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Focused on the Future
Focused on the Future Wealth Management EDGE Photo by Ledd Lens LLC
Participants listen to a presentation at the Focused on the Future Think Tank at Wealth Management EDGE.

Making a Business Case Moves Diversity Initiatives Forward

While making the case for improved industry diversity is “not a sprint,” showing the financial imperative for doing so is the best way to convince leaders, according to participants during the Focused on the Future Think Tank at Wealth Management EDGE.

Many advisors are struggling to get firm executives to buy into the need for more diversity, but making “the business case” can move Diversity Equity Inclusion & Belonging initiatives forward, according to participants at Wealth Management EDGE’s think tank on DEIB issues in the industry.

“It’s definitely not a sprint; it takes time,” Aiyisha Adams, vice president of advisor engagement at Osaic, said. “But once you do that, that is how you at least get your leadership by-in, if that’s the hard thing for your firm.”

Adams was one of several presenters at the think tank “Focused on the Future: Exploring DEIB in the Wealth Management Industry.” The two-hour discussion, held during Wealth Management EDGE last week at The Diplomat Beach Resort in Hollywood Beach, Fla., included five presentations on particular DEIB initiatives at (or outside of) firms and a discussion with dozens of prominent individuals from across the industry. 

Cary Carbonaro, a senior vice president with ACM Wealth, agreed with Adams, recalling how she was able to convince Joe Duran to fund women’s leadership initiatives at United Capital.

“I did a business plan for Joe Duran, and he gave me millions of dollars for women’s leadership,” she said. “Not because it was the right thing to do, but because it was a business case.”

The presentations included details about the SER Latin@ Advisor Summit, which will hold its second annual conference Oct. 9-10 in San Diego. SER is hoping for 150 advisors this year, three times last year’s number, according to Ana Trujillo Limón, a director of coaching and advisor content with Carson Group.

Kate Healy, CEO and founder of industry consultancy Advokate IQ, presented the FinServ Foundation’s mentorship programs, which help next-generation talent find easier paths into the profession. The group currently has relationships with 28 universities and nearly 100 mentees. Grant Rawdin also presented the ways his Pennsylvania-based firm Wescott Financial Advisory Group emphasizes DEIB in the everyday work processes of their firm.

Diversitas’ programs for aspiring advisors began at the University of Akron and have expanded to approximately 25 colleges and universities around the country, with four virtual programs a year, according to Carina Diamond, CEO and founder of Stella Secunda Partners.

Adams discussed the Financial Alliance for Racial Equality’s work at career fairs at historically black colleges and universities. The organization aims to increase the number of black professionals in the financial services industry. FARE includes 10 financial services firms (including Osaic, RBC, Franklin Templeton and Nationwide) and is currently partnered with five HBCUs.

The financial services industry has been slow to change in terms of diversity, particularly at the leadership level. According to a collection of research from the Government Accountability Office’s Equal Employment Opportunity Commission, 68% of executive/senior-level management positions in the financial services industry were held by men, compared to 32% for women. 85% of those positions were held by white individuals, compared to 3%, 4%, and 7% for Black, Hispanic and Asian individuals, respectively.

While mentorship can help combat the low levels of diversity in the financial services industry, more companies need to emphasize money, according to Lindsey Lewis, a senior director and chair at the American College of Financial Services.

Lewis said she heard from many in the industry that women “are over mentored but under sponsored” and firms need to be willing to write checks to ensure more people can participate in industry events, including conferences like Wealth Management EDGE.

“Mentorship is very important, but (we need) sponsorship,” she said. “What sponsorship means is writing that check and advocating for them when they’re not in the room.”

Adams noted advisors from diverse backgrounds may be inspired to bring more financial and retirement planning services to their own communities, but with the relatively low revenue borne from commissions, they can struggle to make that financial case. 

Therefore, it means advisors in that situation might need to attain greater success over years of work before doing so. Adams also suggested that when building pipeline relationships with colleges and universities, firms should look to community and two-year colleges, as opposed to focusing solely on four-year universities.

But sometimes firms want diversity because their clients “want people that look like them,” according to Allan Boomer, a partner and chief investment officer with Momentum Partners. 

Boomer cautioned this could lead some advisors to believe their only pathway to success is to land clients with similar backgrounds. He hopes firms point to multiple paths to success, not just the one “working with people who look like you.”

“That’s very limiting,” he said. “There are a lot of talented people that our industry is overlooking.”

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