Increasing racial and ethnic diversity in the investment advice sector depends on building support for the effort from the bottom up and making it a strategic imperative, according to a report released Wednesday.
The study, Diversity in Action: How to Sustain the Financial Planning Profession, provides case studies of several financial firms that have implemented diversity initiatives. One of the keys to success is to create volunteer, employee-led groups that foster an inclusive environment and amplify the same tone from executives.
“Many of these firms have been effective in enacting change within their organizations because they were intentional in identifying barriers, creating solutions that address them, and holding leadership accountable for individual behavior and firm-wide practices,” the study said.
The report, sponsored by the Certified Financial Planner Board of Standards Inc.’s Center for Financial Planning, was released on Wednesday, the first day of the center’s virtual diversity summit.
The report provides case studies of diversity, equity and inclusion efforts at Charles Schwab, Fidelity, HoyleCohen, Merrill Lynch Wealth Management, Northwestern Mutual and Wetherby Asset Management.
“The case studies in this paper underscore how these firms not only understand the business case for diversity but have thrived because they embedded it so intricately in their work,” the study says. “For many of the firms we highlight in this paper, [diversity, equity and inclusion] strategies do not exist as standalone initiatives but instead are threaded into their overall strategy, and many of them attribute their employees’ and customers’ satisfaction, innovation, and financial growth to this deep integration.”
The report also outlines tactics that other firms can adopt and scale for their own diversity programs.
“Racial, ethnic and gender diversity are crucial to the sustainability of the financial planning profession, but we will only be able to court, recruit and retain people from these communities if we are intentional in our diversity, equity and inclusion work,” CFP Board Chief Executive Kevin Keller and Center for Financial Planning managing director D.A. Abrams wrote in a letter in the report. “The national racial reckoning also presents an opportunity for the profession to show up for people of color and stand in solidarity with them.”
The challenge of increasing diversity in the financial advice sector is illustrated among CFP professionals. In 2019, the number of Black and Latino CFPs grew by 12%, the highest increase on record. Yet they still represented only 3.8% of the approximately 86,000 CFPs in the United States last year.
“There is still significant work to be done,” Keller said in opening remarks at the summit.
The leadership changes coming in June, which also include wealth management and digital unit heads, come as the firm pushes to offer more comprehensive services.
Strategist sees relatively little risk of the university losing its tax-exempt status, which could pose opportunity for investors with a "longer time horizon."
As the next generation of investors take their turn, advisors have to strike a fine balance between embracing new technology and building human connections.
IFG works with 550 producing advisors and generates about $325 million in annual revenue, said Dave Fischer, the company's co-founder and chief marketing officer.
Five new RIAs are joining the industry coalition promoting firm-level impact across workforce, client, community and environmental goals.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
