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Committing to a More Equitable and Inclusive Financial Planning Future

By Kevin R. Keller, CAE February 11, 2022 LinkedIn

It is an unfortunate reality that an individual’s race or ethnicity may create barriers to their professional success.

Those barriers may be at points of entry into a profession. A young person may not be exposed to careers that are less common in their community, or they may be discouraged from pursuing a particular path if they don’t see professionals who look like them in their dream job.

But they can also arise during the course of an individual’s career.

When we convened the CFP Board Center for Financial Planning’s fourth annual Diversity Summit, we heard from several CFP® professionals about the unique challenges they faced as individuals of color in the financial planning profession. Marcus Malonson, CFP®, spoke of an early point in his career when he first became responsible for growing a book of business. He shared how he struggled to attract new clients, while a white colleague of similar position and experience opened many more accounts. He hesitated to put his picture on marketing materials and would bring a white colleague along on business meetings to help put white clients at ease. Marcus had to find ways of overcoming prospective clients’ inclination to use his race as a factor in their decision to work with him. Today he is a senior vice president and wealth management advisor at Merrill Lynch Wealth Management.

We also heard from Reshell Smith, CFP®, the founder and president of AMES Financial Solutions, LLC. Like many new advisors, Reshell worked in a financial firm’s call center when she first started in our profession. One challenge she identified was the small number of Black teammates and Black managers during her tenure. She also described being inappropriately labeled as “defensive” by a senior team member and receiving feedback in employee reviews that was based on her perceived personality rather than her work quality.

Through its Center for Financial Planning, CFP Board has engaged in a profession-wide effort to address these and other systemic challenges. We seek to build more diverse, equitable and inclusive workplaces in which all professionals are supported, and which better reflect — and serve — an increasingly diverse public.

The need for improved workforce diversity is great, and a more diverse workforce will open up great opportunities. Today, only 7.3% of all financial advisors are Black, compared to more than 13% of the U.S. population. This gap is likely to increase as the U.S. moves toward a population where people of color are the majority. At the same time, the median earnings and purchasing power of Black households continues to rise. This represents a huge area of growing wealth that will need the services of CFP® professionals.

I am proud to say that CFP Board has consistently increased the number of Black CFP® professionals over the last several years — recording more than 10% growth in this segment in 2021 alone. But we have much more work to do.

As we honor Black History Month, we also reaffirm our commitment to advancing racial and ethnic diversity in financial planning. This month, we will announce 3 new scholarship programs and begin accepting applications for 2 others that specifically support individuals from underrepresented populations who seek to become CFP® professionals.

We have also started planning our fifth annual Diversity Summit, scheduled to take place this fall. These annual summits bring together firms, academic institutions, partner organizations and CFP® professionals in a collective effort to identify best practices and proven strategies for creating a more diverse profession. They provide a platform for sharing new research on successful, scalable and sustainable diversity and inclusion initiatives that can be replicated across financial firms, as well.

As we continue this journey toward a more equitable and inclusive future, we are particularly thankful for the dedication of the Center’s Diversity Advisory Group (DAG), led by the National Urban League’s Cy Richardson, which assists in the development of innovative diversity and inclusion initiatives. We are also supported by our new Board Chair, Kamila Elliott, CFP®, who has challenged us to take bold action to grow a financial planning profession that meets the needs of diverse consumers.

I invite you to join us in advancing the Center’s mission of creating a more diverse and sustainable financial planning profession. Not just this month, when diversity may be more prevalent in our thoughts and conversations, but every day.

It is up to all of us to affect the change we seek in the financial planning profession.

This article was originally published on LinkedIn on February 11, 2022.

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About the Author: Kevin Keller, CAE is Chief Executive Officer of CFP Board. CFP Board’s mission is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning.