Closed doors at Finra hide the whole industry's shame

Finra's second diversity conference in New York on Tuesday featured a number of key industry speakers who touted the importance of recruiting, retaining and promoting more women and minorities in the industry. “Diversity is strength — even a group of best point guards cannot win a basketball game,” former Bank of America Merrill Lynch executive Sallie Krawcheck said during a speech, according to a tweet from Finra's @Finra_Education handle.

Sally Krawcheck @85Broads: "Diversity is strength - even a group of best point guards cannot win a basketball game." #FINRADiversitySummit

— FINRA Education (@FINRA_Education) March 4, 2014

But despite its important message, the event and speakers didn't make headlines. The conference was closed to the media in a decision that shows that the industry still isn't capable of having the conversations and making the disclosures necessary to tackle its diversity problem. All but one of the Financial Industry Regulatory Authority Inc.'s conferences are closed to the media, and the purpose of closing the event was to provide a more open forum, said Michelle Ong, a spokeswoman for the regulator. “It was our goal to provide a venue for presenters and participants to freely discuss issues of diversity and inclusion without concern that their comments may be misinterpreted or not presented in context by journalists reporting on the discussions,” she said.

Eric Grossman Morgan Stanley: "A diversity and inclusion program is just good business." #FINRADiversitySummit

— FINRA Education (@FINRA_Education) March 4, 2014

But that sort of lack of disclosure and concern about publicity is holding back the conversation elsewhere. “What I would like to hear is more white men talking about how this conversation rests with them because I think this whole fear element of feeling displaced — when you have not had to deal with that as a population — is a challenge that is going to keep stifling this transition,” said Lazetta Braxton, founder of independent advice firm Financial Fountains and former chairman of the Financial Planning Association's diversity committee. Ms. Braxton is black. Almost none of the major firms will report numbers of their minority, and in some cases female, advisers. Edward Jones has been perhaps the most visible, saying with no sense of pride that its percentage of minority advisers is about 6%. But numbers at other firms usually don't become public until they are disclosed in lawsuits, such as the George McReynolds discrimination case last year against Merrill Lynch & Co. Inc., in which the adviser, who is black, alleged that the firm's percentage of minority advisers hovered at around 2%. (Read George McReynolds' story.) Section 342 of the Dodd-Frank Act would require firms to make disclosures about the percentage of women and minorities that they employ, but it has yet to be implemented. To Ms. Ong's point, the press does have a responsibility to move the conversation forward rather than harping on lawsuits. The purpose of disclosing the numbers isn't to subject the firms to more attacks from the media. Firms are, after all, trying to forge ahead. To name a few: Merrill Lynch made updates to its training program and other areas such as adding coaches to help improve the retention rate of its black brokers. The Securities Industry and Financial Markets Association, a trade group representing most of the major firms, hosted its own diversity conference last year, which was open to the press. And RBC Wealth Management U.S. chief executive, John Taft, has been an outspoken political advocate for lesbian, gay, bisexual and transgender rights in the firm's headquarter state of Minnesota. But for all the well-intended words, firms can't get women and minorities to stick around. Lack of disclosure on the numbers of minorities isn't the only reason, but it hurts firms' ability to show that they are having a full and honest conversation. The first step to tracking progress, even if it is slow, would be to treat diversity figures the same way we do profit or other financial metrics and disclose the numbers.