10 stories about race, diversity and inclusion from Black History Month 2022

February 27, 2022 3:54 PM

For Dawn Harris, the momentum and awareness she feels surrounding matters of race and inequality in the financial services industry is at an all-time high.

Harris — a veteran DEI professional who now serves as director of diversity & inclusion for the CFP Board’s Center for Financial Planning — said that kind of energy has been lacking in the world of wealth management for a long time.

But change is in the air. And if we work together, she believes everyone in the industry may soon be able to enjoy a more welcoming, inclusive environment.

“Everyone is in a different place … but you can feel the energy in the enthusiasm,” Harris told Financial Planning earlier this month. “I think for me, it's just exciting to have this conversation and have it be elevated.

“It speaks to everyone's personal commitment to this work that people are continuing to delve into this, ask questions, do research and challenge the profession. So I am humbled to a degree by all of the smart brains that are addressing this issue and excited to be part of this effort.”

Industry News

11 stories about race, diversity and inclusion from 2021

December 30, 2021 6:00 AM

Throughout Black History Month, the Financial Planning team has covered efforts by Harris and others committed to change.

Scroll down to see some of this month’s highlights focused on topics we will continue to shine a light on throughout the year in an effort to measure success, point out areas that need improvement and hold decision-makers accountable.

Onyx and Advisor Circle offer free attendance to Future Proof Festival, launch #RiseTogether campaign

Emlen Miles-Mattingly and Dasarte Yarnway, the men behind the Onyx Advisor Network, continued their efforts to support underrepresented financial professionals by announcing a partnership with Advisor Circle that will send some advisors to the upcoming Future Proof Festival for free.

It’s happening as part of the #RiseTogether campaign that runs from Feb. 1 through March 31 to coincide with Black History Month and Women's History Month. During this time, any attendee who registers for the Future Proof Festival will be able to offer an underrepresented industry colleague a complimentary ticket to the event.

Each paying attendee who extends a complimentary ticket will then be entered into a raffle to win a three-night stay at Hyatt Huntington Beach during the conference. Future Proof is slated to take place Sept. 11-14 on a half mile of beachfront in Huntington Beach, California.

Independent wealth managers take aim at representation challenge

The Financial Services Institute, which counts 90 firms and 30,000 independent financial advisors among its membership, and Inroads, a 51-year-old organization, are joining forces to start paid internships in corporate offices in an effort to increase the number of women and minorities entering the field.

The partnership comes after FSI CEO Dale Brown pledged to embark on a “journey” toward boosting representation of advisors and executives who are women, Black, Latino and/or members of other minority groups.

Inroads CEO Forest Harper said the internship organization has “a talent pool” of more than 5,000 students of diverse backgrounds who are ready to start this summer “either in the home offices or out in the field with entrepreneurs.”

Merrill division head who defied statistics aims to lift industry’s barriers

Merrill Mid-Atlantic Division Executive Craig Young spoke to Financial Planning Chief Correspondent Tobias Salinger about his desire to help the next generation of professionals who represent the potential of wealth management.

Young, who grew up hungry and homeless for a time, broke into the industry more than a decade and a half ago as an advisor, eventually moving into management and joining Merrill in 2015. In December, Merrill appointed Young to lead the region covering 15 markets in five states and the District of Columbia with 3,200 employees and $2.3 billion in annual revenue. He credits his late mother for instilling him with the perseverance and values that led to his success.

During the conversation, Young talked about the people who inspired him and how the industry can support more success stories like his in the future.

Done right, racial equity investing can dismantle oppressive structures

During a webinar hosted by the Croatan Institute as part of its “Redirecting Capital to Accelerate Racial Equity” series, the nonprofit research organization brought together four fixed income practitioners to discuss how investing can make a difference in underrepresented communities.

Topics covered include the differences in fixed income opportunities offered through public and private debt options; the lack of access entrepreneurs of color have to non-extractive forms of finance; and private fixed income strategies that incorporate explicit racial equity considerations.

Ariel expands into new fields as an industry pioneer and force for change

"The fee compression is real," said Ariel Investments CEO John Rogers.

Ariel Investments — the Chicago-based asset manager led by co-CEOs John Rogers and Mellody Hobson and the first Black-owned mutual fund company at its launch in 1983 — is expanding into new territory via collaborations with Charles Schwab, Vanguard and JP Morgan Chase.

At the same time, Rogers continues to be an outspoken advocate for boosting the low share of assets allocated to asset managers owned by women and minorities. His efforts drew the attention of the House Financial Services Committee’s Subcommittee on Diversity and Inclusion, which released an unprecedented study in December tracking the workforces and practices of 28 major firms.

CFP Board report highlights best diversity and inclusion practices

In mid-February, the CFP Board’s Center for Financial Planning published a new thought leadership report that aims to serve as a resource for those committed to greater diversity. The 69-page document, titled “Metrics That Matter,” is a compilation of five articles written by industry pros and academics covering best practices when incorporating metrics into DEI work.

Included in the report are articles from Ella Bell Smith of Dartmouth College; Stefanie Johnson of the University of Colorado; Crystal Cox and Laura Barry of Wealthspire Advisors; Lisa Shalett, Emily G. Thomas, Adriane Parris, Steve Edwards and Emily M. Feczko of Morgan Stanley; and Rachel J. Robasciotti of Adasina Social Capital.

The articles focus on topics like self-awareness when establishing leadership metrics, creating a framework for DEI metrics, what a firm’s diversity efforts look like from the inside, monitoring progress and reevaluating due diligence processes through a DEI lens.

Citigroup says it exceeded goals for boosting management diversity

Citigroup leaders announced that they have exceeded targets to increase the percentage of women and Black executives among the company’s ranks.

Black employees in the U.S. now make up 8.1% of managers in roles from assistant vice president to managing director, surpassing an 8% target and up from 6% in 2018, when the firm first set the goal, according to Sara Wechter, head of human resources.

Globally, the share of women in those roles increased to 40.6% from 37% in 2018.

Which traits inspire trust in a financial advisor? Black or white, male or female?

A recent study analyzing the correlation among gender, race and trustworthiness in the financial services industry found that race doesn’t play a significant role in how much clients trust advisors. But women garner more trust than their male counterparts.

The research, led by CFP and Texas Tech University assistant professor Miranda Reiter, presented Black and white respondents who had no history of working with a financial advisor with a hypothetical money-management scenario. After inheriting an imaginary $250,000, the respondents were given one of four financial planner profiles: a white man, a Black man, a white woman or Black woman and asked to rate their trust in those planners.

For individuals worried about their backgrounds impacting success in the industry, the results were encouraging. Advisors also spoke to Financial Planning about what findings like these could mean for the rest of the industry as firms work to improve.

How to boost benefits enrollment among Black and Hispanic employees

In a webinar held by the Employee Benefit Research Institute, experts said advisors and employers seeking to boost enrollment in retirement plans and benefits among Black and Hispanic workers must first change how they engage with them.

To boost the low levels of financial literacy and significant wealth disparities among historically excluded groups, employers should drop the traditional approach to workplace financial education. Instead of stock market tutorials, they should host discussions of how their employee benefits tie into Social Security. Instead of holding a meeting about long-term retirement planning, they should create one about building financial independence.

“It's the same concept, but it means something different,” said advisor Lawrence Smith of Dallas-based ELS Vision Wealth Management. “And that concept actually came from listening to African American participants and Hispanic participants about what are their concerns and what do they need, so that we can then have different topics.”

Frank Paré talks diversity, institutional change and those sensitivity training videos

Among the just 1.8% of certified financial planners who identify as Black or African-American, Frank Paré is considered a thought leader and repository of historical knowledge about the emergence and evolution of diversity, equity and inclusion issues in the wealth management industry.

The 58-year-old started as a stock record clerk at Charles Schwab in San Francisco in 1990, handling customer documents in storage vaults. Then he shadowed traders on Schwab’s equity trading desk, later becoming a compliance analyst for the discount brokerage. In 2001, he became the head of compliance at wealth management firm Loring Ward.

But in 2006, he struck out on his own as the president and founder of PF Wealth Management Group in Oakland, California, a boutique firm with $11.7 million in assets under management that targets mass affluent and high net worth clients in the San Francisco Bay area and beyond.

Financial Planning spoke with Paré about the progress the industry has made, and the work that still remains.