How wealth management's most stubborn barrier will finally fall

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Walk around any generic wealth management conference and it shouldn’t take you long to notice that the industry has a diversity problem. The advisor population is overwhelmingly white, older and male.

At first glance, it appears that splashy, well-publicized efforts to attract more young people of diverse backgrounds to the profession still haven’t taken root.

But that overlooks a quiet yet powerful transformation underway: Advisors have been rolling up their sleeves to mentor minority newcomers for planning careers, giving them the necessary tools to establish themselves.

Their efforts come amid renewed focus on diversity in the workplace and in U.S. society at large.

What professional mentors accomplish with support and guidance can have a far-reaching impact that lingers long after headlines about protests have faded.

Allan Boomer’s independent firm, Momentum Advisors, is a reflection of where all this is headed: a group of professionals, of diverse backgrounds and ages, helping one another succeed in an industry that is challenging, but professionally and personally rewarding. “I’m really proud not just of our diversity, but the caliber of the team,” he says.

Boomer, who got his start at Goldman Sachs in 2004, founded his New York-based firm in 2012. Since then, the staff has grown from just him to include nine other professionals, operating from two offices and overseeing more than $300 million in client assets.

Tiffany Hawkins, the firm’s managing director, says, “I feel like sometimes people think that there isn’t room for them in this industry, that they’ll be going up against older white men. But there’s plenty of room. You’re not going up against anyone other than yourself.”

Hawkins changed careers, having previously worked as an investment planner for the entertainment industry. She joined Momentum Advisors in 2014 and credits Boomer and her colleagues with helping her develop her financial planning skills.

“I’m black, a woman and I’m young,” she says. “This is not your traditional wealth management person. So it’s important to see people like you who are successful.”

She adds, “When you see it, it’s like someone put a cape on your back with an ‘S,’ and you feel like you can take over the world.”

Financial planning has always been a tough industry for young professionals to establish themselves in, and mentoring has traditionally played a key role in helping many of the industry’s best advisors and managers succeed.

Jason Bowles, an advisor at RBC since 2000, says that of the 30 recruits in his training class, only five survived the hard early years, when many advisors struggle to build a roster of clients.

“I think there is space and opportunity for minority advisors, and we need them,” Bowles says. “It’s not an easy job, but with passion and hard work you can be successful. It’s critical to find the right fit with a company and a boss who will support and advocate for you.”

Momentum advisor Kyle Pitts says that Boomer, whom he has known since they grew up together in New Jersey, became one of his chief mentors when he joined the industry after studying engineering at Howard University.

“He’s been in the business longer than I have, and I didn’t have a business background. I had to transition over to this world, where he was already thriving,” Pitts says. “That relationship is maybe less than a mentor-mentee, because we’re building a firm together, but it’s still accountability and foundational principles.”

Even sharing a few words of encouragement can make a difference. Tony Barrett, a Philadelphia complex manager at Raymond James & Associates, credits his branch manager with helping him overcome the difficulties he encountered as a young advisor.

“For me, it was great that someone taught me how to build a book and find a target market,” Barrett recalls. “But the things I remember most are the things that kept me in the seat.”

He recalls a day early in his career when, with frustrations mounting, he began to think about quitting. But his branch manager and mentor pulled him aside and reassured him that every young advisor goes through similar growing pains.

“When I was cold-calling, I was always told that the next call could change your career,” Barrett says. “It’s true. That call can turn into a client that gives you a ton of money or a ton of referrals. But you have to be in a position where you can keep throwing pitches.”

He adds: “When I mentor people, that’s something I always try to think about: What will instill confidence?”

Boomer also points to how confidence is essential to sticking it out in a profession where the first 49 prospects might reject you, before you land one as a client.

“The biggest thing I had as a 27-year-old; … I’m going to call it false confidence,” Boomer recalls of his early days at Goldman Sachs.

“Maybe that came from working at a great firm. They really pumped me up and made me feel like I was the man. But eventually that false confidence was replaced with real confidence based on real competency.”

To be sure, the mentoring done by Boomer, Barrett and others are not isolated occurrences. Industrywide, wealth management firms and trade organizations are redoubling their efforts to attract newcomers from diverse backgrounds.

This renewed focus comes as the United States itself is becoming more diverse. African-Americans constitute about 13% of the population, according to U.S. Census Bureau data. Hispanics, who can belong to any race, comprise roughly 17%, while Asians make up nearly 6%.

Yet the planning industry is still predominantly white and male. Less than one-third of advisors are women and a mere 6% are African-American, according to data from the Bureau of Labor Statistics. Hispanics make up about 7% of the advisor population.

“We’re just not on track to reflect the diversity of the nation,” says Marilyn Mohrman-Gillis, executive director of the CFP Board’s Center for Financial Planning.

As part of its attempt to encourage more minorities and women to join the planning profession, Mohrman-Gillis says the CFP Board is currently conducting demographics research. The board is also planning a diversity summit for a yet-to-be-announced date in 2018.

Beyond the work of the CFP Board and others, the greatest impact may be taking place at the grass roots, where mentors help young advisors turn imposing challenges into career milestones.

To further explore the trends, Financial Planning reached out to black and African-American advisors for their stories about entering and learning to thrive in the wealth management profession, and for the advice that they have for young minority advisors seeking to join the business.

“The more people see diversity in the workplace, [the more it] will mean to kids who haven’t seen this as a path for themselves,” says Kobby Okum, an advisor at Edward Jones in Leesburg, Virginia.

Please scroll through for his and other stories.

Allan Boomer
Now 40, Allan Boomer got his first taste of the financial planning business when he was just 18, during an internship at a Merrill Lynch’s facility where client statements were printed.

“Really, it was the mailroom,” Boomer says, laughing.

But the internship program, which was designed to give young minorities an entryway into the corporate world, was what enticed Boomer into the wealth management profession,

While studying at Morgan State University in Baltimore, he continued to intern with Merrill Lynch, and took a job as a supervisor with the company upon graduation. He landed his first position as an advisor at Goldman Sachs in 2004.

For some newcomers, it can be daunting to choose a career where you’re surrounded by wealthy people, says Boomer, who also has an MBA from the NYU Stern School of Business.

“I personally did not come from a wealthy background,” he says. “I didn’t have friends who did either.”

“But that’s what intrigued me about it. I wanted to know what the secrets were to building wealth, and I wanted to share those with other people,” Boomer says.

He started an independent advisory firm, Momentum Advisors, in 2012, and now his nine-member team advises on more than $300 million in assets.

Momentum has offices in Manhattan and Somerset, New Jersey, near the site of Boomer’s original internship with Merrill Lynch. “Now I own my company and I could throw a stone to my own old building,” he says.

Boomer urges new planners joining the profession to keep improving and learning. “You cannot rest on your laurels in this business,” he says.

Most important, he adds, don’t limit yourself or let yourself be limited by others.

“I think a lot of times, black advisors tend to think that they need to go after black clients. We have a very diverse book of clients: black, white, women, old and young.”

“Early on,” he recounts, “I had interviewed to become an FA with a white advisor. He told me, ‘I’ll take the white clients; you take the black clients.’ What sense does that make? Why pigeonhole me that I can only work with a certain class of clients?”

“My biggest advice is don’t look at yourself like a black advisor,” Boomer says.

“You’re an advisor. It should not matter to you that you are black. It might matter to someone else, but it should not matter to you.”

Tony Barrett
Fresh out of college and trying to build a book of business in a place far from home, Tony Barrett says he struggled against a seemingly insurmountable obstacle: his own fears.

“I was scared to death to get in front of people, because for the first time in my life I felt like a minority,” says Barrett, who began his career in the early 1990s in Richmond, Virginia — a Southern city with little in common with his native Toronto.

“I had never felt that before growing up or in college. Now I was living in Richmond, and I felt like a minority and it wasn’t cool at all,” he recalls.

With little success, Barrett concentrated his efforts on attempting to find clients in the black community.

“I had no confidence in my ability to get in front of largely older, white investors in the South. So I did no social networking initially, no seminars, even though I had public speaking training,” he says.

The timely intervention of his branch manager helped him turn things around.

“He said, ‘The only color you need to be worried about is green. Your business planning should not be centered around the color of their skin, it has to be centered on whether they are a good client for you,’ ” Barrett remembers.

Barrett is now a Philadelphia-based complex manager and has one piece of advice for young advisors: Everybody faces difficulties in this industry.

“Any success I’ve been able to achieve has nothing to do with how smart I am,” he says. “It has to do with resilience. If you want to be successful in this business, you need to be resilient.”

Kobby Okum
Kobby Okum was studying to be a dentist after he met an Edward Jones advisor by chance, when he stopped at the advisor’s office to ask for directions.

The 33-year-old son of immigrants from Ghana, Okum says he had no exposure to the wealth management industry, but that serendipitous meeting set him on a different career path. Okum, a native of Appleton, Wisconsin, has been an advisor at Edward Jones for roughly a decade.

Okum loves what he does, but given the paucity of minority advisors industrywide, he admits for many it’s as if this profession is a secret. “From the outside it can look intimidating,” he acknowledges.

A lack of role models for young would-be advisors, he says, is a big part of the problem,

“The more diversity people see in the workplace, [the more it] will mean something to kids who haven’t seen this as a path for themselves,” notes Okum, who operates from Leesburg, Virginia.

Youth can also be a hindrance, says Okun, a University of Wisconsin alumnus.

“A lot of the industry does not look like me. If I am in a room with another advisor — someone who is brand spanking new, but they are 50 years old with gray hair — they will be perceived as having more experience,” he says, “because they fit the profile.”

But getting into the business is just one hurdle to overcome; growing a practice can be even more challenging. Reflecting on his experiences, Okum says that the work can be mentally demanding.

“This is such an emotional job. You have to taper down your highs and taper down your lows,” he says.

Okum also suggests younger advisors seek out mentors and role models to emulate. And he emphasizes the importance of maintaining the discipline to keep at it, again and again.

“It’s hard to believe that something that isn’t working is going to work,” he allows. “It’s a faith business in the beginning. You have to believe.”

But, most important, Okum says he wants industry outsiders to see this profession as open to them. “My whole dream is that people will read this and think, ‘This is not out of my reach.’ ”

Jason Bowles
Of the roughly 30 entrants in advisor Jason Bowles’ training class 17 years ago, only five survived in the industry, he says.

“I was fortunate in that I had a manager who really believed in me,” the 48-year-old Edina, Minnesota-based advisor says. “I think regardless of race you need to have an advocate on your side. You need someone in your corner.”

In Bowles’ case, his manager provided critical encouragement and support, a necessity, he says.

“I think there is space and opportunity for minority advisors. And we need them,” he continues. “It’s not an easy job, but with passion and hard work you can be successful. It’s critical to find the right fiat with a company and a boss who will advocate and support you.”

During the course of his career in wealth management, all of it spent with RBC, Bowles says he never faced overt discrimination.

“Maybe there were people or prospects who didn’t want to work with me because of my race, but they never said that to my face,” he says.

But Bowles says that transitioning into this business wasn’t easy.

His first career was as a financial analyst at food manufacturing giant Pillsbury. When he began working as an advisor, he took a pay cut. It took about four years, he says, to reach the same level as his previous salary.

His experience has taught him that new advisors need to be flexible, Bowles says, given that there is no single recipe for success.

“There are 35 people in my office,” he notes, “and they’ve all built it differently.”

The most critical thing, he adds, is to have commitment.

“What drove me was that I had a passion for it,” Bowles says. “Yes, it’s potentially a good way to make a living, but you have to enjoy sitting down and working with people on their financial lives — blue, green, white or black, it doesn’t matter. If you don’t have that, it’s going to be very difficult.”

Ted Reid
Joining the business just before the 1987 stock market crash, Ted Reid’s career endured a rough start. His tender age didn’t help any either. “I had a very difficult time. I was 21 years old, and I looked like I was 15,” he recalls.

Reid, who has been with Morgan Stanley and its predecessor firms for nearly 31 years and has been involved in the firm’s multicultural leadership summit, says he failed at first to make inroads with his attempts to break into various niche markets: first architects, then engineers, followed by auto dealers and franchise owners. “I realized I had nothing in common with them, so it didn’t work,” Reid recollects.

By chance, however, he began attracting professional athletes as clients through connections he had made via his former roommate, a one-time NFL player.

“While I was searching for a target market, I was spending all this time with these ball players and helping them without thinking that they could be my target market,” says Reid, who’s based in Marlton, New Jersey.

By 1991, his practice had turned a corner, and other advisors turned to him for advice when they struggled.

Six years later, Reid decided to take a broader approach to offering his advice.

“I went to my manager and said, ‘I want to hold a meeting for all the African-American brokers in this region, and I will talk about some of the challenges I faced, but, most important, about how not to see being an African-American as a disadvantage,’ ” Reid recounts. My manager said, ‘There’s a restaurant downstairs in this building. Here’s my credit card. Take them all out to dinner.’ ”

Reid suggests that new entrants to the wealth management business make an effort to work with underappreciated client segments.

“Figure out what you enjoy, besides sports and entertainment, and create a niche in that space,” he says. “That is what will make you different.”

Adele Gipson
2008 would seem to be an inauspicious time to embark on a career in financial services. But Adele Gipson, who wanted a job as a planner after working as an accountant, says she had two advantages: She had years of professional experience under her belt, and she opted to join an existing firm, CPC Advisors, rather than attempt to go out on her own. “It helped to join a larger organization,” she says.

She now serves over 150 households, and having the larger team’s structure as a foundation was critical to her early success, “I started out building a book,” Gipson says, “but I had the cushion of supporting the firm’s financial planning efforts.”

Earning her CFP designation from the get-go was another key move. “As a black female,” Gipson says, “you do have to recognize that there are perceptions, whether positive or negative, that you have to overcome. I think you’ve got to recognize that. I also hold a CPA, [so] I have been able to put the technical competency to the side.”

The business can be extremely tough for young entrants, the Atlanta-based advisor says. “It’s hard because you don’t have an established network of people, unless perhaps you went to a more prestigious school, where you can leverage those kinds of relationships.” (Gipson graduated from Christian Brothers University.)

Although career changers like her can tap their existing professional networks, that’s all the more reason, she says, to get additional professional designations.

Newcomers, she adds, also need to pay heed to the psychological component of the business.

“A lot of what we do is manage client behavior,” she says. “Part of that is drawing on what they are saying, but also not saying. So it’s not just the technical, but the soft personal skills that you need.”

Gipson also suggests working with a mentor.

“Our founder was instrumental to my success. If you don’t have [that person] within your organization, find someone.”

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Mentoring Diversity and equality Training Bank Advisor Raymond James Financial RBC Wealth Management Edward Jones CFP Board