“Insidious racism” and the apathy of financial services leadership are responsible for the industry’s “gaping hole” in financial advisor diversity, argues RIA Anna N’Jie-Konte, 32, in an interview with ThinkAdvisor. If this continues, the industry won’t advance to embrace advisors of color alongside its overwhelming white male FA majority.
What’s needed? A complete “overhaul” and “revamp” of hiring practices, plus a “rehabbing” of corporate culture, N’Jie-Konte contends.
She is a black advisor who worked at three wealth management firms before breaking away in frustration last year to open her own RIA, Dare to Dream Financial Planning, in Silver Spring, Maryland, close to Washington.
The responsibility rests with firms’ top management to make “a concerted effort” to seek out African Americans and other people of color to join them as advisors — not only hiring them but nurturing them.
The “old boys’ club” hiring approach — focused on older white male advisors and often, nepotism — must go, maintains N’Jie-Konte, who experienced and witnessed racial discrimination firsthand at RBC Wealth Management and AllianceBernstein.
At RBC, she was on a team of four in the firm’s D.C. office, where she was the only black advisor. At Alliance Bernstein — in a support role, her first job in the industry — not one black FA was employed in the firm’s midtown Manhattan headquarters, where she was located, she recalls.
Commenting on her employment at RBC, N’Jie-Konte’s branch director, Amy D. Sturtevant, senior vice president, told ThinkAdvisor that N’Jie-Konte never voiced “concerns” to her about “how she was treated or expressed that she felt she had a lack of opportunity.”
N’Jie-Konte’s practice is aimed at single millennial women of color in their 30s and 40s. She calls it “a pretty plentiful cohort” and one that is underserved.
In business only since last September, she has a dozen clients and manages assets of $5 million. Most clients are upper-middle-class individuals with six-figure incomes.
The certified financial planner earned an MBA in international finance and investment analysis from George Washington University, where she was president of the African Business Association, and a BA in comparative literature and economics from New York University.
Fluent in three languages, N’Jie-Konte grew up in New York City, the daughter of accountants employed by the New York State Department of Labor.
The FA’s father came to the U.S. from Africa. Her mother is from Puerto Rico. N’Jie-Konte identifies as Afro-Latin.
Before joining RBC in 2014, where she stayed for five years, she was with Chevy Chase Trust.
Now she is calling out the industry for its lack of diversity and the “assumptions” Caucasian management makes based on skin color that’s other than white.
It’s up to firms’ senior leadership and the boards of directors to institute policies to expand their racial diversity view and reach. Once black and brown advisors are hired, it is leadership’s responsibility, as well, to “make sure they’re welcomed and not discriminated against,” N’Jie-Konte maintains.
Unfortunately, the racial diversity programs some firms have put in place “don’t do anything,” she insists. What’s needed to achieve a diverse financial advisor work force is a total policy rebuild.
For its part, RBC says it strives to increase diversity and has invested in several diversity initiatives. As a result, there has been a 9% increase in employees of color between fall 2017 and fall 2019, according to Sturtevant.
These steps include hiring a diversity recruitment program manager; asking hiring managers to interview at least one diverse candidate for posted jobs; and raising the firm’s presence at and sponsorship of recruiting events for women, veterans, people of color and other minority populations.
ThinkAdvisor recently interviewed N’Jie-Konte, speaking by phone from Silver Spring. She “fell into” financial services while at her first job in 2009, part of which involved organizing events in Latin America. One was for the wealth management industry.
“A financial advisor sounded like something I’d like to do,” she recalls thinking. “I love to problem-solve, help people, and I’m very extroverted.” Now she’s helping to lead the charge to convince the financial services industry to drop its limiting, discriminatory practices.
Here are excerpts from our interview:
THINKADVISOR: Has the financial services industry failed black America?
ANNA N‘JIE-KONTE: Yes. I can attest to the veracity of that. The lack of diversity in both the staff and client base is abysmal. It’s the elephant in the room.
Is discrimination in hiring black financial advisors some “6 degrees” from the protests of the last two weeks over police brutality and systemic racism?
I think so. People typically think of racism as calling somebody a racist epithet. It’s not really that; it’s much more subtle. For financial advisors, it’s insidious and difficult to root out. It can happen on the hiring level when a firm says, “Maybe they’re not suited to this type of client-facing role” or “Do they have the right background?” or “Do they have the right pedigree?” or “Do they have the right network?” White people make assumptions about the person or treat them in a certain way based on their skin color. Everybody [white] is guilty of it, but they don’t realize they’re doing it.
Is that because the industry is so focused on the bottom line?
It’s not about the bottom line. It’s about apathy, a lack of effort to recruit [black advisors]. There’s a focus on recruiting advisors that have big, established books of business. That lends itself to hiring older white men who have been in the industry for 30 or so years. And you see a lot of hires of “my golf buddy’s grandkid.”
What’s wrong with those approaches?
If financial services keeps doing that, they’re only going to get the same type of people and will never move forward. The industry needs to be revamped. Doing business as an old boys’ club can’t continue if they want a diversified industry in any way, shape or form.
Does focus on the AUM model impede the advance of diversity?
Yes because it’s skewed toward larger portfolios, and that’s where leadership is pushing the firms. When I was at RBC, they didn’t want people advising anybody with less than a $1 million portfolio. I think the industry is moving toward the ultra-high net worth model.
What are the implications?
Advisors are swimming in a bigger pool and not focused on the smaller fish because they generally think there’s no money there. They want to go to the country club to find clients or to a chamber of commerce business event. That’s not where my clients are to be found.
On the job, are there personal affronts to blacks and other minorities?
A lot of issues that women have in financial services are compounded for black and brown advisors, such as racist jokes, or the clients treat you funny or some of the other advisors treat you funny. There needs to be a rehabbing of the corporate culture. If you’re black and walk into an office for an interview and see only older white men and not a single person like you, it’s really hard to envision staying there and thriving. It raises a red flag. You wonder what’s happening behind the curtain, so to speak.
What was your experience as a black advisor at RBC?
I can’t recall that I ever saw another black advisor there. It was a very rare occurrence to be in a room and not be the only black woman or the only person of color, period. On my team of four, one member was of Pakistani origin, but I was the only black and the only woman. I was certainly the only black in our whole office in downtown D.C., on Pennsylvania Avenue, right across the street from The White House. That was a daily reminder of all things terrible.
Were you conscious of being the only black person because of your own feelings or because of the firm’s attitude toward you?
Both. A lot of senior advisors really beat the drum about finding more diverse leadership. But corporate leadership in the financial services industry — maybe in all of corporate America — just thinks about hiring the most competent people. So they don’t necessarily see lack of diversity as a gaping hole. They don’t see that they’re perpetuating homogeneity in their work force.
When did you first realize that was an issue?
When I was at Alliance Bernstein, my first break. I wanted to figure out how I could be successful, so I went looking for a minority woman mentor. There was all of one black woman, a very helpful research analyst. But by and large, I found that the only minorities were administrative assistants or secretaries. It was very rare to see anybody of color, male or female, in a financial advisor role. I can think of only one, a Latino guy. I can’t recall ever seeing a black advisor there.
Why did you leave RBC to start your own RIA?
I finally got frustrated with being told to wait. I didn’t want to wait to earn more. I didn’t want to wait to advance more. I didn’t want to wait to blossom and grow. I knew that as long as I was there, I was on someone else’s time [table] and that I had to be OK with the ride. Beyond that, I wanted to structure my life better as a mom with two kids and having a career at the same time.
Did any of your clients go with you?
No. I started from scratch. Because I was working on a team, I didn’t want to leave on a bad note by taking a bunch of clients with me.
Who is it on to change the status quo and hire more black financial advisors?
It’s up to the firms themselves. The [objective] is twofold: getting people in the door, and once you find the talent and hire them, making sure they feel welcome and aren’t discriminated against. Senior leadership has to be behind that 100%; otherwise it won’t work. They have to make a more concerted effort to go out and find black advisors or potential advisors where they are.
So the boards of directors and senior leadership would be the ones to establish policies favorable to hiring racially diverse advisors?
Yes. Leadership needs to be involved pushing people in the field to do this work. You may get a few branch managers or complex directors that are focused on this now; but they’re really more worried about their bottom line, not necessarily the bigger picture.
You said the firms need to find potential FAs “where they are.” Where is that?
Black colleges and universities, such as Morehouse, Spelman and Howard, have really great business schools. Some even have financial planning programs. I’d like to see paid internship programs with [firms] and some of these schools. Many of them have career fairs. That would go a long way to at least bring the profession to these communities as a viable option.
For what jobs might the firms hire these advisors-to-be?
A lot of firms have associate financial advisor training programs. When they recruit junior people to do cold calling and grunt work, there’s absolutely no reason they can’t hire a black or Latino person to do it. They can make just as many cold calls and knock on as many doors as a white guy or white woman can.
Why would a black client prefer to have a black advisor rather than a white one?
Is there going to be trust between the white advisor and the client? Is the advisor going to understand the client’s money mindset? A lot of black and brown folks support their extended families. I’ve seen white advisors come down on clients for that, saying they’re supporting someone too much. But this is a nonnegotiable issue for these clients. So it’s hard for a black client to have a real candid conversation with a white advisor because the [FA] might come across as judging them. For example, if they have a sister with a drug problem, they may [generalize widespread drug problems among] black people. So it’s very important that a black client feels they’re in a safe place and can have these vulnerable conversations.
Do you think it’s a positive for black advisors that many older white FAs are retiring and leaving their books to other advisors at their firms?
Oftentimes it’s their son or daughter that inherits the practice. That’s what I saw during my time in the industry [at firms]. Black advisors don’t usually inherit those books because at RBC, for instance, they were so focused on a succession plan beforehand: Overwhelmingly the advisor chose whoever they’d been grooming or a family member. So black advisors don’t even have a chance to inherit the books and grow the business — if there are any black advisors at the firm.
Some firms have initiated diversity programs. How effective have these been?
I don’t think they do anything. The results speak for themselves. The CFP Board says that black and Latinos are only 4% of total CFP [certificants]. There has to be a substantive shift, a concerted effort, in the way the industry is approaching this because the way it is just isn’t working.
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