As part of XYPN’s Diversity Committee, I’ve had many interesting and informative conversations about diversity and inclusion. Fundamentally, we all seem to know that we need more diversity and inclusion, but we don’t know how create this change. That uncertainty can be paralyzing. It can even make people want to give up altogether.
That’s where our Diversity Committee comes in. Our mission is to lead the industry by attracting, supporting, and developing a diverse group of financial planners. We’re working toward a future in which our community can embrace our differences. We want to help everyone become more knowledgeable, more accepting, and better people in general. And we want to provide simple, actionable steps that you can take to begin improving diversity and inclusion in our industry and your everyday life.
We’ve previously discussed how to have difficult conversations about diversity and how the financial industry can help bridge the racial wealth gap. Our most recent quarterly conversation focused on how to promote diversity within organizations. That conversation was particularly insightful because of the many practical steps our presenter provided.
In case you missed it, I want to highlight some of the practical steps you can take to promote diversity in your organization and our industry.
An Overview of the Problem
Our presenter for the webinar was Nikki McCord, the founder of McCord Consulting Group. Nikki has been in the governmental affairs, business consulting, and board development fields for over a decade. She is an avid public speaker, educating audiences about board of director governance and organizational diversity. She has also consulted with many organizations striving toward organizational change, often by recruiting minority stakeholders in a way that is culturally competent and supportive.
Nikki’s recruitment and retention focus particularly interested me. Diversity depends on attracting minority talent to our industry, but also finding ways to keep them here. We want our talent to grow and thrive in a supportive atmosphere. Unfortunately we have a long way to go, as Nikki’s webinar, and the statistics below, demonstrate. For instance:
- 79% of the 434,000 financial advisors are white, even though they only comprise 63% of the population.
- African-Americans, Asians and Hispanics/Latinos make up only 20% of financial advisors, even though they make up 36% of the population.
- 23% of financial advisors are women even though they constitute 50% of the population.
These statistics show that our industry isn’t representative of the population we serve. Because of this, we miss opportunities to help the underserved and improve our bottom lines. Nikki pointed out that the top 20% of African-American, Hispanic and Asian households have average wealth of $395,000, $400,000 and $1M respectively. If we’re ever going to reach a point where our industry represents our population as a whole, we must embrace the talent to which minority populations can relate.
Diversity as an Asset
Nikki proposed several strategies to recruit and retain more diverse talent. First, we need to start seeing diversity as an asset. Study after study confirms that diverse teams are smarter and make better business decisions. Many still think of diversity as a minority problem that only involves people of color. But really it’s a business problem that affects all of us. Finding a solution can benefit everyone.
Nikki provided an eye-opening example of this with an analogy: how do you store ketchup? Depending on your culture and background, you may keep your ketchup in the cupboard or the refrigerator. If a person looks for ketchup in only one of those places, they may not find it if it’s in the other. Having team members with experience storing the ketchup in both places ensures that the team as a whole can find it no matter where it’s stored.
This example demonstrates a basic fact about diversity: it’s more than skin color. Many of us think of diversity as simply including more people of color, or women, but that’s just the beginning. Workplaces can also be diverse by age, sexual orientation, disability, education, economic backgrounds and religious beliefs. And of course, it’s possible to be diverse in multiple intersecting ways—a woman can also be a person of color, a white man can have a child who has developmental problems, an LGBTQ person can be a religious minority. Improving diversity allows organizations to recognize and draw upon all the experiences and perspectives that people bring to the table.
What You Can Do
It’s not enough to simply highlight the diversity challenge. The XYPN Diversity Committee would like to offer solutions. Nikki provided three takeaways that were extremely helpful and insightful.
First, you should recruit to meet your diversity goals.
To do this, you’ll have to set objectives both for your firm and for potential employees. You’ll also need to incorporate cultural competencies into your hiring process, for instance, identifying bias and barriers for diverse applicants for you and other employees. Once you have identified those biases, you need to create a process that helps eliminate those barriers.
Secondly, you can promote diversity in your marketing.
As Nikki pointed out, representation matters to both clients and employees. When people see someone who looks like them on your website or you describe an experience that resonates with them, you show that person’s viewpoint is valid and valued. So start by reviewing your website, content marketing and other advertising. What does it say about the people you serve? Would a woman, person of color or someone with a disability feel welcome?
Lastly, encourage mentorship.
A good mentor can help your company develop and retain diverse talent. The goal is to ensure that both you and your employees thrive in the relationship. If you don’t have mentors of minority groups within your firm, tap into networks like XYPN, the Financial Planning Association (FPA) or other minority associations like the Association of African American Advisors to help bridge the gap that your firm may have.
Don’t Give Up!
Nikki left us with a valuable parting thought: don’t give up! The problem of diversity and inclusion has been building for decades and we can’t fix it overnight. It’s a long journey and it’s easy to become overwhelmed or feel helpless. But remember you are making a difference by reading and sharing these posts, attending our conversations and working for positive influence where you can.
I hope you use XYPN’s Diversity Committee as a resource for being the change you want to see. In the coming weeks, you’ll hear more about our April conversation, How to Be A Diversity Ally featuring Harvard Fellow Andrew Greenia. This will be another important and practical conversation with tips on what you can do to help improve diversity and inclusion within our industry.In the meantime, I would love to hear your thoughts, insights and/or questions on diversity and inclusion.
About the Author
Brian Thompson, JD, CFP® is the founder of Brian Thompson Financial LLC. His firm specializes in helping LGBTQ couples set and achieve their goals, protect and grow what they already have and guide them to the lifestyle that brings them fulfillment and happiness. Brian also serves as President of XYPN's Diversity Committee, whose mission is to lead the industry by attracting, supporting, and developing a diverse group of Financial Planners so our community can embrace our differences and make us all more knowledgeable, more accepting, and better people.
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