By now, financial advisors should be keenly aware of the value that diversity — having a diverse array of people from different backgrounds, genders, ethnic groups, orientations — brings to their teams. Clients are more often demanding to know that the businesses they’re working with have strong diversity, equity and inclusion (DEI) approaches in place, but this is not simply a topic that should have advisors looking inward. There is an opportunity here for advisors themselves to look at their own network of partners and vendors so they can better understand just how those firms are bringing their own DEI efforts to the forefront.
It has, after all, been proven by study after study that more diverse teams lead to better outcomes. But how do we get there? A few keys steps can be taken to lead the way.
Understand the impact of diversity at multiple levels
The first step is to understand why diversity and inclusion is important on a personal and community level to you and your organization. We’ve discussed the macro reasoning, but it’s critical to measure the impact of DEI on an organizational level across three key constituencies: clients, employees and the communities in which we live and work. Engaging with these audiences on the issues that are important to them from a DEI standpoint will help your organization to better identify opportunities and needs among underrepresented areas of the community.
Evaluate your vendor network and identify opportunities to increase diversity
Looking at current spend and assessing the relationships and general satisfaction with the companies that are already part of your vendor and procurement process is another important way to identify opportunities to increase diversity among your suppliers and service providers. You may realize that you’ve been continuing to do business with a company that isn’t providing value or great service simply because you’ve always been doing business with them. Instead, is there a service provider with women, people of color, or veterans among their leadership team that could take their place? And if so, how do you find those businesses?
Consider partnering with leading, experienced DEI organizations
For financial services firms in particular — due to the high regulatory hurdles and steep RFP requirements — finding suppliers to do business with can sometimes be extremely difficult. That’s why partnering with representatives such as the National Minority Supplier Development Council (NMSDC), the Women’s Business Enterprise National Council (WBENC) and other external organizations who can leverage their supplier diversity relationships can be so valuable. These organizations will help take a look at your procurement process and identify areas of your tech spend where one of their member companies can meet the requirements and level of service needed to meet your needs.
Think about creating mentorship programs and DEI initiatives
In addition to the need to find underrepresented tech businesses to join your vendor relationships, having a mentorship program can be critically important for these businesses. Some might not be aware of the requirements that are necessary to serve advisors or that these opportunities even exist. Creating your own mentorship program can help solve some of these issues. Your mentorship program might include some of your existing vendors that allow you to subcontract with new underrepresented businesses, to help give them the know-how and experience they need at the same time.
These programs, which may also include webinars and different educational opportunities, are vital to building awareness so that women, veteran, minority-owned, LGBTQ and other diverse tech vendor businesses know how to do business with you and what they need to do in order to be considered.
Wealth management leaders must balance the rigor of traditional business practices with the soft skills and sophistication modern culture demands, writes Lazetta Rainey Braxton.
Design an outreach plan to spread the word about your DEI efforts
How do we let underrepresented businesses know that these opportunities are available to them? That’s where social media and other marketing efforts can come into play to create awareness. Making sure that you have a strong outreach program to let diverse businesses know that these opportunities exist is just as important as creating outreach programs in the first place.
Overall, having a robust and strong supplier diversity initiative adds so much to your business and the community at large. One, it shows your clients that you care about economic growth and equity in the vendor process. And second, it shows your internal audiences that DEI is a vital value to your firm’s success and future — something that has been shown to be even more important to younger generations of employees, and therefore critical to worker retention and growth.
A diverse tech vendor supply chain sends a strong message about the values of your company. Helping steward economic growth among underrepresented businesses is an ideal role for financial services firms to play in the dialogue on DEI.
