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Marguerita Cheng: To Boost Advisor Diversity, Look Beyond Recruiting

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There is no shortage of serious talk about the need to boost financial advisor diversity at firms. Now meet an FA who’s clearly an expert on diversity: Marguerita “Rita” Cheng, a multiracial, multicultural financial planner whose advisory practice draws clients from an array of cultures and wide-ranging experiences. 

“I think about diversity in terms of not just race, gender and ethnicity but also religion, life experience and diversity of thought,” the founder of Blue Ocean Global Wealth tells ThinkAdvisor in an interview.

Cheng’s father was born in China, and her mother is a Poughkeepsie, New York, native of Irish and Eastern European descent. Rita has twice lived in Japan, the second time working in Tokyo’s Wall Street district (Kabutocho) while attending Keio University on scholarship.

Her college degrees are diverse: A B.S. in finance and a B.A. in East Asian language and literature (Japanese), both from the University of Maryland.

She started out as an FA at Ameriprise when it was American Express Financial Advisors. After 14 years there, she launched her own advisory in Gaithersburg, Maryland, in 2013.

Her advice to the financial services industry on how to increase advisor diversity? Focus “not just on recruitment but also retention,” she stresses.

In the interview, the Eurasian CFP, 54, born in Poughkeepsie, maintains that financial planning is so crucial, it “transforms lives.” A requirement for all her clients is that she create a financial plan for them.

In addition to wealth management, Cheng’s firm also provides FA continuing education credit and educational programs tailored to consumers.

A columnist for Kiplinger, MarketWatch and U.S. News & World Report, Cheng has a flair for what engages folks marketing-wise: Her weekly women’s podcast, also available as a webinar, publishes on Friday evenings and is dubbed “Margaritas With Marguerita”: Bring drinks and learn about personal finance.

Co-author of “Wealth Management Rules: 12 Tips to Help You Harness Your Financial Know-How” (Inkandescent, 2014), Cheng is a member of the CNBC Financial Advisor Council and has been a CFP board ambassador for nine years. She is also a member of the board’s Diversity Advisory Group.

ThinkAdvisor recently interviewed the advisor by phone. About her diverse clientele, she notes: “I’m reaching people who weren’t being served. They were overlooked. A lot of people who come to me say they hired me because my story connected with them.”

Here are highlights of our interview:

THINKADVISOR: In what way does your firm embrace global diversity?

MARGUERITA CHENG: I think about diversity in terms of not just race, gender and ethnicity but also religion, life experience and diversity of thought.

Tell me about your own diverse background.

I’m Eurasian: My dad was born in China; my mom, who was born in Poughkeepsie, New York, is of Irish and Eastern European heritage. That makes me multiracial and multicultural. I was born in Poughkeepsie, and I lived in different places with my family, including Japan, the Netherlands and Texas. Later, I lived in Japan [on my own].

What makes your clientele particularly diverse?

It’s about how they think. I celebrate the diverse experiences that my clients have had. I’m sensitive to working with people whose stories — global experiences — are very similar to mine. Also, many are from blended families. Maybe they have extended families, like having a grandma or grandpa they need to account for when we’re creating a financial plan.

When you lived in Japan the second time, you worked in Tokyo Wall Street, Tokyo’s financial district. Please discuss.

I won a scholarship from the Japanese Ministry of International Trade & Industry to study in Japan. You’re allowed to work in your field [of study]. So while there, I had a job with Towa Securities, a Japanese investment bank: I was an editor of a newsletter for English-speaking investors and a junior analyst.

When you returned to the U.S., what was next on your agenda?

I wanted to earn a business degree, so I needed a part-time job. I was hired by Nordstrom as a part-time salesgirl. I was there for seven years and worked my way up the corporate ladder to manager. The next step for me was buyer.

But you left that opportunity to become a financial planner. You and your husband had a toddler daughter and an infant son at the time. What was behind your decision to leave?

I didn’t feel fulfilled. But let’s be real: It’s not easy to break into this profession, especially if you’re a woman, a woman of color, a young mom.

But I thought about how many people there were like me, and I believed that they, and others, needed quality financial planners. I wanted to help people. I wanted to make a difference. 

Did you get much encouragement when you made this decision?

Some doubted me: Why would I give up my secure job? I had to believe in myself even when those around me didn’t.

What made you think you had abilities to be a good financial planner?

I helped my husband, who’s an auditor, transition to a new career. I was earning more than he was and had a more secure income. I helped him prepare for the CPA exam, and then I helped him secure a full-time position.

I helped pay down student debt and credit card debt, buy a house — and at the same time, I had two babies.

How hard was it to be a mother of two little ones while becoming a financial planner?

Very hard. For about six or seven weeks, at the beginning of 1999, I studied for and passed the Series 7, 63 and 65 exams, and the Life and Health insurance exam. I didn’t see a lot of role models that looked like me, and I didn’t have friends and family to call upon [as mentors].

But I was determined. When I started at American Express Financial Advisors [now Ameriprise]. I cold-called. I’m very good with people. 

You were there 14 years. What motivated you to form your own firm?

I wanted to be in control of my destiny. As a finance major, I wanted to take the corporate finance concepts I learned — strong balance sheet, statement of cash flows [etc.] — and use them to help individuals and families. I knew it was going to be hard to build my business, but I’m very disciplined and focused.

Why do you put great emphasis on financial planning?

I really believe that financial planning transforms lives. For my clients, it’s financial planning first. That way, I can really get to know them — what’s important to them: their priorities and philosophy.

When I opened my firm, I felt that clients wanted advice about issues in addition to their portfolio, such as Social Security, student loans, refinancing their home. I felt it was important to focus on all areas of their financial life and have a business model where it wasn’t just AUM.

I assume, then, that you build a financial plan for every client, right?

Yes. It’s a requirement. I won’t invest my clients’ money unless we do financial planning. I won’t accept any money under management. A lot of RIAs and financial advisors who are [compensated according to] AUM will talk to you only if you have, say, half a million dollars or $3 million. I don’t have a minimum. 

Where and when does investing enter the picture?

The last piece is the portfolio. I don’t want to diminish the importance of having investments, but I’ve always felt it was better to start with planning because then you’re being more client-centric as opposed to product [-centric].

What can the industry do to encourage more women to become FAs?

Once you’re committed to bringing women into the profession, you need to find a way to support them so they don’t just survive but thrive. It’s really important to recognize the strengths that women have.

And maybe the industry should look at compensation structures to see if they’re really encouraging teamwork and not fostering a culture of cutthroat competition. This isn’t a marathon; it’s a relay race — we’re doing it together.

How should firms go about increasing financial advisor diversity?

It’s important for leaders in the financial advice profession to be mindful of the experiences of people of color or those with diverse backgrounds in terms of race, culture and ethnicity. The profession needs to focus not just on recruitment but also retention.

What do you like best about being a financial planner?

I love that the work is intellectually stimulating — it’s never boring — and that it’s emotionally gratifying. I feel I have a fulfilled life.

— More by Jane Wollman Rusoff on ThinkAdvisor: