Monetary advisory companies wrestle with lack of range, advisors say


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The financial advisory industry continues to struggle with efforts to promote diversity, although more companies appear to be putting the issue on the topic in their recent recruits, according to the top companies in CNBC’s annual FA 100 rankings.

The profession has long been dominated by white men.

For example, Black and Hispanic certified financial planners made up only 4% of the total of 87,784 CFPs in 2019 – despite making up nearly 30% of the U.S. population, according to a CFP Board report released last year. According to a 2019 report, women have made up about 23% of the CFP for a decade, despite making up more than half of the US population.

While financial planners are only a subset of the full spectrum of “financial advice”, their statistics are in line with those of the broader industry.

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“Our industry has many of the same problems as our society,” said Alison Berman, president and CEO of Palisade Capital Management, ranked 88th on CNBC’s FA 100. “These systemic problems are extremely complex.”

The industry has made some improvements lately. For example, the number of Black and Hispanic CFPs rose 12% in 2019, the highest increase on record.

Diversity and inclusion efforts gained attention after the murder of George Floyd by a white police officer in Minneapolis last year, which sparked national and international protests for racial justice and led many US companies to publicly promote diversity initiatives and dynamism.

Advantages of diversity

Aside from being a moral imperative, there is also a strong economic case for cultivating diversity, whether it is gender, race, ethnic, sexual, or other orientation.

For one, a diverse workforce can attract new customers who top companies say may prefer to work with consultants who look like them and understand them.

It’s becoming an increasingly important topic: People of Color are expected to make up the majority of the US population by 2045 and will be the “driving demographic engine of the nation’s progress,” according to the CFP board of directors.

“When a client works with you, they want to feel confident that they have someone to address their issues,” said Manal Fouz, chief compliance officer at Azzad Asset Management in Falls Church, Virginia, ranked 39th in the world FA. ranked 100 by CNBC. “The more diversity you have with your employees, the more they can connect with their customers.”

Evidence shows that different companies can hire (and retain) better talent, among other benefits; they are often more creative and innovative.

Based on research and case studies, the CFP Board has compiled a list of recommendations for companies to effectively promote diversity among workers.


There seem to be many reasons for the persistent lack of diversity in the industry.

Some of it is due to limited awareness of the profession among young adults and students, the counselors said. Even companies that want to increase their diversity have a difficult time due to the relatively limited pool of candidates, it said.

“It’s a mandate for us; it’s part of our strategic plan to develop diversity and inclusion, “said Kelly Noonan, chief operating officer at Willow Creek Wealth Management in Sebastopol, Calif., number 77 on CNBC’s FA 100.” But we’re just not getting the applicants. “

One has to be wealthy in this country to understand that this profession even exists.

Alison Berman

President and CEO of Palisade Capital Management

The company hopes the ability for advisors to work remotely due to the Covid pandemic will make it easier to hire diverse talent from across the country.

Some firms may inadvertently recruit from pipelines that are traditionally white or male, Berman said.

However, according to a survey by the CFP Board, industry awareness is one of the least mentioned reasons for the underrepresentation of People of Color.

Lack of opportunities and lack of mentors or support were cited the most frequently by black and Latin American CFPs, according to the survey.

Research shows that mentoring programs can increase the proportion of Black, Hispanic, and Asian-American women, and Hispanic and Asian-American men, in the leadership ranks by an average of 9% to 24%.

In third place are barriers based on upbringing, origin and culture (e.g. economic inequality).

“You have to be rich in this country to understand that this profession even exists,” said Berman. “You have to have money to know that it’s an option at all.”

Looking ahead to 2022, CNBC’s Financial Advisor Summit will bring together forward-thinking advisors like the FA 100 firms to hear from industry heavyweights about the state of markets and share innovative ways to meet their clients’ needs. Register to join us on December 8th.

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