John W. Rogers Jr., chairman of Ariel Investments and a pioneer of diversity and inclusion in the financial services profession, issued a reality check for industry participants Tuesday, saying the industry has backtracked rather than improved when it comes to diversity.
"I think we've actually gone backwards over the 36 years I've been at Ariel," said Mr. Rogers, who founded his firm — the first African American-owned mutual fund company and now the largest such asset management firm, with $13 billion in assets — at age 24.
Some of the major growth parts of the U.S. economy, such as venture capital, private equity and hedge funds, have "a real dearth of African American, Latino and women leaders in the field," Mr. Rogers said at InvestmentNews' Diversity & Inclusion Summit in New York.
"I think it's a much, much tougher environment today than I would have expected 36 years ago," he added.
Mr. Rogers, who was honored at the event with a Lifetime Achievement award, partly attributes the diminishment of diversity and inclusion to the amount of time that's passed since the height of the civil rights movement in the 1960s.
"It was so visceral. You could see the lynchings, what was happening in Selma and other communities. And leaders like Dr. King who were really exposing that," Mr. Rogers said.
"The next generation of [leaders] in their 40s and 50s who didn't experience it, I don't think they feel the need to challenge reality," he added. "I think they assume things are better."
Only 23% of holders of the certified financial planner designation were women in 2018. The number of African American and Latino CFPs was only about 3.5%, much lower than those groups' 30% share of the overall U.S. population.
Mr. Rogers described an "unconscious and implicit bias" in American society as a continuing challenge when it comes to race.
For example, he said, university presidents polled about their positive relationships with minority-owned businesses might identify working with a minority catering business or offering building contracts to a minority business. White men are thought of as the lawyers and entrepreneurs, but minorities are often reduced to manual laborers, Mr. Rogers said.
Other honorees at the event said that there's a long way to go in the industry in terms of diversity and inclusion, and that the stakes are high for financial advisers.
"I'm tired of the words. I want to see more action," said Anita Knotts, senior vice president at Calamos Wealth Management, who was one of 10 "See It, Be It" role models honored by InvestmentNews.
"We don't choose diversity because it's the right thing to do," Ms. Knotts added. "It's the only thing to do if we want to serve the client of the future. And the future is now."
Mr. Rogers echoed that sentiment, saying that creating equal wealth among all members of society — the fruits of a more inclusive society — will create customers 20 to 30 years in the future and promote collective growth for wealth management firms.
InvestmentNews also gave awards to three firms — Apriem Advisors, Seitzinger Financial Group/Northwestern Mutual and Tobias Financial Advisors — for their outstanding efforts in building diverse advisory businesses.
Five firms were honored for championing diversity efforts in the financial advice industry: The Gateway To Leadership Foundation, LPL Financial, TD Ameritrade Institutional, Wells Fargo Advisors and XY Planning Network.
Despite the warnings, some honorees expressed optimism for the future.
"I think we're at a time right now where we could start to see some real change," said Alyssa Moeder, a private wealth adviser at Merrill Private Wealth Management and another of the "See It, Be It" role models.
Mr. Rogers pointed to two women of color in the House of Representatives — Rep. Maxine Waters, D-Calif., and Rep. Joyce Beatty, D-Ohio — as "beacons of hope." Ms. Waters, chairwoman of the House Financial Services Committee, created the panel's first subcommittee on diversity and inclusion earlier this year and Ms. Beatty chairs that subcommittee.
"They are pushing really, really hard for banks and the financial institutions that they regulate to start to look more like America," Mr. Rogers said.