February 5, 2014

Advisors: Are You Ready for the 1 Billion?

In Investment Advisor’s October 2013 cover story, “Where Are All the Women?” Danielle Andrus suggested that financial firms need to reflect the diversity of their client base. That’s where things are going to get interesting, because there’s a mushrooming population of wealthy African-American, Hispanic and Asian-Indians in the United States. Moreover, 1 billion women are projected to enter the global economy over the next 10 years. Does your firm align with these trends? 

Jyoti Chopra of BNY Mellon told me that firms which recognize this trend from an investment management perspective are developing strategic approaches, “pinpointing at the geographic level and developing investment product mixes to target the burgeoning U.S. population” of those affluent African-, Hispanic- and Asian-Americans.  “This,” Jyoti said, “is where we’ll see the greatest success.” 

For example, in the Asian-Indian community there is a high need for estate, succession and education planning, says Jyoti, ‎who is Global Head of Diversity and Inclusion at BNY Mellon. She arguest that while “education planning is often a high focus, yet many clients are unaware of the new types of investment vehicles available. Similarly, on the business front, many have joint family-owned businesses, so succession planning becomes important.”

“Advisors can step in and fill this gap,” says Jyoti. “There is a tremendous opportunity from a marketing and go-to-market approach.” Perhaps this is why BNY Mellon continues to develop and enhance its global strategy on diversity and inclusion. 

Diversity and Inclusion at BNY Mellon

BNY Mellon takes a holistic approach to its diversity and inclusion initiatives.  From a recruiting perspective, the company is visible in the marketplace with diversity-focused career expos, developed a Signature Leadership Forum designed to bring thought leadership to diverse talent in banking and financial services, and has formed strategic alliances with centers of influence such as ALPFA and the Council of Urban Professionals, among others.

In terms of its overall philosophy, Jyoti says that “BNY Mellon developed a global strategy formulated with input from a cross-section of the organization that is intended to be flexible and can be customized at a very local level.”  Theirs is a four-pronged approach: 

  1. Workforce Centered
  2. Workplace Focused
  3. Marketplace Led
  4. Leadership Driven 

Jyoti says more and more clients ask for and are interested in diversity information in the RFP process because there is a clear recognition that diverse teams are more productive and bring valuable thinking.

A future trend to watch, says Jyoti, is women in the workforce. Projections from major consulting firms predict one billion women will enter the global workforce in the coming years.

If you agree with Danielle Andrus that financial firms need to reflect the diversity of their client base, then recruiting and retaining women advisors should be an important focus for your advisory firm. 

Recruiting and Retaining Women Advisors 

Kim Dellarocca of Pershing says that women are better able to “align with the investor of the future” and tend to possess the communication skills “that work better across multiple gender groups.”

The challenge now, says Kim, who is Pershing’s Global Head of Segment Marketing and Practice Management, becomes how to recruit and retain successful women. What are the best practices? 

Kim said that one of Pershing’s advisory firm clients who had a practice focused on doctors tapped the pharmaceutical industry for senior female executives who know how to sell and connect with physicians.  Those female executives, Kim said, had “an existing book of business in that market and knew how to sell and build relationships.” Since the firm already had portfolio managers, it “only had to train these women on wealth management since they were already seasoned executives.” 

In terms of best practices, Kim says it “isn’t enough to say you want to recruit women. Look at the associated experience and ask yourself: Are you really serious about it?” For instance, she says some firms are looking at compensation differently, providing a higher base salary versus high variable compensation that may fit better women advisors who are single heads of households. 

She also suggests that those firms that are looking to attract women employees should focus on issues like flexible work hours and maternity leave.  “Look at how you’ll manage and message it with the women you hire and their colleagues,” says Kim.

Whether you are part of an independent advisory firm just beginning to explore different recruiting initiatives, or you are part of a larger organization like BNY Mellon with a fully fledged diversity and inclusion program, there are resources to assist you, such as Pershing’s Practice Management website, www.pershing.com/ideaswithoutlimits, and a Feb. 11 webinar featuring advisor Caleb Brown and recruiting expert Mindy Diamond: Positioning Your Firm to Attract and Recruit Talent.

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