Financial advisor Stanley Funches says that far too many people working in the wealth management industry know what it feels like to be "the only one" in the room.
The only person of color. The only woman. The only gay person. The list goes on.
As a Black man who has dedicated more than two decades of his life to a career in financial advice, the president of Intelus Wealth Management in Birmingham, Alabama said the ability to work through that uncomfortable feeling is something that comes with time and experience.
But Funches said the feeling never really goes away, and the composition of the room never goes unnoticed.
"We go to major conferences, and we don't see each other. We don't see another person that looks like us. And when we do, we wave across the room. There's somebody. There's another one," said Funches, an inaugural member of
Today, the industry operates in the aftermath of
Meanwhile women advisors represented nearly 30% of all new CFP professionals in 2022, a year with an all-time high of 1,519 new women planners and the most diverse class in the organization's history.
The injustice and unrest of summer 2020 sparked organizations and firms across financial services to take the lead and the spotlight on moving DEI efforts forward, and
But now, more than three years removed from the moment when the entire world stood at attention, fewer eyes are on the subject and fewer boots are marching through the streets. As time goes on, there is concern that the status quo will creep back in.
Funches said that passage of time also gives way to what he calls the "million dollar question" regarding the current state of industry DEI efforts: Is your firm truly
"That's the big question we always have. What is real? What is substantive? What was making a difference?" Funches told Financial Planning. "This is a very tough business for everyone. No matter what their race or gender or sexual orientation, this is a tough business. But you have to acknowledge that it's even more difficult for people of color who don't traditionally have a client base or even the family foundation to be able to have a net worth of investable assets.
"Statistics show that companies that are committed to diversity [and] have a more diverse workforce tend to be more profitable," he continued. "So if you're committed to being more profitable and more relevant, then what level of investment are you willing to make on a consistent basis to make sure that all advisors in your company or with your firm have the best chance of being successful?"
The DEI conversation evolves
New
Arizent's online survey, conducted in July and August 2023, polled 669 respondents across the wealth management, banking, accounting and insurance sectors about their attitudes on the progress of ongoing DEI initiatives.
The analysis also attempts to quantify the elements of a healthy workplace where all employees feel seen or valued.
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"A genuine commitment to inclusion … and thoughtfully crafted DEI policies can help companies flourish," the report states. "But simply acting isn't enough; companies also have to calibrate the actions they take around DEI efforts. Doing too much, too little or the wrong thing is just as problematic as not doing anything at all."
According to Arizent's third annual DEI study, there are a number of inclusion wins to celebrate regardless of what segment of financial services you call home. Three-quarters (75%) of all respondents believe their company has a genuine commitment to inclusion, with only small differences by industry.
This is only slightly higher than respondents indicated in 2022 (73%), suggesting that progress on DEI initiatives may not be increasing due to fatigue with the topic and competing priorities, but that commitment remains strong.
Employees at firms that are "getting it right" are more likely to report having opportunities to share input on meaningful projects and feeling comfortable enough to disagree in meetings, according to the report.
These employees also say that curiosity is encouraged and honesty and integrity are displayed at all levels of their organization. "These qualities are more likely to lead to positive business outcomes and help firms adapt to changing business conditions, as well as support a physically healthier and more productive workforce," the report states.
Separating the real from the fake
But there are concerns related to authenticity and frequency. While more than one-quarter of all employees are in favor of DEI and its priority in the workplace (28%), white, non-Hispanic men are most likely to indicate that DEI is overemphasized at the expense of merit-based staffing, and women of color are most likely to say DEI efforts can be performative.
Dawn Harris, director of diversity and inclusion for the
But the veteran diversity, equity and inclusion professional says in return, those keeping an eye on the progress need to give organizations the time to develop and the space to make mistakes.
"It's giving individuals and companies grace. No one is perfect. It's a journey. It's not the destination … and I think having that space to course correct as needed is something that is so important," Harris said. "You're not going to get it right the first time at bat. But improving and adjusting and pivoting and making sure you are receiving the input and the feedback in terms of what's working well and what isn't, what seems to be performative versus impactful."
Those discussions will be given plenty of space next month when the Center for Financial Planning's
Harris said the theme was chosen to highlight the significance of inclusion in recruitment and retention efforts for lasting organizational change.
"A lot of conversation in the current DE&I space doesn't really drill down into what any of those letters actually mean from an implementation perspective. And we thought it was very important to expand the conversation beyond diversity, not saying that diversity is not important, because it's critical," Harris said. "But once you've achieved or are working toward certain goals, the key is inclusion. Making sure that you have an inclusive work environment where different perspectives and backgrounds are welcomed and valued."
The summit will be preceded by a virtual Diversity Career Fair on Nov. 8 that will connect employers with qualified candidates, including current CFP professionals and those aspiring to be CFP professionals, with a special focus on women and people of color.
During the summit, the Center for Financial Planning will release data about the financial needs and perceptions of LGBTQ+ investors, as well as how financial planners serve the LGBTQ+ community. The center will also introduce a new thought leadership paper showcasing best practices for engaging diverse college students who are considering the financial planning profession and CFP certification.
Last year, the center published a report that aimed to serve as a resource for those committed to greater diversity in the industry. The 69-page document,
For Harris, diversity efforts with a solid implementation plan and a long-term roadmap send a strong message to new, diverse talent that may be stepping into the industry right now.
It lets new blood know that no matter who they are, they will still be welcomed with open arms years down the line as firm culture evolves and the DEI spotlight dims.
"In order to serve the U.S. population, we need to represent the population from all aspects. Not just by race, ethnicity, gender, age, neurodiversity, but the intersectionality of all of that," Harris said. "We really want to make sure that they realize that this is a viable career for them. And there is space for them."
Keeping up the momentum
With generations of being overlooked to refer to, it is sometimes difficult for underrepresented professionals to stay positive about the state of industry inclusion. Even when it seems like everyone "gets it" from the outside looking in.
Angie Ribuffo, president and financial advisor at Raion Financial Strategies in Anchorage, Alaska, said even at the height of the DEI wave a few years ago, she wondered how long it would last.
"My initial thought was, oh my God, here's the big push. I hope to God that we keep on the path and it isn't just a flash in the pan," she said. "Across industries, they latch onto something because it's high profile, and then over the course of time, it's easier to go back to what we know. And I kind of feel like right now, that's where we're headed.
"I don't know if we're there yet. But I kind of feel like … it doesn't seem to have the same focus and strength that we had in 2020."
Ribuffo added that some of that sentiment comes from having witnessed the rise and fall of equity movements in the past. She points out that long before the 2020 social justice boom, women have been pushing for pay and opportunity parity.
"So again, there's the pessimistic side of me that says, 'OK, we checked the box. Is that what we're doing?' Not to minimize in any way, shape or form the women or people of color that are in [C-suite] positions," she said. "I am just concerned that the focus of diversity, equality, inclusion and belonging is now just a word or a thought process that doesn't have quite as many teeth as it did before."
For that reason, the 15-year industry veteran does her part to keep up the momentum by continuing to have uncomfortable conversations with decision makers and advocating for everyone in the business to be their authentic selves.
Like the Arizent research points out, Ribuffo says advisors who work in environments they deem welcoming will produce better results for their firms.
That comfort is also a boon that bleeds into the all-important advisor-client relationship.
"If you're putting on the firm costume and going along with the firm culture and that's not really you, the challenge becomes sitting across from a client or sitting across from a coworker. And because you can't be your authentic self, that resonates. People feel that, and that becomes a negative as far as being able to be successful," Ribuffo said. "How do you walk that back? Because later if you try to be authentic, now they're trying to figure out which one was real."
Environment matters
Andrew Tudor, chief wealth coach at Alchemist Wealth, said that discomfort can not only make it difficult for underrepresented planners to succeed. It can drive them from the business completely.
"For the 10 years I've been in the business, I've watched very clearly some of the most highly skilled, non-traditional advisors, service professionals and financial people leaving firms," he said. "They're leaving big insurance firms, big banks. … The story is typically the same. I can do the job. The job is the job I've learned and I've been trained to do the job. But the way that I have to do the job there is not authentic. This environment is not created for me."
To stress how much an inclusive environment matters, Tudor shared a story about a Black woman who recently left a firm where she worked with ultrahigh net worth clients.
"She was highly valuable. Ivy League. MBA. Three certifications and working at a large bank. And she quit without a job lined up. She said, 'I can't keep showing up to work this way. Not only am I the only Black person on my team, I'm the only woman on my team. And I would rather find another way to earn a living than to continue to show up in this environment,'" Tudor told Financial Planning. "At a firm that actually walks their walk, advisors feel welcomed and empowered. And I'm sure they're blowing other firms out of the water."
But Tudor knows changing the room takes time. "An environment built 95% by white men is going to be, inherently in some ways, not built for Black people or not built for women. Not only the work culture and expectations, but even communication style."
Seemingly small things can make a major difference, Tudor said, citing incentives as an example. Firms might try to incentivize their advisors to perform by using rewards that aren't culturally appealing across the company.
"When I was at Northwestern Mutual, I watched half of the people who qualified for the trips not go. And they were the women who qualified and didn't want to spend a three-day golf trip with 15 guys by themselves on a trip where families weren't allowed," he said. "I worked on a committee for a long time to redo our incentives, redo our trips … make something that would be appealing to Black folks and appealing to women. Because I once spent four days at a place that was previously a plantation in Virginia. And they were like, 'Oh, I didn't notice.' And I'm like, I noticed as soon as I got there."
