"Firms that ignore the changing face of wealth in this country will be poorly equipped to handle emerging markets and will ultimately end up leaving money on the table."
The report includes research about the root causes of the underrepresentation of blacks and Latinos in the financial planning profession based on surveys, phone interviews and focus groups with key constituent groups currently or potentially involved in the industry: hiring professionals at firms, CFP planners, consumers and black and Latino professionals interested in joining the profession.
Three key reasons for the underrepresentation of blacks and Latinos in the profession were identified: lack of interest by blacks and Latinos due to economic inequality and cultural norms – lack of wealth passing down over generations, for example — firms' hiring and onboarding practices and clients' biases.
But the weights given to these reasons differed widely by groups. While consumers tended to believe that people of color were not very interested becoming financial planners, CFP professionals across ethnic and racial groups noted the unclear career path for people of color and lack of serious commitment by firms to increase diversity. Black and Latino prospects, in contrast, identified racism as the root cause for their underrepresentation in the profession.
The CFP report concludes with a Call to Action that contains myriad recommendations for what firms, the center itself, CFP Board registered programs and "influencer organizations" (defined as non-profit organizations focused on people of color and/or working to advance financial wellness) can do to increase diversity in the planning profession. Here are just some of those recommendations.
For firms:
- Embed diversity, equity and includes in their growth strategy, focusing on their workforce, clients and compensation models
- Recruit diverse candidates and partner with minority business association on internship programs
- Educate owners, senior leaders and managers about the value of a diverse workforce
- Build and sponsor networks of black and Latino financial planning professionals as well as in-firm mentoring programs
- Support black and Latino prospects who may be deterred from pursuing CFP certification due to the costs of test and preparation by subsidizing or covering those costs and allowing study time away from work
- Actively support pro bono efforts by employees to support communities of color
For the center:
- Continue its Diversity Advisory Group and Diversity Summits
- Expand "I am a CFP Pro" education campaign which showcases diverse, young CFP planners and their reasons for joining the profession
- Connect CFP certification candidates with networks of CFP professionals
- Administrator scholarship programs for underrepresented individuals in the profession
- Develop a toolkit of initiatives and support mechanisms to assistance black and Latino candidates
For CFP board registered programs:
- Promote existing programs such as the "I am a CFP Pro" program and CFP Board Mentorship Program
- Promote the CFP Board Career Center which provides job and internship listings
- Identify speaking and exhibit opportunities for the center at program events
The report notes that "this paper is just the beginning of the conversation."
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