They have little tolerance for sexual harassment, but most advice firms lack formal policies

Industry conferences take lead in adopting formal policies, where harassment has been a problem in the past

Nov 17, 2018 @ 7:00 am

By Jeff Benjamin

As various forms of high-profile sexual harassment and assault charges have dominated news headlines over the past year, the financial advice business has been struggling with how to address an issue that largely has, until recently, been side stepped.

While most large financial services industry conglomerates have harassment policies that are maintained and managed within human resource departments, thousands of smaller independent firms might not have even considered creating a formal harassment policy.

So, when should an advisory firm introduce such a policy?

"We do not have a formal policy, but there is absolutely no harassment allowed here," said Carolyn McClanahan, founder and director of financial planning at Life Planning Partners.

The "zero-tolerance" policy was illustrated a few years ago when an office cleaning lady made an unwanted sexual comment to an adviser working at the firm.

"She was fired on the spot," Ms. McClanahan said. "We have corporate engagement standards, which means if anyone is not feeling right about something, we bring it up as a group and we bring it up immediately."

Across the financial advice industry, especially among smaller shops, formal harassment policies are rare, but change is in the air.

The XY Planning Network of about 700 registered investment advisers is credited with breaking ground last year by introducing at its annual conference a code of conduct and sexual harassment policy.

Recognizing that industry conferences, which often include cocktail receptions and other social gatherings, can sometimes fuel inappropriate behavior, XYPN co-founders Alan Moore and Michael Kitces addressed the issue by announcing that any form or harassment would not be tolerated and that offenders would be barred from attendance at XYPN events.

"Everyone has a right to come to work and not have someone making unwanted sexual advances towards them. Everyone has a right to say no, and it means no, without explanation. Everyone should be able to be unique, and not be judged for their uniqueness. We are stronger when we are diverse, and we promote diversity at XYPN," the policy reads in part.

But even with such a policy at XYPN, which was reiterated at this year's annual conference in October, Mr. Kitces admits he does not have "anything handy for our own RIA," Pinnacle Advisory Group, where he is partner and director of wealth management.

That is not to suggest that Mr. Kitces or Pinnacle Advisory Group doesn't take harassment seriously, but it reflects where much of the industry is regarding formal policies versus just expecting people to know what's right.

"Harassment policies are part of the new regulatory compliance suite, or it should be, and firms need to get ahead of this," said April Rudin, president of financial services marketing firm The Rudin Group.

"Right now, people are still in reactive mode when it comes to workplace harassment, but soon it will switch to proactive mode as it become more mainstream," she said. "In some ways, it reminds me of the fiduciary rule, and wondering why you should have to tell firms to put clients first. We still have to tell people how they need to behave."

Steven Seltzer of The Seltzer Law Group, said the best harassment policies are straightforward and well-communicated to employees.

"A policy must be in writing and it should explain what sexual harassment is, including examples, and what the retaliation is in layman's terms regarding any action taken to penalize someone who has registered a complaint," he said. "Many employees fear reprisal if and when they do come forward with a complaint."

Last month at its annual conference in Chicago, the Financial Planning Association followed the lead of the XY Planning Network by handing out cards at registration highlighting its formal "#MeetingsToo" policy, which plays off the "MeToo" movement that developed in the wake of last year's string of high-profile sexual harassment charges.

Like the XYPN policy, the FPA appears to be specifically addressing behavior at conferences.

Asked about the "#MeetingsToo" policy, FPA executive director explained that formal harassment policies are "fast becoming a best practice in the meetings industry" and added that the FPA wanted to "put a flag in the ground."

Considering that nearly half of all advisory firms qualify as solo practitioners, it's perhaps not surprising that formal policies are not yet the norm at the firm level.

Helen Ngo opened Capital Benchmark Partners five years ago after working for five years at a much larger firm.

Even if policies are in place, she said they are sometimes not clearly articulated, but she also recognizes that conferences are where harassment is most common.

"You hear a lot of interesting stories coming out of conferences," she said. "The organizations don't want to get in trouble for not having an obvious stance. All these conferences know they can't prevent sexual harassment, but if they take the initiative that this is what we believe in, it's a step forward."

Amy Irvine, founder of Irvine Wealth Planning Strategies, said she made sure she had a harassment policy in place even before the first employee was hired in 2016.

"Having had experiences at prior jobs, I created a high-level policy, and as I started adding staff members, I reinforced that no type of harassment would be tolerated," she said. "We can joke with each other, but there's not tolerance for harassment. I would hope that more firms think about that as they continue to grow."

0
Comments

What do you think?

View comments

Upcoming event

Jul 09

Conference

Boston Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in six cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Most watched

INTV

Young professionals see lots of opportunity to reinvent the advice experience

Members of the 2019 InvestmentNews class of 40 Under 40 have strategies to overcome the challenges of being young in a mature industry.

INTV

Young advisers envision a radically different business in five years

Fintech and sustainable investing are two factors being watched closely by some of the 2019 class of InvestmentNews' 40 Under 40.

Latest news & opinion

New Jersey fiduciary rule: Pressure leads to public hearing, comment deadline extension

Industry push results in chance to air grievances on July 17 and another month to present objections.

InvestmentNews' 2019 class of 40 Under 40

Our 40 Under 40 project, now in its sixth year, highlights young talent in the financial advice industry. These individuals illustrate the tremendous potential of those coming up in the profession. These stories will surprise, entertain, educate and inspire.

Galvin to propose fiduciary rule for Massachusetts brokers

The secretary of the commonwealth is proposing a fiduciary standard in response to an SEC investment-advice rule he views as too weak.

Summer reading recommendations from financial advisers

Here are some books that will keep you informed and entertained during summer's downtime

4 strategies for Roth conversions

There's never been a better time to do a Roth conversion, and here are several ways to go about it.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print