Large wealth managers are embracing sponsorship over mentorship when it comes to boosting the number of Black senior leaders and other minority executives.
In a panel at the Association of African American Financial Advisors Vision conference, executives from Morgan Stanley, J.P. Morgan Wealth Management, Citi and Stifel explained the importance of not simply guiding incoming Black advisors and other minority professionals, but acting on their behalf, including by speaking up as leaders. While Black finance and insurance professionals have roughly the same representation in the industries as in the U.S. population, the share of executives is much lower. Sponsors going beyond being merely mentors could be instrumental in retaining the talent and driving the numbers higher, panelists said.
Indeed, Alex David of Stifel Independent Advisors credited sponsorship in part for his
“We've gone from mentorship — which, for decades, was the key, to this whole concept of, ‘Well, now maybe you need a sponsor,’” David said. “Your name needs to be in the room when you're not, right? Someone needs to be saying, ‘I think Alex can do that. I think Susan may be the person,’ and they're willing to put their name on the line to push them forward. And so I really think that I've benefited from that in many ways.”
Compared to the available numbers about the finance and insurance industry from the U.S. Equal Employment Opportunity Commission, David’s advancement stands out from the norm among Black professionals. Only 3% of executives, senior officials and managers in the industry were Black in 2018, compared to being 13% of the overall workforce.
Executives and other senior officials who lend their voices on behalf of advancing Black professionals within their organizations play an important role “as leaders in this diversity journey,” said Susan Reid, Morgan Stanley’s global head of diversity and inclusion.
She praised the panelists for “being willing and able to push the agenda, to push the focus on D&I, but also to push back when there's resistance,” she said. “Your voice in this is the game changer. We can bring solutions to the table, but your voice is the game changer.”
Reid made the point after Samuel Palmer, the head of digital wealth planning at J.P. Morgan Wealth Management, mentioned the significance of CEOs like Jamie Dimon setting the right tone in discussing representation of Black, Latino and other minority professionals.
“Jamie is absolutely unabashed,” Palmer said. “And so is, therefore, the rest of the organization saying, ‘We want to make J.P. Morgan a great place for Black people. Literally saying it like that is driving a certain tone. The first time you hear it, you're like, ‘Woah, what? Did he just say that?’ And then over time, it just becomes part of the way that we speak and permeates through the organization and outside.”
That kind of outreach to more college campuses with students who don’t come from wealthy backgrounds and may not be aware of careers in wealth management could help alter the industry’s current demographics as well, said David Poole, head of Citi’s U.S. Consumer Wealth Management division. The bank is also changing its approach to mentoring, he said.
“What I've seen really enhance and pick up momentum are our internal mentorships, but also more importantly, sponsorships,” Poole said. “You need someone in your camp who is there advocating for you internally, whether that be in a financial advisory role or a senior leadership role. And I think our corporate programs have to encompass and have that design.”
