Merrill Lynch says 31% of its trainee advisors are people of color. Other broker-dealers also insist they are working to raise their own levels of diversity and inclusion.
But a recent New York Times report, “This Is What Racism Sounds Like in the Banking Industry,” exposed how deep racial discrimination can be in large institutions. Jimmy Kennedy, a JPMorgan client and former NFL player, was told he was essentially too black to obtain “private client” status, while JPMorgan financial advisor Ricardo Peters was denied a role as a private client advisor.
Zaneilia Harris, president of the RIA Harris & Harris Wealth Management Group, has seen the problem firsthand over her 20-plus years in financial services. The author of “Finance ‘n Stilettos: Money Matters for the Well-Heeled Woman,” who has worked for many of the biggest names in the business, spoke recently with ThinkAdvisor about racism in the business and how to overcome it.
THINKADVISOR: What were your first thoughts after reading the story in the Times?
HARRIS: My first reaction was that it’s really sad that we are still dealing with aspects of inequity in financial services. It’s unfortunate.
There is a lot of talk at the top on the inroads for new people coming into the industry and all the opportunities. But when I look at the trajectory for those [who look like me] to get to the top, the [Times’] story shows no trajectory.
When you look at the leadership [in financial services], there is a strong bias that black people in particular face. We are really struggling to make headway in these large financial institutions.
It leads those who join them to abandon ship and leave the industry or start their own firms. The advisor in the story substantiated that — by leaving to start his own firm.
What’s your overall view of the industry’s limited diversity and inclusion?
This is the reality that gets talked to but sees no real action. When we start to recognize that we all bring something to the table, we all benefit from our varied experiences. But when bias and the scarcity mentality rule, it affects true growth.
There’s still a scarcity mentality — i.e., there’s only so much success in financial services for a small number of people, so I have to protect that [opportunity for myself] at all costs.
I worked at Merrill Lynch during the time of a pending class action discrimination lawsuit; BofA, which bought Merrill Lynch, paid out in 2011. Twelve of the plaintiffs won, including some black advisors, and then after that a group of women won their discrimination suit.
I was there back in the 2007-2008 timeframe. Today, the situation is still the same in financial services. Nothing is being done actively [to broaden leadership diversity]. There’s a lot of talk about diversity and inclusion, but until we see changes at the top — it is all [just] talk.
(Merrill’s parent firm, Bank of America, says that as of 2018, 4.2% of its high-level executives were African American, 3.9% were Hispanic/Latino and 7.3% were Asian Americans; as for first/mid-level management, these figures were 9.4%, 12.6% and 11.7%, respectively.)
What should real change look like?
Changes at the top mean women of color, women in general, black men and other men of color in C-suite and EVP positions that can make change because of leadership and a desire for diverse teams and diverse perspectives.
Right now, the glass ceiling — specifically for black women in financial services — is very high. It seems unattainable to get to senior management.
I’ve been in the industry, including time spent on accounting and other work, my whole career. If you ask me if the JPMorgan situation is isolated, my answer is: I do not think so.
I felt, and still feel, that companies like Merrill are very good at recruiting but not at keeping black advisors [so they can move into management]. I went there to succeed, but what I saw was a lack of progression among peers who look like me.
Overall, the situation in the industry is disheartening. I hoped for an opportunity to grow and mature as an advisor there. Merrill was viewed so highly at the time and still is in some regards as a wealth management firm today. Yet black advisors there [and more broadly] are not succeeding as I and others would like to see them do.
And this leads black advisors to go independent?
I’d found something that I love to do and am passionate about, so I made the decision to start my own firm and now can service clients in my community and in ways I’ve felt would fit and bring value to the community.
The biggest issue is that we do not see the needle moving. It should have moved, even in the recruiting of black advisors. This could have produced career changers.
But people get into these organizations and almost become invisible, as if we bring no value and that our experiences cannot help us connect with those who do not look like us — that people with money are only Caucasian.
Merrill Lynch and other firms wanted [some time ago] to work with regular clients but now only want millionaires and multimillionaires.