Contributed by: Sandra Adams, CFP®
February is Black History Month and we, at The Center, have been celebrating by sharing some of our favorite quotes from famous African American leaders. However, we thought it was also the perfect time to address the topic of diversity and the role it plays in our industry. Throughout our 30 years, we have paid special attention to the topic of diversity and what it means to our teams, committees, and ultimately to you – our clients.
Where do we stand on the topic of diversity in our industry?
Interest in personal financial advice has never been greater and as more Americans assume responsibility for managing their financial futures, there is increasing demand for financial advice. According to recent research conducted by CFP® Board, 40 percent of Americans now work with financial advisors, compared to 28 percent in 2010. The rising need for financial advice presents an opportunity for the financial planning profession to diversify its workforce to better match the population we serve. For example:
African Americans represent only 8.1 percent of financial advisors, yet comprise more than 13 percent of the U.S. population.
Hispanics represent only 7.1 percent of financial advisors, yet comprise more than 17 percent of the U.S. population.
Only 23 percent of CFP® professionals are women, even as women control more than a third of wealth in the U.S.
Why do we think it is important to have people with diverse backgrounds and experience working in teams at The Center on behalf of our clients?
Working in a committee or team structure is not something that comes natural to us as human beings. Working with a diverse group of people in a committee can be even more difficult, but is of utmost importance when making investment or financial decisions. However, a diverse committee is less likely to have a blind spot, will have a broader set of experiences to draw from and offers checks and balances. We believe building a committee of diverse individuals is one of the first and most important steps to successful outcomes.
At The Center we have recognized this importance when deciding who should sit on the investment committee. These members drive the decisions and diversity helps avoid groupthink. Groupthink happens when group pressures lead to a deterioration of mental efficiency, reality testing, and moral judgement. It’s rewarding to see change coming and equally as rewarding to be part of it.
The Center has also seen the value of diversity as it has developed other teams within the firm to work on behalf of clients, like the financial planning department, or the weekly meeting of the financial planners. Each of these diverse groups is made up of people coming from different backgrounds, possibly having slightly different educations, and various certifications or specialties. Because of this, we have the opportunity to bring different insights and perspectives to client cases that wouldn’t exist if we all came from the same background and had the same frame of thought – what an advantage for our clients!!
As you celebrate Black History Month along with us at The Center, know that diversity is important to how we do things and how we serve you each and every day.
Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.
The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete.