“It’s been the year of diversity; it’s really taken hold,” said Kate Healy of TD Ameritrade Institutional, during the firm’s annual LINC conference for advisors — which is taking place in San Diego this week.
Across the industry, professionals have homed in on the lack of diversity and inclusion in financial planning and begun to take steps to rectify the condition. That was evident in the first-ever diversity summit sponsored by the CFP Board’s Center of Financial Planning last October that brought together leaders and advisors from across the profession.
But her biggest takeaway from the summit, said Healy, TD Ameritrade’s point executive on D&I and “Generation Next,” was the center’s research confirming the startling lack of diversity in the profession. “We all knew the numbers are low,” Healy recalled, but “when you see it in your face” that only 3.5% of the 80,000 certified financial planners are Latino or African-American, “you know it’s not right.”
It also doesn’t reflect how the country looks now, and the country is changing faster than many advisors realize, she said. Millennials, she pointed out, are the most diverse generation in the nation’s history, and they tend to react negatively to the lack of diversity in any group, including companies that they might otherwise consider working for.
Diversity isn’t just about race or ethnicity. It’s about having a diverse array of experiences and insights that comes from being a woman, for example, or a career changer or a former member of the military. Attracting a more diverse population — including those three examples above — to the profession can also help solve the talent shortage, Healy suggested.
TD Ameritrade Institutional is doing its part in exposing younger people to the profession. This marks the 10th year that college financial planning students are attending the RIA custodian’s annual LINC event.
Over the years, 370 students have attended the national conference, Healy reported, from 30 colleges and universities. This year, there are 63 students from 30 schools attending; five of those 30 schools are historically black colleges and universities (HBCUs): Delaware State, Prairie View A&M, Olivet Nazarene University, University of Texas Rio Grande Valley and Winthrop University.
The firm doesn’t just welcome students from those schools; it pays for the students and their program directors to attend. Moreover, two of the HBCUs on the above list received TD Ameritrade Institutional ”emerging grants” in past years of $25,000 to help those schools establish their financial planning programs.
What can individual advisors do to diversify the advisor workforce and to help address the talent shortage? One step is to understand the value of diversity in their firms and to build a staff that is more diverse in terms of gender, race, ethnicity and even sexual orientation.