Having worked with various financial firms in different capacities throughout my career, I've come to recognize two absolute truths about diversity.
First, appreciation for the different experiences, perspectives and values that stem from diverse backgrounds and inform people's financial needs is critical to the role we aspire to play in people's lives.
Second, our industry has work to do in this area.
In 2017, Congress commissioned a report from the Government Accountability Office on minority representation in financial services management roles. The report showed representation of minorities increased from 17% to 21% during the years 2007-2015. Representation of women was unchanged at 48% in first to midlevel roles and about 29% in senior positions.
Contrast this data with the shifting demographics of our current and prospective wealth management clients. According to a report from the Bank of Montreal's Wealth Institute, in 2015 women achieved control of 51% of the personal wealth in America. In 2017, the U.S. Census Bureau reported that populations of all racial and ethnic minorities in the United States grew faster than the non-Hispanic white population from 2015-2016.
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Our clients already look, think and feel differently than they have in the past. Shouldn't we?
A passion shared
When I joined Baird, it was clear that the firm's leaders recognize the importance of pursuing greater diversity, and, importantly, inclusion, for their associates. At Baird, it isn't just about better understanding and reflecting the clients of today and tomorrow, but it's the belief that the best ideas and solutions result when diverse perspectives come together with common purpose.
Knowing the value of diversity comes from more than demographic representation; Baird has chosen to lead with a focus on inclusion — creating an environment where everyone feels involved, valued, safe and respected. Diversity remains vitally important, but we believe representation without inclusion will only result in a revolving door that may bring diverse talent in, but will almost certainly see disengaged talent leave.
Because so many of Baird's efforts focus on being inclusive and a best place to work, we have high engagement rates and low turnover among our general associate population. The second part of that is important. Our women and minority associates know we operate within a still largely white-male-led industry, and their engagement scores reflect that. Yet those associates who remain with us are committed to helping us find ways to improve.
Making a difference
Baird's Associate Resource Groups, or ARGs, are valuable forums for direction, input and feedback from associate populations with common interests and concerns. Comprised of ethnically diverse associates, LGBT+ associates and others with a shared stake in making Baird more inclusive, each group helps shape our policies and practices. They have impacted the way we structure our benefits, how our businesses go to market and the ways we recruit diverse talent.
These ARGs are just one source for members of our executive committee, all of whom are passionate inclusion and diversity champions. We also consider demographic information, focus group information and inclusion scores. We work closely with our business leaders — for whom inclusion and diversity are ingrained within business goals — to identify needs and gaps, and we develop tailored solutions to address them.
What tangible results have we seen from these efforts?
Look at Baird's 2018 intern program. Of 177 interns, 53% were women or minorities. Of the graduating college seniors, 45% converted to full time hires, of which 33% were women or minorities.
We also launched new mentoring programs: one for women, in which senior leaders work with emerging young female talent, and one for millennials, who can learn from and reverse-mentor more senior associates. New initiatives for 2019 include a project on gender pay equity and evaluating promotion practices with a focus on gender.
Anyone who knows me knows how passionate I am about the importance of diversity. I wouldn't have come out of retirement to join Baird if I didn't believe that's a passion they share.
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.
John Taft is vice chairman of Baird and writes an industry blog, "Finance for the Greater Good."