at 11 historically Black colleges and universities each year through 2025, plus internships and an additional $5,000 scholarship offered to about 40 seniors out of the group on a merit basis, says Christopher Thompson, head of Diverse Advisor Experience at JPMorgan Chase’s financial advisory unit. Eligible rising first-year undergraduates can apply through the College Fund’s website until midnight on June 24.

Amid nationwide Black Lives Matter protests last year following the murder of George Floyd, J.P. Morgan joined a wide array of financial services firms and other companies stepping up with donations, commitments and other programs designed to stop the cycles of systemic racism. While welcoming the renewed attention and tens of billions of dollars for the cause, critics often question whether the so-called racial reckoning will break through historic and persistent barriers to reduce wealth disparities and foster more underrepresented professionals in finance.

For example, fewer than 2% of CFPs are Black, less than 3% are Latino and under a quarter of them are women, according to the CFP Board. The wealth management scholarship is “an intentional way to lean in and say, ‘We want to increase representation for Black and brown individuals in particular in the business of wealth,’” Thompson said in an interview.

“I love that we are having the discussions, that we are making it a strategic priority, but also having a realistic view that this thing isn't going to happen overnight because it didn't start overnight,” Thompson says. “I feel good about the direction we're going in, but it's slow work.”

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The participating schools in the new scholarship are: Alabama A&M University, Central State University, Clark Atlanta University, Delaware State University, Howard University, North Carolina A&T State University, Paul Quinn College, Prairie View A&M University, South Carolina State University, Tennessee State University and Winston-Salem State University.

If accepted, awardees then qualify to apply for two summer internships after their sophomore and junior years, the Advancing Black Pathways Fellowship Program and the J.P. Morgan Wealth Management Service Center Internship.

“Partnerships like this make the path for students of color clearer, helping them achieve goals they might not otherwise be able to attain,” Michael Lomax, CEO of the College Fund, said in a statement. “All HBCUs and their students hope this partnership can be a model of success for others within the corporate giving community.”

In order to be successful in their efforts, J.P. Morgan and other wealth managers need to ensure that professors and students at HBCUs — not just high-level administrators — are fully aware of the opportunities, says Nandita Das, the director of Delaware State’s financial planning program.

Das, who’s also an advisor, calls it “pipeline leakage” when students complete college planning programs but don't enter the profession. Firms often fail to engage students when they send executives that don’t look like them or, worse, lack the range of experiences or knowledge to connect with the prospective advisors in a way that makes them comfortable, Das says.

“Don’t wait to make yourself educated in cultural competency, but let's do this simultaneously,” she says. “The intent has to be that real change is going to happen, because otherwise it's going to be a fad...Our goal is not just throwing money; our goal is to change the profession.”

J.P. Morgan Chase’s $30-billion commitment has four areas of focus: affordable housing, Black and Hispanic-owned businesses, access to banking and capital and boosting workforce diversity. The impact of the scholarship program and J.P. Morgan’s related pledge to hire hundreds of Black and Latino advisors will decide whether it and other financial firms lead a true long-term shift in the number of underrepresented professionals in the business.

Scholarship awardees will learn that being a financial advisor is “a viable career path” for them, as well as building awareness among their friends and families of “this thing called investment and stocks and bonds,” Thompson says.

The firm selected the HBCUs for the program based, in part, on their proximity to J.P. Morgan service centers in Columbus, Ohio, and Plano, Texas, he notes. In launching the scholarships, the firm intends to build a different angle into the profession than the traditional industry training calling for new representatives to build a book of business out of personal contacts.

“We believe that this is a pathway for education, access, learning and licensing,” Thompson says. “I fully expect that, year over year, as we learn more, as they learn more, as our business grows, there may be additional pathways.”