Minority-owned advisory firm makes diversity a priority

Promoting a diverse workforce begins with hiring decisions at all levels

Apr 21, 2018 @ 6:00 am

By Marci Bair

Women's work: Female advisers of The Wealth Consulting Group at the firm's annual black-tie dinner.
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Women's work: Female advisers of The Wealth Consulting Group at the firm's annual black-tie dinner.

The typical adviser at most financial firms is a 50ish-year-old white male, but not at The Wealth Consulting Group. We are an independent registered investment adviser that stands out among our peers because WCG is owned by a first-generation Asian-American and we have a strong belief in diversity from the top down. The firm, which has assets under management in excess of $1.3 billion, has a diverse employee and adviser base.

Since the firm's inception, diversity among our advisers and team members has been a focus when making hiring decisions. Our offices are in locations where the communities are very diverse, such as Las Vegas, Phoenix, San Diego, Albuquerque, Palm Springs and the Bay Area. We feel it is a priority for our associates to resemble the people we serve in those markets and others.

Since we primarily get referrals for openings from our existing associates, we naturally find great candidates who look like the people living in the communities where we work. We also get referrals from our centers of influence and in certain markets we have specifically asked for candidates who are women, or of certain ethnic backgrounds.

DEADLINE EXTENDEDDo you know an individual or firm that has consistently worked to foster diversity and inclusion? InvestmentNews is recognizing advisory firms, industry partners and individuals in its inaugural Excellence in Diversity & Inclusion Awards later this year. Nominate a leader at InvestmentNews.com/nominatediversity by May 1.

We believe a diverse workforce and leadership team result in more effective business decisions that take into account the ideas of a broader sampling of the population. It helps ensure that we avoid "groupthink" and make better decisions.

Our firm also believes that diversity among its team members allows us to offer a values and belief structure that covers a wider portion of the population in the communities in which we do business, and enables WCG and our advisers to attract a broader group of clients.

(More:Chicago adviser strategically reaching clients with smaller balances)

Diverse corporate management teams outperform all-male management teams, according to numerous research studies, from Forbes to Credit Suisse, and white papers by Joseph Keefe, president and CEO of Pax World Management. It's not that women or men are "better," but that diverse groups, in which both men and women are at the table, make better decisions than nondiverse groups. The research suggests that when gender diversity reaches a critical mass of three or more women on a board (roughly 30%), governance improves, and so does financial performance, with lower volatility.

The numbers

Females account for 55% of advisers and team members at WCG, and we are more ethnically diverse than most financial firms as well. More than 30% of our advisers and team members are of nonwhite ethnic descent, and more than 7% members identify as LGBTQ.

Our diversity and inclusion initiatives have resulted in a team of WCG advisers that drove the creation of our high impact portfolios (HIP). These use environmental, social and governance (ESG) analysis to gain insights into a company's resource management, workplace practices, board structure and more.

By taking these factors into account, our HIP portfolios are investing in companies that:

• Develop innovative solutions to global sustainability challenges;

• Promote gender, ethnic and lifestyle diversity;

• Support community-based financial institutions that promote small businesses, health care, education and housing; and

• Are actively involved in shareholder advocacy and public policy engagement to encourage companies to improve their ESG commitments.

Since our introduction of these portfolios just over two years ago, they have attracted more than $100 million in client investments. This diversification of our WCG investment portfolio has enabled our clients to see WCG's commitment as a leader in sustainable and responsible investing. Offering these investment options allows WCG to assist our clients with setting and implementing clear goals aligned not only with their needs and objectives, but also with their personal values.

(More: Team of African-American advisers making great strides, one inspiration at a time)

The firm's focus on diversity has also created unique marketing opportunities for our firm.

The most recent was our joint sponsorship of the 2018 ANA Inspiration Golf Tournament, the first major golf tournament of the LPGA tour season, with Sallie Krawcheck and Pax Ellevate Management. This sponsorship included the Inspiration Women in Sports conference that preceded the tournament, where Ms. Krawcheck was a keynote speaker, in addition to Ashley Judd and a host of he top female athletes in the world.

We know that as the baby boomers retire and then pass on, a tsunami of around $30 trillion dollars will transfer to the next generation. This is not only a transfer of a significant amount of wealth, but financial advisers need to understand how the next generation will invest and what kinds of financial advisers they will seek.

Next-gen buying power

In addition to the wealth transfer, the buying power of Gen X (34-45) and millennials (12-33) is over $1 trillion. These investors grew up in a diverse society and celebrate it. For them, valuing diversity is assumed. This large group of consumers are a lot more conscious of where they spend their money and tend to seek out companies that match their values.

Gen X and millennial investors have said that they want to work with advisers whom they can relate to and who will still be in practice when the investor matures and needs more of their services. Only 22% of current advisers are under age 40, according to Ernst & Young.

Financial firms need to begin recruiting and supporting younger advisers who are more diverse and will be able connect with these clients and share their values.

If you feel that diversity and inclusion are important to you and that your clients would appreciate sharing those values with you, I would encourage you to put together a game plan to support this goal.

Marci Bair is president and founder of Bair Financial Planning and vice president of The Wealth Consulting Group, a hybrid RIA with LPL Financial.

This story is part of an ongoing initiative by InvestmentNews to cultivate a financial advice profession in which diverse perspectives are welcomed and respected, and industry best practices can be shared across organizations.


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