Journal of Financial Planning: November 2020
Lisa A.K. Kirchenbauer, CFP®, RLP®, CeFT®, is the founder and president of Omega Wealth Management, LLC in Arlington, Virginia. Having been in financial services since 1985, she founded her business in 1999. She is a member of Strategic Coach, CEG Worldwide and her firm implements the Entrepreneurial Operating System and Engagement Multiplier. Her passions include comprehensive financial life planning and intentional business leadership.
Thirty-five years ago this past summer, I began work as a sales assistant at E.F. Hutton & Co. in Washington, D.C. There were 85 brokers in the office, four were women, none were Black. If you were looking for diversity, you looked to “the cage” or cashiering area that handled the checks and even cash in those days. The cashiering area was almost all Black employees.
Thirty-five years later, we have made progress, but not enough. Now, there are women advisers and people of color who are advisers, and yet, the progress has been slow (see the sidebar for more information). Truth be told, those numbers have hardly changed over the last 20 to 25 years. So, why aren’t we making more progress? What’s holding us back?
Before I begin to look at the reasons for the lack of progress, I want to set some ground rules. First, I know there will people who point to “success” stories within the industry and profession where women and people of color have built successful careers. Fantastic, and that doesn’t explain the serious lack of progress for most women and BIPOC (Black, indigenous, people of color) within our profession.
Second, going forward, I will focus more of my comments on what we need to do to increase racial diversity, but the same strategies can be applied in support of bringing and keeping women in the profession.
Third, I will use the term “profession” rather than “industry” because I believe that as a profession we especially need to make an effort to grow and diversify the types of people who enter the financial planning field. The American population is counting on that.
And finally, it’s not enough to just talk in terms of “diversity” and “inclusion.” We need to begin with a bigger why, and that’s representation. I believe it’s fair to assume that, at least to some extent, people like to work with, and seek advice from, people like themselves. People they can relate to and who they believe can relate to them. That’s where representation comes in. I’d like to give credit to the focus on “representation” to Tyrone Ross, Jr., financial adviser at 401stc, director of community at Altruist, and host of the Human Advisor podcast. He was featured in a very powerful issue of Bob Veres’ Inside Information called “Voices of Inclusion,” a must-read if you are ready to thoughtfully consider the issues currently facing our country and profession.
In short, it’s not enough to talk just about increasing diversity and inclusion; we need to have our eye on the prize around increasing representation of gender and race within our profession because in that effort, we are also likely to influence and positively impact a greater number of Americans with our advice. When a potential client realizes that there is someone who might better understand their background, challenges, and goals, they are more likely to engage with a financial planner and be willing to share more fully, which makes for better advice and better implementation.
The Importance of Inclusion
Recently, I began a search for a new adviser to help fill the shoes of our other female planner who decided to shift to part-time hours. The position description was carefully written and eventually the search involved New Planner Recruiting. Over the seven months it took to find the right candidate, we were fortunate enough to talk with a number of women candidates and, even more gratifying, women of color.
What I found in that process were stories of women who were well-qualified but consistently overlooked for adviser positions. Or, also not completely uncommon, rather than being promoted like their male counterparts, they were asked to fill in temporarily or for extended periods of time in administrative or operations roles, because they were deemed to be better at that (or more willing to “take one for the team”) than their male colleagues. The good news is that there are a number of qualified women and people of color planners/advisers out there; we need to make sure we are giving them the same opportunities and encouragement extended to other newer and younger planners.
For many firms looking to increase the diversity of their employees, this may seem like a dream come true. The real story here is why they were coming to my firm and willing to leave where they were. That’s where “inclusion” and other issues come in.
To be clear, diversity is the effort to diversify the types of people we have in our workplace. What we are also learning is that diversity isn’t just the “flavor-of-the-month” business strategy to make people feel good and create a better corporate reputation; diversity pays off.1
For many firms, once they have hired someone of color, they believe their work is done. The reality is that the next step—inclusion—is the harder and more intentional work that needs to be done if you truly want to retain diverse talent. As author Meghaan Lurtz puts it, it’s like the difference between being invited to the dance and being asked to dance.2 Further, Lurtz shares the facets of inclusion:
- Feeling safe
- Involvement in the workgroup
- Feeling respected and valued
- Influence on decision-making
- Recognizing, honoring, and advancing diversity
Inclusion is about honoring, and even celebrating, wide differences in who each person on the team is. When you begin to realize that these different viewpoints make us better planners and people, that’s when you know you are truly making progress.
The Element of Disconnection
Unfortunately, women and people of color often feel they can’t be themselves in the workplace. That leads to the phenomenon of “covering” or “code-switching” where you have to operate in different ways around different people. To be fair, it may no longer just be BIPOC employees who are feeling disconnected from themselves at work; it may even be the majority group, White males, who are also feeling the disconnect. For women, we have been feeling this disconnect from our natural tendencies and/or misunderstood from a communication standpoint for many years.
Just take the example of “apologizing” to someone when a fellow employee shares an unfortunate situation. Men assume the woman is apologizing when she says, “I’m sorry,” and taking the blame. For the woman, she is actually saying that she is sorry to see you suffer, rather than taking responsibility for what happened. A classic Men Are From Mars, Women Are From Venus moment.3
For people of color, it may be downplaying/adjusting their personal appearance, or keeping to themselves and not sharing much personally to avoid potential differences in approach or opinion or even conflict. After a while, not being able to be one’s self is discouraging, stressful, and downright exhausting, and certainly doesn’t feel like “inclusion” or lead to the best productivity from your team members.
Creating the Element of Connection
So, what are we to do? One way to frame this is to revisit my article, “The 5 Essentials Skills of an Exceptional Planner,” in the September 2014 issue of the Journal. When we think about the five skills: authenticity, deep listening, empathy, non-judgment, and curiosity, we can see some important ways to tackle the diversity/inclusion/representation issue.
Authenticity. We have to begin authentic conversations about where we are, and what is and isn’t working, and to have the courage to be vulnerable. And then we need to be able to allow others to do the same. Yes, you may inadvertently say something that isn’t ideal. Apologize in advance and start the conversation. Along the way, you need to add:
Deep listening. This is not “active listening” as many of us have learned; it’s about listening for the deeper what/how/why. At this point in the social justice movement in our country, it’s time for many of us to be listening deeply. How is their experience different from yours? How are their goals and dreams similar? In the end, it’s about seeing each other as human beings. When we can do that, much of the prejudice and misunderstandings can start to fall away. Which also leads to…
Empathy. If we can show up authentically and transparently, having listened deeply to our colleague, we can hopefully begin to feel some empathy for their experiences, challenges, and needs. Just because their experience is different from our own doesn’t mean we can’t take in the impact and have some empathy. Struggling to connect and understand? Perhaps you need to ask a few more questions and return to deep listening. Hopefully, as we begin to have additional empathy and see others as equal human beings, we can begin to move to:
Non-judgment. Looking into another’s eyes and heart and seeing the humanity. Allowing people to show up as who they really are. Calming the inner critic in each of us and allowing us to calm the external critic who notices differences in speech, approaches, values around work, money, and family. All of these areas are important in our work as financial planners. And from there, we can continue to grow, learn, and deepen our respect and appreciation of others different from us through…
Curiosity. As you seek to understand your BIPOC colleagues’ perspective more fully, try these phrases to help avoid judgment and a shutting down of dialogue: “Tell me more…”, “I’m curious about…”, “I am wondering…”. These are powerful phrases for greater understanding without judgment—something we need more of these days.
Fostering Diversity and Inclusion in the Profession
On a practical note, what can each of us be doing at our firms to foster greater diversity, inclusion, and representation within the profession? Here are some tips.
If you currently have women and/or people of color on your team, take the time to begin a thoughtful, safe conversation about the environment within the firm around inclusion. Looking for another way to get feedback before you begin the discussion? Try an anonymous employee survey tool like the Engagement Multiplier (engagementmultiplier.com) to get some honest feedback that can lead to productive conversation.
If you haven’t had the opportunity to diversify your team, consider expanding your candidate universe through networking at more diverse financial planning programs or at business schools at HBCUs (historically Black colleges and universities), or letting a professional recruiting firm run your selection process in hopes of reaching a wider array of candidates.
If you feel that there are differences between candidates at different programs and you are looking to help expand the diversity within in our profession, consider volunteering to help with resume/cover letter editing and mock interviews to help increase the number of well-prepared candidates we can all choose from.
Review your firm’s social activities and employee handbook to make sure you are providing a level playing field to all employees (single or married, White or Black, women or men), which also fosters a sense of inclusion and welcomes participation.
Support diversity initiatives within our profession such as Quad-A (Association of African American Financial Advisors), encourage team members to find mentors and networking groups where they can gain insights and support.
Create career paths that are transparent and equitable to all candidates, and don’t ask for past salary history, because that can misrepresent the capabilities of candidates.4
Be careful about judging employees on potential versus the ability to provide their capabilities. Men are often judged by their future potential within a firm, versus women and people of color who are made to feel that they have to work harder and/or prove their capabilities before being promoted or hired.5
Finally, a word to the leaders of financial planning firms. I was recently talking with a good friend and colleague, Yusuf Abugidieri, CFP®, partner and senior planner at YeskeBuie, about the issues of race within our profession. He shared something that is truly profound, and a great responsibility for each of us as owners and managers to consider: “Younger planners are trained to believe [whether in school or early on in their careers] that financial planning is the ‘ideal’ profession. It may be a utopian fantasy, but we see these skills [of intentionality and sensitivity] being utilized consistently in communication with clients and then we wonder…why do we sometimes fall short in using those same skills when communicating” about issues like race, diversity, and inclusion?
If we are to expand and, as FPA’s missions states, “elevate the profession that transforms lives through the power of financial planning,” we need to start by intentionally seeking to expand the reach of our profession, to become even more inclusive and welcoming, and to proactively reach out to increase the representation of women and BIPOC who in turn can help us reach vast groups of people who are underserved. In the process, we will move beyond just being for-profit businesses and become a profession with a mission to truly help others.
- See the May 2020 McKinsey & Co. report, “Diversity Wins: How Inclusion Matters,” available at mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters.
- See “How Diversity Initiatives Often Fail in the Financial Planning Profession by Neglecting to Consider Inclusion,” by Meghaan Lurtz posted Aug. 10, 2020 at kitces.com/blog/diversity-inclusion-women-minorities-lgbtq-financal-planning-industry.
- See That’s Not What I Meant! by Deborah Tannen, Ph.D., and Men Are From Mars, Women Are From Venus by John Gray, Ph.D.
- See the Harvard Business Review management tip, “Don’t Ask Job Candidates for a Salary History,” posted Aug. 4, 2020 at hbr.org/tip/2020/08/dont-ask-job-candidates-for-a-salary-history.
- See the Harvard Business Review management tip, “Don’t Let Racial Bias Creep into Work Assignments,” posted June 30, 2020 at hbr.org/tip/2020/06/dont-let-racial-bias-creep-into-work-assignments.
Sidebar: The Stats
CFP Board data (released at the 2019 Diversity Summit) continues to confirm that women and people of color are severely underrepresented in the financial planning profession:
- While women represent 52 percent of the U.S. population, just 33 percent of all financial advisers and only 23.2 percent of all CFP® certificate holders are women.
- Hispanics and Latinos make up 16 percent of the population, but just 7 percent of advisers and 1.9 percent of CFP® professionals.
- African Americans account for 13 percent of the population, 8 percent of advisers, and only 1.5 percent of all CFP® certificate holders.
Sidebar: Tools to Use
FOR ADDITIONAL READING
- “Diversity and Inclusion Efforts That Really Work,” Harvard Business Review
- “Moving Beyond Diversity Toward Racial Equity,” Harvard Business Review
- “Getting Over Your Fear of Talking About Diversity,” Harvard Business Review
- “Become a Better Ally to Your Black Colleagues,” Harvard Business Review Management Tip