Financial firms say they are making inroads in creating more diverse workforce

Merrill Lynch, Chase Wealth Management tout people of color in training programs

Nov 13, 2019 @ 2:21 pm

By Mark Schoeff Jr.

The financial advice profession will become more diverse over the next several years if the training programs of some major firms are any indication.

Executives at Merrill Lynch, Chase Wealth Management and Morgan Stanley told the audience at the Certified Financial Planner Board of Standards Inc. Diversity Summit in Washington on Wednesday that the complexion of their development programs is changing.

Craig Young, executive director of Merrill Lynch Wealth Management, said more than 30% of the participants this year in the firm's financial adviser development program are people of color and about 28% are women.

The firm hasn't solved the challenge of making the profession more diverse, but it is off to a good start, Mr. Young said.

"It's not rhetoric around a strategic priority," Mr. Young said on a conference panel. "It's actually built into the accountability framework of our firm. You have to hold hiring managers accountable to who they bring on board, and we have to create communities within firms that allow people to flourish when they come here."

The adviser development program at Chase Wealth Management, J.P. Morgan Chase's bank channel, is comprised of about 70% people of color and women, said Samuel Palmer, managing director and head of business development and strategy.

"We're very proud, and we've been able to scale it," Mr. Palmer said.

[Recommended video: What advice industry needs to do as nation's diversity evolves]

Morgan Stanley's incoming analyst class is 45% diverse, and 20% of the firm's managing directors are female, said Ileana Musa, managing director of international wealth management.

"Focusing on the bench, that newer generation that is coming through is incredibly important in terms of changing the dynamic," Ms. Musa said. "[Diversity] is in our DNA. We breath it. We live it."

The CFP Board Center for Financial Planning released on Wednesday a report compiling studies over the last several years that illustrate the business case for diversity. The report cites better client service, recruiting, retention and creativity at firms whose staffs represent a variety of backgrounds.

Kim Jenson, senior vice president and chief operating officer at the Raymond James Private Client Group, attested to the benefits her firm has realized as it makes diversity central to its culture.

"It's not about just sourcing talent," Ms. Jenson said. "It's about providing the most welcoming, inclusive, productive environment for everybody. The moral argument is clear. We make better decisions. We are more innovative when we have diversity at the table. We have a better representation of our clients."

The point isn't to mandate that firms hire a specific number of diverse candidates, but it is important that people with many different backgrounds are interviewed, Mr. Palmer said.

"That's not to say you have to hire a black person [or] you have to hire a woman," Mr. Palmer said. "But make sure that the people you're looking at actually reflect that."

During the push for diversity, it's important not to alienate straight male white advisers, the panelists said.

"Including the majority in some of this conversation is critical to our success," Ms. Jenson said.

There's still a long way to go to make the financial planning more diverse. The CFP Board says 3.7% of the approximately 85,000 CFPs in the United States are black or Latino, while 23% are women.


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