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Practice Management > Diversity and Inclusion

Clients Are Younger, More Diverse and Want an Advisor to Match

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What You Need to Know

  • As younger, more diverse clients reach out for financial advice, they’re searching for advisors with whom they can relate.
  • Existing advisors are less in tune with the priorities, values and goals of the younger generation.
  • Financial services firms must proactively adjust their recruiting practices to attract diverse candidates who can understand and meet the needs of incoming clients.

It’s not often people embrace sharing personal financial information, like their total debt or yearly income, with complete strangers. But that’s exactly what financial advisors are to their clients when they first meet — strangers.

Building upon an unfamiliar relationship, establishing trust and understanding between advisors and clients is crucial to the financial success of both parties. Advisors are unable to make truly educated decisions on behalf of their clients if they cannot break down the personal barriers we all hold.

Bonding over shared characteristics and backgrounds is a great way to build a foundation of trust. Especially as younger, more diverse clients reach out for financial advice, they’re searching for advisors with whom they can relate. There needs to be more of a focus on recruiting.

Currently, the financial advising industry doesn’t have enough diverse advisors to meet this demand, necessitating a shift in recruiting practices to provide the services historically marginalized communities need to bridge the wealth gap. At CUNA Brokerage Services Inc. (CBSI), we are seeking to turn the tide and help encourage a younger, more diverse financial advisor industry.

The Need for Change

The financial advising field lacks diversity. According to Data USA, almost 80% of advisors are white. Comparatively, only 61% of the American population is white. While women make up around 50% of the population, less than one in three advisors are women

The financial advising industry is also aging. According to the Certified Financial Planner Board of Standards, nearly half (46%) of financial advisors are over the age of 50; it is not surprising that advisors are retiring at unprecedented rates.

According to the Certified Financial Planner Board of Standards, there are more advisors over the age of 70 than there are under 30, and many are expected to retire in the next decade. The industry is facing a looming talent shortage, which will only compound the difficulty of finding advisors who can serve the incoming generation of savers. 

While existing advisors are equipped to serve a clientele of their peers, they’re less in tune with the priorities, values and goals of the younger generation. According to research from Magnify Money, 12% of Generation Z (ages 18 to 24), and 11% of millennials (ages 25 to 40) consider the race, ethnicity and gender of a financial advisor important, compared to 6% of Generation X (ages 41 to 55) and 4% of baby boomers (ages 56 to 75).

Unlike previous generations, Generation Z and millennials are more willing to talk about money. Increasing financial transparency further spurs interest in working with an advisor and demand for a diverse workforce of advisors will only grow as younger generations accumulate wealth. 

Today’s Wealth Gap

To understand why representation is an important factor when managing finances, consider the history of the industry. Less access to financial education, higher education programs and financial wellness tools like credit cards have put women and historically marginalized groups at a disadvantage in the past.

The effects of these obstacles persist today, creating a wealth gap displayed by lower rates of home ownership, higher student loan debt and inadequate retirement savings, according to an analysis from Morningstar.

Fortunately, many organizations are actively working to minimize the wealth gap, and at CUNA Mutual Group, we’ve created the Multicultural Center of Excellence to research how to best reach underserved consumers. Our ventures team has also established partnerships with fintech companies that are working to provide resources and build wealth in historically marginalized communities. 

The financial standing of Americans is starting to look much more equitable. Today, almost 60% of women in relationships have the primary responsibility for household finances, according to research from HerMoney and the Alliance for Lifetime Income.

As these obstacles are broken down for people seeking financial advisors, an advisor who has been similarly impacted can help to build trust and confidence in clients who are venturing into an industry that once excluded them. 

Steps to Take

To change the future of the industry, financial services firms must proactively adjust their recruiting practices to attract diverse candidates who can understand and meet the needs of incoming clients. To help build a diverse pipeline for promising new talent across the industry, CBSI has established relationships with Historically Black Colleges and Universities and Hispanic Serving Institutions and created a Multicultural Financial Services Internship program. 

To improve career experiences and retain talent for the long run, mentorship is another important resource, giving new financial professionals a trusted person to go to when seeking guidance on workplace concerns.

A study out of Cornell University found that participation in mentorship programs boosted promotions and retention rates for female employees and employees from historically marginalized communities, in addition to increasing representation at the management level.

CBSI supports these relationships with our Women of Distinction and Teaming apprenticeship program, which pairs newcomers with established financial professionals that share similar backgrounds and experiences, displaying the opportunity for a career with upward mobility. 

Decisive, actionable steps are necessary to make financial services accessible to all people, including both clients and advisors. Traditional markers of success, such as asset growth, are no longer an accurate measure of overall performance. Look beyond the monetary value that advisors provide clients and consider their overall experience.

As people from historically marginalized communities continue to overcome obstacles and seek out financial advice, the industry must do its part to build a network of diverse professionals who can give the personalized, understanding and comprehensive guidance they deserve.


Rob Comfort is president of CUNA Brokerage Services Inc. (CBSI) and leads their front office program consultancy service in collaboration with credit unions. He is responsible for ensuring the credit union mission is at the heart of member engagement, delivering additive support and proactive management guidance for program optimization. Comfort has more than 25 years of experience in leadership, client acquisition and retention, and organizational development within the financial services industry.

(Image: Adobe Stock)