Being Proactive Is Crucial for Advisors

What Can Be Improved in This Industry and Why

Given that the financial advisory industry is short on specialists, the industry needs to improve its diversity and inclusion efforts to attract and retain employees from different groups.

To fulfill the mission of expanding access to financial advice to all corners of the country, the advisory profession must reflect the society it operates in. Believing diversity and inclusion is one thing, but actually taking action is an entirely different matter.

Driving progress on diversity, equity and inclusion means having open conversations and developing an understanding of where the industry stands in its journey to expand diversity and opportunities for underrepresented communities.

How to Achieve It

The latest workshop in the series on diversity and inclusion from the Financial Services Institute, “Doing The Work: Actionable Diversity & Inclusion Success Planning”, featured Lazetta Rainey Braxton, an advisor and recognized diversity and inclusion consultant to a vast range of financial services firms.

As part of the workshop, Braxton focused on the business case for diversity and inclusion, in addition to their obvious social benefits.

Citing a recent McKinsey & Co. report that surveyed more than 1,000 companies worldwide, she noted that businesses with higher levels of gender and racial diversity were more likely to outperform their peers financially. The reason for that is that their employees were happier, healthier and more engaged — which, unsurprisingly, led them to be more productive.

“We are beyond questions about whether diversity, equity and inclusion have an impact on the bottom line, so this is no longer a question of why we should be having this conversation,” she said. “It is a question of how we implement initiatives that will be impactful.”


Braxton mentioned that such efforts can start with how firms build their teams. For years, she said, businesses have focused on IQ or hard skills when hiring or forming their executive teams — where they went to school, the designations they achieved or how many assets or employees they managed.

That is now changing. EQ, or emotional quotient, has been elevated, she said, with softer skills like self-awareness and empathy becoming more critical. In today’s landscape, Braxton noted, it is very difficult to have a productive dialogue around creating a diverse, inclusive and welcoming culture without possessing these features.

“If your firm wants to stay ahead of the curve and be relevant in the future, having this conversation is not just about reacting to today’s headlines. It is about implementing a business strategy,” she said. She noted further than the clients of tomorrow — Generation Z — are far more likely to make consumer choices based on which businesses reflect their values.

What is Already Being Done

Thus, a large number of companies are embracing this message. Executives on different levels and financial advisors confirm that firms are increasingly encouraging these changes and putting steps in place to act on them.

Today we can see that a growing share of companies have established clear multiyear strategies — backed up by concrete goals and incentives — for strengthening diversity and inclusion within their workforces and leadership teams. They are increasingly aware that ensuring diversity means embedding best practices and awareness of this goal throughout each employee’s “life cycle” within the company, from recruiting and onboarding to development, retention and eventually, exit and separation.


Beyond this, firm leaders are increasingly aware that they must personally get involved in training, as well as the development and execution of their diversity and inclusion strategies. They are more powerfully committed to providing resources and avenues for staff to express their own concerns, stories and history. And they are putting in place specific procedures to measure their progress and hold themselves accountable to their goals.

Most company leaders realize that they have a long way to go when it comes to creating truly diverse and inclusive professional cultures. What is obvious and encouraging, though, is that people are committed to doing the work.

The Advisory Industry Will Prevail

The recent trend of powerful people taking a proactive role in promoting diversity, equity, inclusion and belonging (DEIB) is also happening in the advisory profession, with programs and profession-specific courses to help financial advisors on their own DEIB journey emerging more over the last year.

Various researches show that the U.S. is diversifying faster than predicted, with the most recent census data showing that 4 out of 10 Americans identify themselves with a race other than white. With, the Asian American and Hispanic/Latino populations, the fastest growing.

 The looming shortage of financial advisors means people in the profession need to improve their DEIB efforts to attract and retain individuals from different groups of society.

As a profession, advisors’ economic vitality depends on their ability to create inclusive environments that foster belonging among diverse employees and clients, Joelle Martinez, executive director of the Latino Leadership Institute, pointed out in a Q&A for the Journal of Financial Planning.

Next Steps

Here are several things that can be done to start your DEIB journey.


These initiatives should start with the CEO. The chief executive sets the tone. When a CEO incorporates DEIB into an organization’s values and culture, it can lay the groundwork for the entire organization. The leader is the one who defines the culture of a company and they must do so authentically.

Starbucks CEO Howard Schultz noted in a Startland News webinar that “Diversity and inclusion is not an HR function anymore. It is a function of the entire organization.”

Another important thing in this direction is continuous learning. It’s important to create an inclusive environment for all team members, said Luz Gonzalez, founder and CEO of EQ Refined, a diversity and inclusion consultancy company.

To do this, you have to take courses on your own. Learning about DEIB is an ongoing journey.

Carson Group recently developed a complimentary diversity, equity and inclusion course that features industry experts like Ajamu Loving, Jocelyn Wright, Marguerita Cheng and Sonya Dreizler.

The Latino Leadership Institute recently launched its Insight to Inclusive Leadership course, which features six 90-minute modules and a proprietary self-assessment for participants. Its cohort format helps participants forge accountability friendships to encourage DEIB work. LLI recently partnered with the Financial Planning Association to bring the program to financial planning practitioners.

Another option is the six-week Certificate in Diversity and Inclusion from Cornell University, which Braxton recently completed. “There is a body of knowledge that surrounds DEIB,” she said. “Any particular discipline requires that you engage in theory along with practice.” Rather than one-off training, ongoing education is the key. One-off training “is usually on topics that feel very heavy and negative,” Braxton said.

“Oftentimes companies will have training that’s one-and-done,” Gonzalez said. “That’s not how it works.” Gonzalez said working to develop a successful DEIB plan improves companywide communication, helps all stakeholders be more creative and encourages leadership development.

What can also be done for the same purpose is to become a sponsor. Shortly after Cesar Milan, the dog whisperer, came to this country, actress Jada Pinkett Smith saw and appreciated his talent and paid for him to take English lessons. This is sponsorship.

“Sponsorship has an economic component to it,” Braxton said. She noted that sponsorship can include paying for a firm’s diverse stakeholders to attend a conference of organizations to which they belong — like Quad-A or the Association of Latino Professionals for America — offering tuition reimbursement or handing over books of business.

DEIB is a specialty, just like any other. When you need to up your marketing game, you hire a chief marketing officer. When you need help with your communications efforts, you hire a chief communications officer. DEIB is no different. You don’t necessarily have to hire a chief diversity officer, but you can start by hiring a consultant to help you get started, and it could be helpful to have a firm that is acquainted with the profession. 

If you do create a permanent position, you need to give the person the resources and time they need and embrace it throughout the company.

“Diversity, equity and inclusion should be part of every department,” Gonzalez said. “It needs to be intermingled with every aspect of the organization.”

How to Be Proactive

“If you’re doing your own financial planning, the one thing you can’t really do yourself is objectivity”, said Ajamu Loving, assistant professor of Finance at The University of North Texas, Dallas and proprietor of Loving Consulting. Employing some of the tips in this article could help advisors find objective, forward-looking solutions.


 “You make it harder for yourself when you aren’t forward-looking and embrace the changes that are coming,” Loving said. He feels the need to recognize that financial advisory is a service industry and advisors are here to serve the needs of the people, so as the people become increasingly diverse, advisors also need to recognize the necessity of having an increasingly diverse workforce. By being proactive in that direction they show respect and understanding of people’s needs and interests and become closer to their prospects.


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