We know that financial services is not as diverse as the country as a whole. We also know that there is tremendous business opportunity associated the changing demographic. There is a saying that the first step to solving a problem is acknowledging there is a problem. If that is the case, then nearly half of those we surveyed in our research report, Diversity and Inclusion in Financial Advice in 2020, do not think the lack of diversity is a problem in the financial advice business. Only about a third of respondents said their firm attempts to foster a racially diverse staff.
The report highlights the obstacles to greater diversity in our industry. The ways that firms recruit advisors needs to change in order to yield different results. How firms require new advisors to develop, their book of business does not work for some minorities. The report reinforces the changing US demographics and the opportunities that the shift in the population will present. There are compelling reasons to rethink how firms recruit and develop new advisors. Women and minorities will be controlling more wealth, so it is imperative that financial services firms’ staff reflect their potential client base.
The report then presents actionable steps that firms can take to become more diverse and inclusive. It outlines the policies and programs that drive the greatest impact in terms of diversity and inclusion and those that do not work. What survey respondents said was most effective may be surprising.