In the wake of a national racial reckoning this past summer and Black Lives Matter protests across the country, the share of CFPs who are Black or Latino
A panel of five CFPs and industry executives at this week’s Center for Financial Planning’s Virtual Diversity Summit expressed hope about upping that percentage in the future. They say a mix of advisor recruiting and onboarding strategies, along with cultural change in wealth management, could alter the persistent lack of diversity among financial advisors.
For Northwestern Mutual advisor Matt Aaron of Washington, D.C.-based Aaron Financial, one ripe area would be enabling minority and women advisors “to choose their career path” by providing team-based opportunities for new entrants rather than requiring them to “eat what you kill” by building their books on their own.
“That same person who could be a great advisor, a great rainmaker one day for you — you lost that talent as a result of pigeonholing them into this one model that you have your own interest in versus focusing on the interest of the candidate,” Aaron said.
Lauren Taylor, vice president of advisor diversity and inclusion with LPL Financial, agreed with Aaron, saying it’s incumbent upon firms to educate prospective advisors about their options.
Indeed, Taylor said that wealth management itself needs a rebranding.
“A lot of times we aren't even in the game when it comes to attracting that diverse talent, when they're making decisions on what they want to be when they grow up,” she said. “A financial advisor is not even on the radar. So we really need to get in the game and amplify that it's a viable career opportunity.”
Better cultural understanding within firms and among professionals of all backgrounds could also help boost the appeal, according to Santa Monica, California-based advisor John Eing of Abacus Wealth Partners.
Eing, who is Korean American, shared the story of discussing some “really major cultural baggage” with Abacus President J.D. Bruce.
“Because of my upbringing, there are going to be times you're looking at me to just take the lead, and I'm just going to sit there,” Eing said. “Not because I don't have ideas, not because I don't know what to do. But I'm looking for you to give me that thumbs up. And I can tell you, a year later, the story literally changed the dynamic of our relationship.”
Eing’s point applies to clients as well, added Rodolfo Rodriguez, vice president of diversity and inclusion at Ameriprise Financial.
“I've spent a lot of time understanding diverse segments in multicultural marketing,” Rodriguez said. “Really having that cultural appreciation and awareness and targeting your strategies for your clients to respect the unique relationships that they might have with family and money, I think is so critical.”
Advisor Elaine King of the Family & Money Matters Institute said her client base in North Miami, Florida, which includes families with roots in Colombia, the Dominican Republic, Mexico and Peru, illustrates the need among advisors to appreciate such subtleties.
“They're not all the same; they are different because each family is different,” King said. “The more we know about the multicultural and diversity [factors] and how that plays into the money planning, the better financial planners we can become for the future.”
