Chelsea Ransom-Cooper was in her mid-20s when she became a certified financial planner, pivoting from a career as an accountant.
With her new credential, she "had all the bells and whistles," but the next step felt daunting.
"It's hard for me to go and talk to a 60-year-old white guy and tell him, 'hey, come and invest with me,'" she laughed. "I know I have the technical knowledge, but there's still a barrier. How do you build that trust?"
She considered joining a big firm, and looked around at the wirehouses and broker-dealers. But ultimately she heeded a mentor's advice to stay true to her roots and join an RIA, where she could operate on a fee basis and help families like her own with planning and wealth accumulation without the distraction of cross-selling products.
Today, Ransom-Cooper is a managing partner and the director of financial planning at Zenith Wealth Partners, a Black-owned RIA in Philadelphia. She still sees many young advisors who look like her and don't feel that they have the support they need to succeed in a business that has historically excluded them and many other groups.
The percentage of new certified financial planners considered "racially and ethnically diverse" grew by 8.5% this year, in a modest sign of hope for the industry. The total number of women planners also squeaked up to 23.6% from 23.4% the year before. These results set new diversity
FP spoke with Ransom-Cooper about how wirehouses and big broker-dealers, which say they're laboring to improve diversity, can actually make those initiatives count for diverse talent.
This interview has been condensed for length and edited for clarity.
FP
Your colleague
Chelsea Ransom-Cooper
I think my sentiment does mirror hers. We have to look at, number one, why firms of color or why individuals are leaving or potentially not even looking at wirehouses as an opportunity. And why firms aren't connecting with them, regardless of potential diversity efforts that are being made. I think the most challenging aspect is always equity and inclusion.
You can have a diverse workforce, but how are you making sure that things are equitable? Are you making sure that they feel [supported] on their sales metrics that require business development, or just overall key performance indicators that they need to reach?
For myself, I did not come from wealth. So for me to have some of those metrics, of bringing in or having conversations with certain types of individuals when they're not even in my ecosystem, it's kind of a non-starter, even though I know I can get the opportunity and because I'm a diverse candidate who is excellent.
How would I know I will be supported? And that I would be set up in a way that I would truly be able to succeed, and not have the opportunity to fail?
So I think that's where it gets a bit challenging, especially when you're thinking about how can you retain diverse talent …
Our firm, Zenith Wealth Partners, wanted to fix that. We wanted to be the firm that I wish I could have known about when I graduated college, where I would have worked with people who are on their wealth accumulation journey, who just want to make smart financial decisions …
And they don't have those assets yet, because they've probably never worked with someone, but they're willing to pay a fee for it. And that's their first way of building wealth … And knowing that they have somebody in their corner who looks like them or can empathize with them, have a conversation without judgment, can really be eye-opening.
And I think if we can find a way to support individuals [at], say, our firm and Kamila's who are entrepreneurial, and willing to take the steps to empower them and probably not compete with them, we could all just work better in the financial services industry as well.
FP
It seems like in the wealth world, on both the client side and the adviser side, what you're getting at is that there's this chasm. Some are born into wealth. People from the other side of this chasm are from a community that has been historically disadvantaged, and now they're trying to serve that community.
Or even if they're not aiming at any community, they themselves might not have that built-in advantage that the industry assumes they should have, just by way of tradition.
Chelsea Ransom-Cooper
Yes, absolutely. Whenever I see young people who want to be in this profession, I can tell they have that hunger.
They sometimes feel stuck. Just because they know they are a few steps back, or they just don't have those individuals to get started. And I think really being able to focus on the technical expertise and being excellent, and not having to focus on sales will build their confidence.
So then they feel more confident having conversations with individuals to potentially get leads, and prospecting and business development. But it's hard to go and ask … And we have to acknowledge that there are biases that people do experience as they're vetting the financial professional. So how do we support individuals as they're combating that too?
I had a great manager at the time who would always be in my corner and say, 'Chelsea's excellent. You should work with Chelsea.' But not everyone gets that person.
FP
I think the wisdom of the industry is that when you've made yourself known, and you have that big name on your resume, you can later go off on your own. But how can those big employers make sure that every such person has that kind of manager in their corner?
Chelsea Ransom-Cooper
You have to include it as part of the key performance indicators for upper level management. The same way you know they have sales goals, they need to have advocacy goals and metrics that they need to stand by.
I worked at Ernst and Young before I joined this profession, and that was a big deal for those upper-level managers. 'What does your retention look like, for those entry-level up to mid-manager? How many women are you helping to get to the next phase, or moving into the higher-ups for the profession? How many people of color?'
That was crucial as part of their annual bonuses, the same way their sales goals were. Some individuals will have that natural passion and purpose. It would be nice if we all did, but we have to acknowledge that's not the case (laughs) ... Peers who work at wirehouses, I don't know if they're experiencing it yet. But I have heard from when I go to CFP Board conferences and other financial advisors that it sounds like it's something that they're trying to implement. I don't know if it's fully trickled down yet…
I think even when I go to conferences, when I see the diverse talents, I do feel as though it's mostly in these bigger institutions. They still carry a lot of the women and people of color. I think it can be a little tougher to get into the RIA space, especially from what I've heard from peers as well.
Financial Planning
With brokerage firms, you don't get to choose as much the type of business you do. But at the same time, those are the places that right now appear to be also leading the change. Because at least they're trying to make diversity pledges. They're trying to hire and promote and retain more people of color, and women. So what do you make of how they've been doing so far?
Chelsea Ransom-Cooper
So I have to say, every conference I've been to, I have seen all of the big wirehouses. They're investing money into these conferences, pouring into hiring and recruiting diverse talent. I have to give them credit for that.
Although they're doing an excellent job of recruiting and marketing — and yes, we know a lot of firms gave a lot of dollars in 2020 in the summer of George Floyd, and made a lot of promises and campaigns — I do wonder if we can see a bit more transparency into those numbers.
You have to track this and see: two years, five years, 10 years [from now]. Are we actually making progress with retention, with equity, with inclusion? Are we actually seeing our managers advocate for our employees? Those are the numbers that I just don't know yet. So I can't say they're doing excellent or not. That's probably a question for another day.
Financial Planning
How often would you say brokerages should release their diversity numbers so that the rest of the industry and the public can trust their transparency and their progress?
Chelsea Ransom-Cooper
I think they should do it the same way the CFP Board does, and I appreciate the transparency of the CFP Board. Sometimes, if the numbers aren't good, at least I know they're being honest. And at least they're open about, 'we didn't hit the numbers we talked about', but those are our ideas on how we're going to change it next.
Financial Planning
Is there anything I haven't asked you about that you would be interested in sharing?
Chelsea Ransom-Cooper
RIAs as well, I can acknowledge them in this space, but the space isn't perfect either. They're not held to the same standards. They're not publicly traded companies that are seen in the news as frequently. So they kind of fly under the radar.
How can we also make sure that the RIAs, which are seen as the more flexible option, are really holding themselves to the same standards in regards to equity and inclusion as well? Even if it's a small company of 5, 10, 20 people?
At our RIA, we have the flexibility to make changes. So right now we offer four different services: investment management, traditional wealth management, one time financial plans and consultations. But we actually had an employee who came to us and said, 'I really want to invest in Halal investing. And it's really important to my community and how we invest in that fashion. We can't have dividends or interest and we can't use that. But we want to be able to be invested.' And we were like, cool, let's look into it, and let's see how we can make this work.
I think at an RIA because you're small, you have a choice. And you can offer your employees the opportunity to run with an idea and empower them. Or you can choose to stifle them.
