CFP Board Targets 'Systemic' Diversity Issues

CFP Board CEO Kevin Keller.

The Certified Financial Planner Board of Standards’ first Diversity Summit on Oct. 23 in New York was unlike most advisor-focused conferences. It’s not often (if ever) that you find numerous wirehouse brokers mingling with a bunch of NAPFA fee-only RIAs. I can’t recall seeing RIA custodian leaders like Mark Tibergien of Pershing Advisor Solutions and Tom Nally of TD Ameritrade Institutional in the same room as Andy Sieg, head of Merrill Lynch Wealth Management. It’s not usual that the primary sponsors of an advisor event would include both Morgan Stanley and the Charles Schwab Foundation, or that the number of female attendees seemed to match the number of male attendees.

But the most glaring difference from standard advisor conferences was the high number of people of color attending the summit; at most such conferences the number of African-American or Latino or Asian-American advisors would be in the low single digits at most.

That diversity of summit attendees and sponsors and speakers reflected the diversity and inclusion issues that the professional advice-giving industry faces, as noted by CFP Board CEO Kevin Keller in his opening remarks.

Reporting that less than 3.5% of the 82,000 CFPs in the United States were black or Latino, Keller said that the lack of advisor diversity can’t be solved by one individual or group, but rather “requires all of us to be engaged, find solutions, and take action.”

The Summit was convened by the CFP Board Center for Financial Planning, which was founded three years ago and is led by Marilyn Mohrman-Gillis, Keller said, to address “three systemic issues” faced by the planning profession. Those issues: to increase the number of women and people of color in the profession, to attract younger people to the profession, and to expand the numbers of faculty members at the more than 200 colleges and universities in the country with financial planning degree programs. Keller called the center’s white paper on racial diversity in financial planning a “motivational road map,” saying “now is the time to put words into action” to create a “more diverse and sustainable financial planning profession.”

In his remarks, Sieg called Merrill Lynch’s partnership with the CFP Board both deep and strategic, noting that Merrill’s force of 3,900 CFPs constituted the “largest on the Street” among the wirehouses. As for diversity, Sieg mentioned that millennials “aren’t running in the direction of diversity; they notice it by its absence,” called diversity an “economic imperative” and argued that “fundamentally, this a leadership issue.”

Carla Harris, vice chairman of wealth management at Morgan Stanley, addressed the business case for diversity. “There’s not one industry” in today’s world, the 31-year Wall Street veteran said, “that’s not competing around innovation. So here’s your business case: You need a lot of ideas to get to that one idea” that will foster innovation for your company. “Ideas,” she said, “are born of perspective; which is born of experiences; which are born of people.”

So, she argued, you must “obtain and retain” a diverse workforce to eventually yield more innovation. Follow the IAC approach, she argued, to promote diversity: Be “Intentional about getting the right people in the right seats at the right time.” If millennials “don’t see somebody that looks like them,” she said, “that’s not the company for them.”