For Mark Tibergien, CEO at BNY Mellon's Pershing, making the financial advice industry a more diverse and inclusive place isn't just the right thing to do — it's imperative for the survival of the business.
People have been talking about the industry's lack of diversity for decades, but the actual numbers have changed very little, Mr. Tibergien said at a New York symposium for Pershing's top RIA clients.
But the demographics of the U.S. population are changing rapidly, and firms must attract more women and people of color if they want to remain relevant.
According to Mr. Tibergien, the economic power of black Americans is now double that of the economy of Russia. The economic power of Spanish-speaking Americans is triple that of Russia's economy, while that of Asian-Americans is orders of magnitude more.
Beyond pure economics, Mr. Tibergien urged RIAs in attendance to think about what this means for a profession where more practitioners are over 70 than under 30.
"Most founders of advisory firms 10 years from now will either be underground or on the beach. Either way, they'll be closer to the sand," Mr. Tibergien said. "We need to understand that this is a big issue for us. We need to attract more people to the business."
He also gave three reasons why young people today aren't interested in the advice business: They don't study finance in school, finance has a terrible reputation among the general public, and there's a perception that it's all about sales rather than giving advice.
The industry will have to work together to address these issues if it wants to make financial advice an interesting career path, Mr. Tibergien said. Only then will firms be able to attract the diverse talent needed to be relevant in the future.
"This is different than how we've ever thought about this business before," he added. "What we know is you can't change the world, but you can change a life."