Creating diversity within the financial planning industry
Shundrawn Thomas
President
Northern Trust Asset Management
See It, Be It Role Model
"For over 25 years, I’ve enjoyed the privilege of providing investment advice to institutional investors, financial advisors and affluent families. Although the financial advice industry has experienced dynamic growth during this period, our industry has failed to capitalize on the vast potential of a more diverse and inclusive workforce. Presently, women account for less than a quarter of the over 80,000 certified financial planners while African-Americans and Latinos account for less than 4 percent. These percentages are materially lower when we consider all registered advisors. I am however confident that evolving our managerial practices in three key areas will enable the financial planning industry to meaningfully advance diversity, equity and inclusion.
First, firms must commit to hiring diverse professionals directly into advisor roles and leadership positions. There are many talented diverse individuals within our industry that can excel provided the opportunity. Team-based structures are often most effective for ensuring their success. Emphasizing client facing roles and starting at the top is the first step toward sustainable progress. Second, firms must change existing talent management practices. Diverse professionals are historically less likely to be attracted to our industry and diverse communities are underserved by financial advisors. Firms can develop their talent pipelines by partnering with organizations like the Toigo Foundation, the Association for Latino Professionals in Finance and Accounting and Girls Who Invest. Firms can enhance recruiting by targeting Historically Black Colleges and Universities (HBCUs) as an example. The overall talent management approach should be undergirded by a robust mentoring program. Finally, firms should work toward intentionally diversifying their client base. The lack of diversity among advisors is generally reflected in the client mix of advisor firms. Wealth among women now represents a greater share than men in the U.S., with large share increases globally. Wealth among ethnic minorities is growing at a faster rate than whites. As such, diversifying the client base is not only good for equity and inclusion it will be great for business in the long run."