In corresponding with fellow advisors, we got onto the topic of DEI in the financial services industry. DEI stands for diversity, equity, and inclusion. Our discussion was mostly from an employment perspective on how to recruit and retain diverse talent, but also on how to market to diverse clientele (read, non-white clients); and, just why the industry is so white and male dominated. We had no shortage of ideas as to why this is, but we did realize that the industry itself is partially to blame. For decades, it’s been so insular. For job seekers from outside, just understanding the available opportunities can be confusing in an industry with a focus on commissionable products, and vague, confusing, mostly unregulated titles and positions. An industry focused on account size, which school you attended, who you play golf with, and sometimes quite literally, family connections. This led to a discussion about titles, and to a discussion about the overall lack of financial literacy in our nation as a whole. So, why isn’t the financial services industry more diverse? Why don’t we see more marketing toward diverse clients? Turns out, the reasons are many, answers are few, and the problem is way beyond one blog post.
Everyone involved had ideas. One idea, was that it mostly came down to some old familiar -isms like racism. Racism likely plays a part, but surprisingly, may not be the biggest issue! Our general consensus was that the bigger -isms seem to be ageism, classism and elitism in the industry. For decades, the industry as a whole had what some jokingly referred to as PMS – that it is, Pale, Male, and Stale. Key hiring managers, vice presidents, team leads were all predominantly older, white men. After all, they could be trusted with the money, right? That’s been the long-held perception even though some argue that women make much better money advisors. This isn’t a bash the white guy post; it’s just how it has been for a long time, or at least how it’s perceived.
Classism, ageism, and elitism are alive and well in financial services. For some bigger service providers, they still tag resumes based on school name with top school candidates of course getting to the head of the line. Whether that candidate has any actual investment or financial planning advanced education seems beside the point. Hiring managers are still swayed by elite names like Stanford and Yale on applicant resumes. It seems they also like the candidates young. Older career changers with life experience need not apply! If the candidate did have investment or financial planning courses, was the time value of money concept taught that differently at Yale than at say, College for Financial Planning or Florida State University? Likely not; math is math. In the end, it’s really life experience and people skills that count and this seems to get overlooked or at least undervalued.
Technology, and diverse affiliation groups like the XY Planning Network, have made it possible for those underrepresented to launch on their own. More advisors are leaving traditional firms, and opting to create more niche-focused firms. In doing so, they are able to hire more diverse candidates and to market to more diverse clientele. One colleague I know set up her own firm and focuses solely on women in the six-figure income range. She didn’t even prospect for male clients in the early days, and she didn’t need to. Today, she has a waiting list for women who want to become full time clients. The choice to offer services to women was intentional and it was her choice because at one point, she was in their shoes. Now, she is the decision maker.
As for marketing, imagery from the big national players in financial services can be generally pretty bland and some argue, white-centric. It seems to be all about boating, golfing, running wineries, and these days, even flying. Apparently, this is what the big brokerage firms think retirees are into. Some of the firms are getting better. They’ve taken to updating their ad campaigns by using those same scenarios, but adding an African-American couple into the shot instead of a white couple. Credit where credit is due, but that’s still missing the point from the client side.
Let’s face it, marketing is really hard. I get that. I guess their thinking is that the media pieces should be generic, non-offensive, interchangeable, and yet somehow convey success? I don’t know. I do know that it doesn’t meet the client where they are. Most ads are solely focused on retirees and never, or rarely, offer anything to Gen-X, Gen-Z, or even Gen Alpha. They need services, too.
The difficulty of marketing and the mix of ageism, elitism, classism, and fear of offending anyone with marketing materials, makes for a bad combination. The industry is not doing a good job of recruiting and retaining diverse candidates (but it is getting a little better), and it’s not doing a good job of advertising to diverse clientele. Society is rapidly changing. The industry better figure this out and fast. To quote the late, great, Ralphie May, “we’re all fingers on the same hand. We may not look alike, but we are all needed.”
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