COVID-19 intensifies need for more diversity among advisors: CFP Board chair
The ongoing economic impact of COVID-19 has resulted in historic unemployment and financial losses to individuals across the United States — with the pain disproportionately born by Black and Hispanic Americans.
CFP professionals are in a unique position to help those Americans. But first, our organization must fully realize our vision of building diverse, equitable and inclusive workplaces where all CFP professionals feel heard, welcomed, supported and valued.
This vision — one whose urgency has been highlighted by the worldwide pandemic and the racial issues in our country — is crucial to ensuring that every American has access to competent and ethical financial planning advice. While our work seeks to financially empower everyone living in the U.S., we have been especially intentional in supporting underrepresented groups who have been historically excluded from acquiring generational wealth. To that end, five years ago, CFP Board launched the CFP Board Center for Financial Planning with its unique mission: to "create a more diverse and sustainable financial planning profession." The opportunity to help improve others’ understanding of their personal finances and expanding access to financial services in underserved communities are two benefits of the profession, according to the Center’s report, Racial Diversity in Financial Planning: Where We Are and Where We Must Go.
Diverse communities are growing in this country, according to Pew research. By 2045, the U.S. will not have a single ethnic or racial majority. By contrast, at the end of 2019 only 3.8% of CFP professionals were Black and Hispanic. That number is growing: In 2017, they comprised less than 3.5% of our number. And at the end of 2019, the growth rate of this group was 12%, which is more than three times the growth rate of all CFP professionals for that year.
According to 2018 Center research, CFP professionals of all backgrounds describe their careers as challenging (74%), but emotionally rewarding (65%) and financially rewarding (59%). While the majority of CFP professionals are “very likely” to recommend financial planning to others as a career choice (56%), Black CFP professionals are most likely to do so (68%), with Hispanic CFP professionals following closely at 59%.
Still, to achieve the Center’s mission of creating a more diverse and sustainable financial planning profession, more work needs to be done.
What makes successful diversity and inclusion programs work is authentic commitment from leadership; when those at the top of the organization are dedicated to the cause, the rest of the organization is likely to be loyal to the initiative and ensure its success. That is why I am so proud that CFP Board’s board of directors elected CFP Kamila McDonnough as our 2021 board chair-elect. McDonnough is the first Black woman to hold this role.
Beyond increasing diversity and inclusion being the right thing to do, diverse organizations are also more attractive to both potential employees and clients. Diverse firms better retain employees because they are more satisfied. Diversity also enables creativity and innovation firmwide because a diverse environment pushes people to reconsider their preconceived notions, driving people to work harder to achieve solutions.
The country is at a crossroads. CFP Board stands in solidarity with CFP professionals of all backgrounds, and every CFP professional who has been and is on the forefront of this fight for equity and justice.
We see you, and we thank you.