Growing up, Tony Barrett’s family was decidedly middle class. “My parents never bought a stock, bond or mutual fund,” he says, much less had a financial advisor. “They had a life insurance guy. He’d come over every once in a while, sit at the kitchen table and I’d hear some of the things they spoke about,” he says. “I had no real perspective on what a financial advisor did.”
That shifted when he got to high school. His part-time football coach, who came to practice wearing sharp suits and driving a Porsche, was an advisor and talked to Barrett about investing. “I didn’t really understand it all. I just knew he was a guy who made a good living, drove a nice car and dressed well.”
That was motivation enough to lean towards financial services for a career. One problem: When Barrett, now a Raymond James advisor, surveyed the industry, almost no one looked like him. He's black and there were few visible black advisors in the industry. He felt fortunate to get some career advice from his coach, who's also black, and believes his experience was unusual.
“I was one of the rare minorities,” Barrett says. “I had a role model in the business who was like me.” He believes he might not have lasted in the field without one. His current mission is to give that same kind of support to others looking to get into the industry. To that end, in 2013, he and a handful of other advisors founded the Black Financial Advisors Network within Raymond James Financial.
About a third of the U.S. population consider themselves members of a racial or ethnic minority; within the financial services industry, about 8 percent identify as such, according to the U.S. Census Bureau. In a 2014 Aite Group survey of almost 400 financial advisors, about 2 percent identified as African American—compared to 88 percent who identified as Caucasian or white.
Should the numbers matter? “One of the challenges with solving any of the issues is understanding that it’s not just a numbers issue. It’s how you feel, how you’re treated and what opportunities are afforded to deserving people,” Barrett says.
Ever since a spate of discrimination lawsuits hit the larger investment brokerage firms some ten years ago, the industry began to recognize it had a problem when it came to minorities and women. Since then, there have been dozens of initiatives at firms like UBS, Merrill Lynch and Morgan Stanley, among others, to open the ranks of retail advisors to more accurately reflect the broader population, with varying levels of success.
Edward Jones’ BRIDGE program actively recruits from within minority communities; in a survey of 2,000 investors in 2013, the firm found two-thirds favored a more diverse advisor workforce. Eight out of ten minority investors said the same.
But with so many initiatives over the past decade, why is the needle moving so slowly? The bet Barrett and others are making is that professional networks of minority advisors can be better catalysts by acting as advocates for the profession in the minority community and for minorities inside firms. Consider the Association of African American Advisors, a 14-year-old professional network of over three dozen members that will hold its first national conference at the end of September.
Barrett, along with fellow advisors Joel Burstein and Kaon Nelson, started their network in the fall of 2013; about 20 members showed up at their first meeting. A little over six months later, the number has doubled. “There’s a lot of room to grow,” Barrett says.
But identifying potential members, even within Raymond James, can be a challenge. The firm doesn’t keep tabs on its independent advisors’ races or ethnicities, so Barrett and other leaders have had to rely on word-of-mouth and meeting potential members at firm conferences and events. “You walk in a room, there may be one other person and you give them a head nod.”
To grow the ranks, the group is working with Raymond James to recruit advisors from places beyond historically black colleges and universities. “Not that those are the wrong things to do, but if we’re simply doing that—like every financial services firm, like every other company in every other industry in America—then we’re all in the same battle for the same talent,” Barrett says. “I didn’t want to be in a situation where we’re throwing the same ideas on the table and trying to make them work when they haven’t been impactful for anyone in the past.”
One differentiator for Barrett’s group is a partnership with the National Association of Securities Professionals, a 30-year-old group of over 500 members focused on promoting minorities and women in the broader financial services industry. Barrett says he recently extended an offer to a member of NASP to join Raymond James’ AMP program. If she accepts, she will start at the firm in early September.
With his own experience in mind, Barrett says mentoring is another opportunity, but the network is still figuring out how to connect the right people. It’s helpful if a mentor is the same race or ethnicity as a mentee, Barrett says, but not essential for a mentorship to work. And same-race mentorship is no silver bullet for retaining and attracting minority advisors.
“This business is hard for everybody, black, white or blue,” he says. Still, Barrett is “walking the walk,” he says, working to boost the recruitment of minority advisors in his own branch.
“It’s easy for me to come in every day and just do things the way everyone has. Even me, as a black man, if I were to do that, my results wouldn’t be any different than anyone else’s results,” he says.
The network is an opportunity to try and do things differently, Barrett says. “I get phone calls all the time, asking ‘What are your guys doing? Give me a plan.’ They’re disappointed. But there’s not a specific formula for success…there just isn’t one. Instead, we’re thinking outside the box.”