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Why the financial advice industry should focus less on diversity and more on inclusion

By engaging diverse professionals, we can tap into their passions for the benefit of the profession

Dec 20, 2016 @ 4:37 pm

By Pamela Sandy and Rianka R. Dorsainvil

It doesn't really need to be rehashed because the issue has been talked and written about at great length already, but the financial services industry does, in fact, have a diversity problem.

The statistics bear this out.

InvestmentNews reported in December 2015 that 79% of all financial advisers are white, and the U.S. Bureau of Labor Statistics has reported that just over 35% of financial advisers are female. These numbers certainly call attention to an ongoing problem facing our profession, despite the fact that the U.S. population is increasingly more diverse. But it's not as if organizations are not trying to make an impact.

The Financial Planning Association (FPA) has long been a proponent of diversity and has established programs and initiatives to help, including the creation of diversity scholarships to attend conferences, the formation of an FPA Women and Finance Knowledge Circle and the establishment of the FPA Diversity Committee. Other organizations have also joined in efforts to build a more diverse profession of financial planners, and large financial firms looking to the future have created diversity initiatives within their organizations. Collectively, we see the need to have the financial profession resemble the communities we currently serve and will continue to serve in the future.

Diversity thought leader Verna Myers has said, “Diversity is being invited to the party, inclusion is being asked to dance. Diversity is about quantity; inclusion is about quality.” While making the financial advisory profession more diverse is important, it certainly won't mean much unless we find a way to shift the stale, exclusionary culture of financial services to one that is more inclusive. It is through inclusion that people of diverse backgrounds will not only find the financial advisory profession desirable, but discover it to be a profession where they belong. People thrive in a place where they feel accepted, heard and supported. To build a diverse profession, we must intentionally include people in the profession. That means moving beyond simply trying to make the profession more diverse — the quantity — to finding ways to ensure professionals of diverse backgrounds are heard, engaged and empowered — the quality.

To build a more diverse profession, we need to hear what it is that professionals of different ages, genders, races and ethnicities need in terms of support and opportunities to advance in the profession. That means we need to be proactive in seeking their input and solicit their feedback. What do these professionals require in terms of educational opportunities, mentorship and community building? Mentorship programs must mix things up and really challenge all diverse populations to collaborate and interact with each other. We must be thoughtful in having these discussions so we can create an environment where everyone is heard and contributing.

Once people are heard, they then need to be engaged and involved in the profession at all levels. We would contend that the profession's best advocates for diversity are those who are from diverse backgrounds themselves. We must look into our respective organizations, associations and companies to identify opportunities where diverse professionals can be plugged in and made to feel that they have a say in what we are doing to grow and support those in the profession. Volunteerism is the lifeblood of any organization. By engaging diverse professionals in committees, task forces and in the multitude of other leadership openings, we can tap into their passions for the benefit of the profession.

Finally, people need to be empowered to be advocates for the profession. The best advocates for diversity are those who are diverse themselves. Many women, African-Americans, Latinos, millennials and others are actively working with other students and professionals who may have an interest in financial services, but are unsure where to start to make it their vocation. What do young people of diverse backgrounds who are considering entering the profession see within the community? Do they see a party where all are being asked to dance or do they see a significant amount of wallflowers who look like them?

Diversity alone will not solve the problem the profession faces. It is the complement of inclusion that will move the needle forward and that will create a financial professional workforce that best reflects the communities we serve today and tomorrow. Take some time in this New Year to see how you can get involved in hearing, engaging and empowering diverse professionals, whether it's in your own practice or in your association. We all stand to prosper by working together to build a more inclusive profession.

Pamela Sandy is the 2016 president of the Financial Planning Association. Rianka R. Dorsainvil is the 2016 president of FPA NexGen.

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