Boosting Representation in Wealth Management

Some key statistics showcase the current diversity deficiencies across the financial advice industry:

• A 2021 report by the Certified Financial Planner Board of Standards found that more than 80% of financial advisors identify as white . Furthermore, less than 6% identify as Black or Latino even though they represent far higher percentages of the total population.

• Women still only make up less than 20% of all financial advisors based on an analysis from Cerulli Associates . The percentage of female advisors decreases further in wealth management roles.

• Surveys indicate over three-quarters of minority households would feel more comfortable working with a financial advisor who understands their ethnic background and culture. However, finding one remains extremely difficult.

Firms interested in improving diversity need to focus on talent pipeline development and recruiting those that come from underrepresented groups in the industry. Strategies can include partnerships with minority professional associations, developing internship/mentorship opportunities, and building relationships with colleges & universities that serve minority populations.

In additional to representing the right ethical choice, prioritizing diversity also fuels innovation and business growth. The changing demographic landscapes means those firms lacking diversity will struggle to capture emerging markets opportunities. As Millennials and Gen Z’ers age into their peak earning years, having advisors that resonate with their values and culture becomes increasingly vital.