11 stories about race, diversity and inclusion from 2021

December 30, 2021 6:00 AM

Like many other industries, the world of wealth management has spent the past 12 months tackling diversity and inclusion (somewhat) head-on after generations of sidestepping the conversation.

Built on promises by industry leaders in 2020 to provide opportunity and plant seeds for a more inclusive environment in the years to come, new initiatives were launched in 2021 with the goal of attracting and retaining diverse talent.

But with every new DEI announcement, the sobering reality of the industry’s lack of progress became evident, be it in the form of data highlighting how few women and minorities ascend to the highest rungs of the biggest firms, or advisor activity barring Black applicants from consideration, these moments remind everyone how much work still needs to be done.

Scroll down to see how the Financial Planning team has covered matters of race, diversity and inclusion in 2021.

CFP diversity is on the rise. Is it sustainable?

Photo by Jeffrey Sauers, commercialphoto.com

The CFP board started the year with good news:

The CFP ranks were slowly becoming more diverse.

More than 400 Black and Hispanic financial planners received the CFP certification in 2020, according to data from the organization.

Overall Black and Hispanic representation among CFPs rose to 3,688 from 3,274 in 2019, representing a 12.6% year-over-year increase. The CFP Board has reported two consecutive years of such growth, 12.6% for 2020 and 12.3% for 2019.

Despite the improvement, the numbers are still low. Fewer than 1.7% of CFPs are Black, and fewer than 2.5% are Hispanic.

Black advisors’ fight for “dignity” could foster industrywide change

Felicia Slaton-Young

In March,

Edward Jones agreed to pay a $34 million settlement

after Felicia Slaton-Young and two other financial advisors alleged that the wealth manager cut off Black registered representatives from career advancement. The lawsuit represents a class of advisor employed by the firm from 2014 through 2020 whose career opportunities allegedly were limited by a systemic climate of racial discrimination.

Slaton-Young discussed the case publicly for the first time in

a May interview with Financial Planning

, saying the settlement offers hope for systemic change as much as a reminder of how far wealth management has to go.

“I didn’t walk into this thinking I would walk away rich; I walked in wanting to prove that my experience wasn’t a fallacy or dream,” Slaton-Young said. “I’d never been so broken before. I’d never felt like such a failure before and questioned every decision that brought me through the doors of Edward Jones. I needed to fight for my dignity back.”

FINRA chair wants more accountability on diversity, ESG

Patrick T. Fallon/Bloomberg

This spring, FINRA Chair Eileen Murray said she expects that the most successful firms will be staffed with more diverse, tech-savvy and socially conscious advisors.

During the regulator’s annual conference

, Murray said she is passionate about advancing diversity and inclusion in the industry, recalling that when she was starting out in the field, women held just 0.5% of the leadership positions. One recent estimate put that figure at just under 22%.

"I don't know whether to cry or do the happy dance, because it's certainly not enough progress, and there are other forms of diversity we need to continue to make progress on," Murray said. "Fifty percent of people we hire are women, and yet when you go up the ranks that dwindles dramatically, and I think part of that has to do with inclusion — how do you make people from diverse backgrounds feel included in the environment and bring their authentic selves to work?"

J.P. Morgan Wealth Management launches HBCU scholarships

Bloomberg News

After pledging to spend $30 billion to advance racial equity and hire 300 Black and Latino financial advisors in the next five years,

the wealth management arm of J.P. Morgan announced a collaboration

with the United Negro College Fund to meet both goals. The J.P. Morgan Wealth Management Scholarship Program will provide 75 sophomores with $2,000 toward 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.

J.P. Morgan was among the 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 following the murder of George Floyd in May 2020.

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.

Advisor who allegedly said ‘no Blacks’ is fired from LPL

Cure and Associates

Eileen Cure, an advisor who allegedly told staff she will not hire Black applicants, was

terminated from LPL in August following an internal investigation.

It started when Denise Bradley, who goes by auntkaren0 on TikTok, identified a "racist of the day" on the popular video-sharing platform. Bradley featured Cure after she says Cure's staff forwarded images of the Skype comments to her.

Bradley alleged that Cure told staff in a Skype message

: “I specifically said no Blacks. I am not a prejudiced person but our clients are 90% white and I need to cater to them. That interview was a complete waste of my time, please don't second guess me or go against what I ask. Listen to me and give me what I ask for, please.”

In the TikTok videos, Bradley alleged Cure made retaliatory statements, threatening to not approve CPA internship credit hours if staff resign. A spokesperson for LPL said: “Following our process for review of advisor conduct, Ms. Cure is no longer a client of the firm.”

How many non-binary advisors? CFP Board is now counting

Scott Wenger

The CFP Board introduced a non-binary gender option

for current certificants and future applicants in April in an effort to be more inclusive of individuals who don’t identify as male or female.

The update allows advisors to “indicate non-binary gender and/or Mx. prefix in their CFP Board records,” says the board. The CFP Board will also begin including this data in its annual demographic report and releasing it in its annual milestone numbers announcement, according to the organization.

Asian American advisors share hopes for the future after a season of hate

As part of Financial Planning’s

36th annual IBD Elite study

, 20 Asian American advisors and industry professionals discussed their hopes for the industry's future after a period marked by hate and violence directed toward Asian Americans during the ongoing pandemic.

Some advisors and professionals rejected the notion that they have been subjected to any discrimination in the industry, while others expressed frustration about being stereotyped as a “model minority” while fearing for the safety of loved ones.

Wealth managers seek to sponsor Black advisors, not just mentor them

As large wealth managers tried to address the lack of diverse leadership within their firms, some began embracing sponsorship over mentorship to boost the number of Black senior leaders and other minority executives.

During a September 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. The industry leaders said sponsors going beyond being merely mentors could be instrumental in retaining the talent and driving the numbers higher.

Only 3% of executives, senior officials and managers in the industry were Black in 2018, compared to being 13% of the overall workforce.

Ibram X. Kendi says antiracism can solve wealth management’s diversity issues

Author, activist and MacArthur Fellow Ibram X. Kendi stopped by the annual CFP Board Diversity Summit in

November to help wealth management solve its diversity problem.

Regarded as a leader of the antiracism movement — a reputation powered by his New York Times bestseller,

“How to be an Antiracist”

— Kendi and CFP Board Managing Director D.A. Abrams sat down for a virtual fireside chat about the country’s racial awakening in 2020 and the role financial planners can play in the pursuit of progress.

When it comes to building a more diverse industry, Kendi said, leaders should start by taking action, or else nothing with change.

“Historically, when we look at people who have changed their minds, particularly on race, it's been more likely for them to change their mind after a policy had been instituted and once they begin to realize that this new law is actually not going to harm them,” he said.

Asset managers’ gender and racial data draws Congressional scrutiny

Bloomberg News

Countless firms made racial equity statements in 2020 as calls for change grew, but few of the largest asset managers have actually committed to greater representation of women and minorities.

Just five out of 28 of the biggest names in asset management have pledged to boost the diversity of their workforces, only three firms vowed to alter their procurement practices to work with more businesses owned by women and minorities, and a single company promised more representation on its board,

according to a report released Dec. 6 by the House Financial Services Committee’s Subcommittee on Diversity and Inclusion.

Committee Chair Maxine Waters, a Democrat from California, and Subcommittee Chair Joyce Beatty, a Democrat from Ohio, requested the data in March from 31 firms with at least $400 billion each in assets under management and a combined $47 trillion.

After a 2019 study from the Knight Foundation

found that women or minority-owned firms manage less than 1% of AUM in asset management and the Black Lives Matter protests following the murder of George Floyd last year, the metrics offer a reminder that any long-term change remains elusive or in its very early stages in the industry.

Advisor duo plans launch of new network to boost underrepresented planners

Dasarte Yarnway and Emlen Miles-Mattingly ended 2021 by

announcing the creation of the Onyx Advisor Network

, a community for people of color, women, members of the LGBTQ+ community and other groups who have been historically largely excluded from the financial services industry.

Yarnway, founder of Berknell Financial Group, and Miles-Mattingly, founder and CEO of Gen Next Wealth, said they noticed at a recent industry conference that out of nearly 1,000 advisors, they were about the only two Black men in the audience. They want Onyx to change how the room looks in the future by providing members discounted access to compliance tools, asset custody services, business development resources and technology.

“That feeling of belonging is one that is not present within the industry, and it’s one we want to change,” Yarnway said. “It’s been like that since I’ve been in the industry and I’m sure well before that. We don’t want an advisor to walk into a conference and feel like an anomaly or feel like they can’t speak about their experiences.”