Why we must create a more diverse and sustainable financial planning profession

CEO explains how, why a firm should commit to conscious inclusion

May 19, 2018 @ 6:00 am

By Marguerita Cheng

According to the Bureau of Labor Statistics, employment of personal financial advisers is projected to grow 15% from 2016 to 2026. As the population ages and life expectancy increases, the demand for financial planning advice should continue. But despite the increasing consumer demand for objective personal financial advice, our profession faces unique challenges.

The vision of the CFP Board's Center for Financial Planning is for every American to have access to competent and ethical financial planning advice. The mission to help realize this vision is to create a more diverse and sustainable financial planning profession. Women and people from diverse and multicultural backgrounds are underrepresented in the financial advice profession. Although it is important to address the lack of diversity in our profession, we have to be intentional and inclusive to ensure that our profession reflects and represents those we serve.

"Diversity" means all the ways we differ. Some of these differences we are born with and cannot change. "Diversity" also refers to anything that makes us unique. Diversity is more than gender, race and ethnicity. There is diversity of thought, values and experience. Cognitive diversity can improve performance and profitability. Diversity fosters a more creative and innovative workforce. Many people believe that a group with diverse backgrounds and perspectives makes better decisions than a homogeneous group. Research shows that diverse teams process facts more carefully and are more innovative than homogeneous groups. The buying power of "minority" groups is large and growing rapidly. A diverse business culture that mirrors its markets tends to do better than its homogeneous competitors.

Know someone?Do you know a successful adviser from a diverse background who has an inspirational story to tell? If so, email special projects editor Liz Skinner at lskinner@investmentnews.com.

Inclusion involves bringing together these diverse resources in a beneficial manner. Inclusion applies the concept and practice of diversity by creating an environment of involvement, respect and connection where the breadth and depth of ideas, backgrounds and perspectives are harnessed to create business value. Organizations need both diversity and inclusion to achieve sustainable success.

The lack of diversity and inclusion in our profession is both a threat and an opportunity. Individuals from underrepresented populations feel neglected and overlooked. A sense of belonging is greater than just fitting in. When these individuals can define "belonging" on their own terms, they can be their authentic selves. When they feel included and safe to be their best authentic selves, they can attract people who reflect that back to them. This is the essence of "conscious inclusion."

Conscious inclusion occurs when we foster an environment of involvement, respect and connection and where diverse experiences, ideas and perspectives are valued. An organization with a reputation for being an inviting and inclusive place to work for diverse groups has an easier time recruiting and retaining talent from today's diverse talent pool.

Turnover has significant direct and indirect costs, but companies with inclusive cultures have lower turnover. These savings allow the organization to invest more resources in their employees.

Conscious inclusion can contribute to other positive business metrics such as productivity, profitability, quality, employee commitment and retention.

Just as with the financial planning process, before we can develop or implement financial planning recommendations, we have to illuminate which behaviors and activities are encouraged and discouraged. Here's how to intentionally commit to a culture that supports conscious inclusion:

1. Communication is key. Take the time to be thoughtful and transparent. Trust is the foundation of every relationship. When your employees feel included and valued, they are reliable and loyal.

2. When preparing for a meeting, solicit input for the topics of discussion. Allow your employees to contribute in a meaningful manner. You don't have to implement every idea, but you do need to listen to their feedback.

3. Respect cultural nuances and preferences. In some cultures, it may not be considered culturally acceptable to challenge those older than you. For example, I recall being told that I was a lousy financial adviser because my sales skills were horrible. I hated dealing with objection handling because it seemed so combative and contradicted everything I was told not to do growing up.

4. Don't make assumptions based on stereotypes. Consider using open-ended questions to gain clarity about a situation. Remind yourself that everyone's priorities are unique and different.

5. Affirm the strengths and qualities of every team member, regardless of age, tenure, ability or differences. I'm reminded of this quote by Benjamin Franklin: "Hide not your talents. They for use were made. What's a sundial in the shade?" I encourage everyone to read "StrengthsFinder 2.0" by Tom Rath and take the assessment. By focusing on conscious inclusion, you will build a better team and engage, motivate and get a greater return on your most valuable asset: human capital. When your employees feel included and valued, they are happy. When you have happy employees, you will have happy clients. When you have loyal, satisfied clients, your business will thrive and grow.

Don't be a pathfinder, be a trailblazer. Let's do our part to elevate our profession by creating a more sustainable and diverse profession.

Marguerita Cheng is chief executive of Blue Ocean Global Wealth.

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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