Our Industry’s Problem
If you didn’t already know, financial planning isn’t a very diverse industry. According to the latest statistics from the CFP board, about 23% of CFPs are female and 73% are over the age of 40. The CFP board doesn’t publish statistics for minorities, but according to the Bureau of Labor statistics (BLS) about 20% of personal financial advisors are African American, Asian or Latino. Comparatively, across all industries, 47% of workers are women and 35% are non-white, according to the BLS. Even though the membership of the XY Planning Network (nearly 500 strong!) skews younger and slightly more diverse than the broader population, there’s still a ton more work to do.
Our industry will be better off with more diversity. Here are some reasons why:
- The Financial Services Industry Untapped Market from the Harvard Business Review
- Ethnic Diversity Deflates Price Bubbles from the Proceedings of the National Academy of Sciences of the United States of America
- Why Diversity Matters from McKinsey & Company
According to these studies, diversity leads to reaching new customers, increasing profitability and even prevents asset bubbles from forming.
A Personal Story
I have spent the entirety of my 15-year career working in male-dominated fields. First working with state legislatures and Congress, then working in financial services. I’ve only ever had one female supervisor. The number of women who outranked me at any of my jobs was scant. I found myself working on teams where I was one of the youngest of my peers, which comes with it’s own set of challenges.
Early on, I picked up the “tricks” we all have to learn to fit in: the nervous laughter when a male boss says something inappropriate, spending a lot more time one-on-one with people because I was often overlooked or talked over during meetings, and studying like hell to learn how to negotiate for myself. I’m certain that other women and minorities can relate to some of this.
I never got much in the way of career-advancing mentorship when I worked at a corporate job, unless I sought it out directly. When I worked as an analyst on the floor of a global finance news and data organization, I didn’t feel like my peers were there to help me. It felt like competition. The resources I turned to tended to be female membership and networking groups outside my company, and I learned a lot from being part of those communities.
One awesome thing I’ve observed about financial planners and solo firm owners is that we’re a bit different. We’re welcoming and willing to bend over backwards to provide advice, support, and guidance. I’ve had so many people take time out of their day to tell me about their business and answer my questions.
With all that early support, I just began my third year as a female firm owner under the age of 40! I can do what I want in my business. I make all the decisions, the schedule and the rules. I choose who I’m hiring, and I’m creating the culture I want to experience every day. I’m choosing to help female clients focus on their own careers and explore starting businesses for themselves. It’s been a fantastic experience.
I am lucky to have a ton of supportive people behind me in the XYPN community helping me on my journey as virtual co-workers. And I’ve found people in our network to be open to talking about tough issues like diversity, or the lack of it, in our industry. I know there are probably a lot more women, people of color and LGBTQ people out there searching for resources who may not even know this profession exists.
What We’re Going to Do
A group of XYPN members started talking six months ago and developed a diversity initiative to help attract and support diverse groups to our network and our industry. Working on this committee provides a bright spot in my life at a time when there’s been so much painful news across the country.
We hope more people will want to get involved in our initiative. And today we’re officially launching our mission statement and goals for the Diversity committee.
XYPN’s Diversity Committee’s Mission Statement
"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."
Here’s some more context on why we created this initiative and mission, directly from members of our Diversity Committee.
Our committee focuses on embracing our differences.
- "The initiative makes an important statement to the members and the industry: ALL of us belong in the profession and ALL of us matter." - Jason Howell, President, Jason Howell Company
- “In financial planning, our business doing well means our clients are doing well. I joined the diversity committee because I believe a more diverse group of planners will ultimately provide better advice and a better experience for our clients." - Gretchen Caldwell, President, Pure Planning
We’ll focus on our XYPN community.
- “Part of XY Planning Network's mission is to help bring financial planning to the younger generations. If we're going to do that, we have to think about what that generation looks like. By promoting diversity within our own planning community, we'll help reach diverse client populations, offer planning that's unique and tailored to them, and ultimately, achieve our mission in its most broad sense.” - Maddy Roche, Director of Getting Sh!t Done at XYPN
Develop better planners and people.
- “Current news headlines make the world appear scary. As Financial Planners, we encourage our clients to be proactive about their futures. A future which we all share as human beings in our town, country, and the globe. Our committee provides professional development for diverse planning issues plus a forum to encourage conversations whenever we need to chat with someone different. This way we can all become better informed while also supporting each other in our careers and lives.” - Dan Andrews, Founder, Well-Rounded Success
- “I started my own RIA in hopes of being the change that I want to see. I believe that people seeing others like them doing the things they want to do is the biggest motivator for others to get and stay involved. Whether it's advisors, clients, or prospects, I want people of color and the LGBTQ community to see more people like them when they come to me. Having more diverse perspectives can help make us all better.” - Brian Thompson, Managing Member, Brian Thompson Financial
How You Can Get Involved
We first hope to raise awareness of issues impacting diverse groups. A group of us will be presenting at the XYPN Conference in Dallas to discuss the challenges of belonging to a less-than-diverse industry and focus on ways to enhance it. We’ll share our experiences and some solutions that have worked for us. We also want to hear from you! Join us for the discussion and share some of your ideas too.
As we move forward, our committee has plans for events and a mentorship program to help continue expanding awareness and attract more diversity to XYPN. Take a minute to stop anyone with the “Diversity Committee” flag on their badges during the conference to ask questions and find out how to get involved. We hope to see you at our panel discussion.
About The Author
Cady North, CFP®, MBA, is the founder of North Financial Advisors. Her mission is to provide effective and affordable financial planning tools to women who desire to be their best self — financially, professionally, and personally. On the weekends, you can find her on her bike or hiking a trail in DC when the weather is nice.
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