“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?