Promises made: Have wealth management firms lived up to pledges made in the wake of George Floyd’s murder?

Demonstrators Gather Outside Columbus City Hall

Rachel Robasciotti said when she talks about issues of diversity, equity and inclusion in 2022, she captures more ears than she did just a few years ago.

Robasciotti — founder of impact investment firm Adasina Social Capital and co-creator of the Due Diligence 2.0 Commitment — is one of many financial professionals who have been pushing for change from the moment they entered the industry.

But as fatal police encounters and protests pushed the nation to the brink in summer 2020, open conversations about barriers that have been in place for generations began to flow throughout the world of financial services.

“What happened when George Floyd was murdered —and I always want to say he did not get up that day thinking I'm going to be a martyr. He didn't want to be a martyr. But what has changed since then is the kinds of stories that I was telling about my experience as a queer, Black woman in one way or another have just gotten more and more amplified,” Robasciotti told Financial Planning while discussing the diverse group of speakers that will share the stage with her this fall at the upcoming Future Proof Festival.

“I was telling the same stories, but the volume on the mic has just been turned up, and that feels really important to me. But I also hear from lots of other people from marginalized groups within financial services how important it is to hear our stories spoken,” she continued. “Simply because we're underrepresented doesn't mean that we aren't here, and people listening to what it is that we have to say has already started to make major movements in the investment industry.”

Following the death of Black Americans like Floyd, Breonna Taylor and Ahmaud Arbery in 2020, the nation experienced a societal awakening and a fervent call of change. That heightened awareness ushered in a number of promises and pledges from industry leaders to make things better.

Scroll down to see how far some of those promises have gone, and efforts that the Financial Planning team continues to keep an eye on.

Justin L. Mack, Tobias Salinger, Lynnley Browning, Ryan W. Neal and Janice Kirkel contributed to this report

CFP Board keeps pledge to provide statistics

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Photo by Jeffrey Sauers, commercialphoto.com
In June 2020, the CFP Board provided Financial Planning with precise numbers showing the number of Black and Hispanic CFP pros in the industry for the first time. At the time, board leaders also promised to make figures available on request moving forward.

A year and half later, the CFP Board kicked off 2022 by not only celebrating the most diverse class of new certificants ever, but by announcing that the organization will release racial and ethnic data on a monthly basis with a broader set of categories.

The total number of Black and Hispanic CFP professionals climbed to 4,196 in 2021 — a 13.8% increase and nearly four times the growth rate of all CFP holders, according to the new data. But leaders see all the work that still needs to be done as just 1.8% of all CFPs are Black and 2.7% are Hispanic.

“We have nothing to brag about with fewer than 2% Black CFP professionals. But we are all committed to making the numbers known, and we're putting ourselves out there. And it's a practice I think more firms should follow as well,” CFP Board CEO Kevin R. Keller said.

Read: How many Black planners? CFP Board will answer upon request

Read: CFP Board celebrates biggest, most diverse class as numbers climb past 92,000

UBS launches multicultural client segment

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Melinda Hightower, head of the multicultural investors strategic client segment with UBS Global Wealth Management
UBS
Less than a year after bringing in former JPMorgan banker Melinda Hightower to help attract more diverse advisors, the UBS Wealth Management USA Multicultural Investors Strategic Client Segment launched in late January under her direction. It offers the firm’s roughly 6,200 financial advisors research, access to new racial equity investing products and discussion guides for prospects who are Black, Latino or Asian American and have at least $1 million in investable assets.

Hightower said the new program joins existing programs aimed at women, business owners, rising generations, and athletes and entertainers. She told Financial Planning that more information would be available in coming months about the racial equity investing products coming to UBS, along with insights from polling her team has conducted with the client segment it estimates to be between 1 million and 2 million Americans.

Hightower also believes that advisors of all backgrounds can make the experience better for any client by seeking more engagement beyond their traditional bases. The company’s goal isn’t to build a silo for certain people.

“It's something that's important to anyone for whom inclusion is important,” Hightower said. “In order to remain relevant, financial institutions should really take note and work to be as inclusive as possible.”

Read: UBS hires ex-JPMorgan banker to attract more diverse investors

Read: UBS tailors advisor tools for minority clients with $1M+

Elliott takes the lead for CFP Board

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Kamila Elliott, CFP Board Chair
Dean Stevenson
In summer 2020, The CFP Board took a step forward in its efforts to diversify the ranks of CFPs by electing Kamila Elliott as the organization’s first Black woman chair. Financial Planning caught up with Elliott earlier this year just days after she officially assumed the role to discuss her goals for the next 12 months.

Elliott, CEO and founder of Collective Wealth Partners, said improving industry diversity is a primary goal for 2022. Because of that, she is focused on the CFP Board’s future financial planner program. She wants to increase awareness of what it means to be a financial professional and show the positive impact it can have on underserved communities through more active engagement of the next generation.

“I didn't know what this profession was when I was in college, so one of our goals is to go into high schools and colleges,” Elliott said. “It’s about reaching out to these students now and letting them know that this is a very viable career. You can do good for yourself and do good for others.”

Read: CFP Board elects first-ever Black woman advisor as chair

Read: Kamila Elliott is ready to make history, help people as first Black CFP Board chair

FSI releases data and launches new Inroads partnership

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Forest Harper, CEO of Inroads
Inroads
A year after Dale Brown, CEO of the trade group for independent wealth managers and advisors, said the organization was taking steps to increase representation of women and minority groups in the industry, the organization has started to follow through on the promises.

Last month, FSI released what’s likely the first ever measurement of demographics in the independent brokerage channel. In addition, the organization launched a new program in collaboration with a nonprofit corporate internship and training organization for minorities.

“This is a journey that we continue with our members, and there's much work to be done,” Brown said in a statement. “We continue working with our D&I task force to provide education and resources for our members. This year, we're excited to launch our strategic partnership with Inroads. Working together with our members and Inroads, we can promote more opportunities for women and people of color within our industry and cultivate the next generation of industry leaders.”

Read: FSI on ‘journey’ toward greater industry representation for women, Black, Latino and other minority professionals

Read: Independent wealth managers take aim at representation challenge

CHIP takes off

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Changing How Individuals Prosper (CHIP) appointed 11 financial advisors and other professionals to a board that will meet each quarter
CHIP
A little more than two years since launching, the financial services marketplace for Black and Latino professionals and prospective clients has reached 250 advisors, estate attorneys and CPAs, according to CHIP founder Dana Wilson. After appointing its first advisory board last fall, the company created its own quarterly magazine, started a partnership with Lincoln Financial Network’s African American Financial Professionals Network and adapted forms for journalists and conference organizers to contact members for quoting and speaking purposes. Its future plans include more collaborations with wealth managers like Lincoln to set up specific company pages on CHIP’s website and expanding further into real estate and insurance professions, according to Wilson.

After the racial equity pledges of many financial companies in 2020, it’s important for the industry to keep it “top of mind,” she said. “It doesn't always have to be this year-long look.hat can we do right now?” Wilson said. “It's constantly holding them accountable, making sure that we are seeing the changes.”

Read: Black and Latino financial network launches board to guide rapid growth

Corporate Call to Action

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The Ford Foundation and Connecticut Treasurer Shawn Wooden, a Democrat who is trustee of the state’s $47 billion worth of pensions and other retirement plans, launched the Corporate Call to Action: Coalition for Equity & Opportunity in May 2021 in collaboration with 18 financial firms.

Bank of America, BlackRock, UBS, Morgan Stanley, Citi, Goldman Sachs, Invesco, TIAA and State Street Global Advisors signed on among the inaugural group of members pledging to release more data metrics, provide career opportunities for 10,000 Black or Latino students annually and bulk up contracting with minority-owned businesses.

“Members of the CCA, in partnership with Connecticut’s Office of the Treasurer, the Ford Foundation and the Hartford Foundation for Public Giving, are working to formalize a joint collaboration,” Pedro Zayas, a spokesman for Wooden’s Office, said in an emailed statement. “While this work is underway, members of the CCA continue to make progress on their own organizational work to advance racial equity.”

J.P. Morgan, PNC, Northern Trust on goal promote more Black and Latino executives J.P. Morgan, PNC, Northern Trust on goal promote more Black and Latino executives

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During a panel discussion at the Association of African American Financial Advisors’ Vision conference in 2020, executives from J.P. Morgan Chase, PNC Financial Services Group and Northern Trust pledged to hold regular meetings on how to advance diversity and inclusion in financial services.

PNC has since launched a Diversity Trends tool for managers to get a view of hiring trends and where improvement can be made. The firm has established a Black Leaders forum and Unidos for Black and Latino leaders to improve recruitment, retention and promotion of diverse talent. PNC also says it engages employees in conversations about how it can be a more inclusive company.

In 2021, J.P. Morgan Wealth Management launched an HBCU scholarship program in partnership with the United Negro College Fund to award 375 scholarships through 2025 to build a more diverse talent pipeline. In 2022, the firm expanded the number of universities eligible. The partners hope to more than double the number of scholarships granted in 2021. Of last year’s 90 applicants, 36 scholarships were awarded, which was half the targeted number. The firm also hosted its first investing forum for Black and Latina women in 2021 and says it is committed to hiring 300 Black and Latino advisors by 2025.

Northern Trust increased target commissions on equity trades executed through minority brokers in certain commingled funds from 10% to 15% in 2021. The firm says it is holding senior leadership accountable for driving diversity, equity and inclusion, and has equipped them with a dashboard to track and assess hiring, retention and promotion metrics each quarter. The company has a listening circle for Asian American and Pacific Islander employees to share experiences with discrimination, and CEO Michael O'Grady held a Juneteenth panel discussion with Black senior leaders. The firm’s Latin business resource council held a virtual learning series for employees’ career plans and has an ongoing podcast series for helping women employees. In Northern Trust’s alternatives business, 50 South Capital Advisors, 32 of 48 interviews were with diverse candidates, who made up 60% of acceptances. Northern Trust also established a partnership with HBCUvc, a venture capital organization that works with HBCUs and Hispanic-serving institutions to provide internships at fund managers.

Read: JPMorgan Chase jump-starts applications for HBCU scholarships after slow first year

Read: How JPMorgan, PNC, Northern Trust aim to promote more Black and Latino executives
Betterment robo advisor IAG
Progress we’re still tracking 
In June 2020, former Betterment CEO Jon Stein sent a letter to customers pledging that it would “advocate for our Black colleagues, friends and fellow citizens.” The digital advice company also evaluated diversity within its own staff and published the information on its website, acknowledging that it has more work to do on improving diversity.

Betterment said this month it is currently finishing up a review of 2021 to present internally at the company and plans to publish updates on its diversity updates in a blog post.

In September, Financial Planning covered a panel discussion at the Association of African American Financial Advisors Vision conference where executives from Morgan Stanley, J.P. Morgan Wealth Management, Citi and Stifel explained the importance of not just mentoring Black advisors, but sponsoring them, actually acting on their behalf.

Financial Planning went back to those firms this month to ask what steps had been taken to advance the cause of diversity among advisors. Stifel did not respond to an email requesting comment and Morgan Stanley declined to comment.

David Poole, head of Citi’s U.S. Consumer Wealth Management division, said during the panel that the bank was changing its approach to mentoring. Since then, the division has created a D&I forum to develop critical skills needed for career success. In line with Citi’s firm-wide diversity goals, participants of the forum will be mainly women and ethnically diverse colleagues.

J.P. Morgan Chase replied by saying it has "three major initiatives to support and sponsor Black advisors." Among them are the J.P. Morgan Wealth Management Black Leadership Forum, which involves forum members meeting with top senior leaders monthly to advocate for Black advisors and recommend enhancements to company culture and business practices.

Spokesperson Jami Tanner said the firm’s Diverse Advisor Experience Team has been around for about two years. The team recently introduced one-on-one coaching for diverse advisors and leadership courses designed exclusively for Black leaders in J.P. Morgan Wealth Management.

Finally, J.P. Morgan Wealth Management will host its inaugural, two-day Black Advisor Summit in April. Using feedback directly received from Black advisors, The Black Advisor Summit will offer professional development sessions for Black advisors at J.P. Morgan Wealth Management and help them build their practice and network with key business partners.

Read: What Betterment’s diversity data says about the firm, and the industry

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