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5 steps to a more diverse staff
Kate Ashford, 08/21/2019
For many RIAs, the desire to hire more women and minorities is strong—they're just not quite sure how to make it happen.
Taking time to figure it out is worth the effort. Hiring diverse employees can add different and rich perspectives to your business and enable you to serve a more varied clientele. A diverse workforce also makes you more relevant as client demographics and needs change.
"Given the complexity of the world we live in and the significance of difference, and understanding who your customer is and looking at the market, if you really want to expand and build your business, you want to give diversity and inclusion consideration," says Audra Bohannon, a senior client partner for Korn Ferry.
If you're looking to branch out, here are some strategies that can help:
Shift your mindset
One of the first (and arguably most important) steps to adding diversity to your firm is changing the way you think about hiring. We are often more likely to hire people who look like us—even if we don't realize it at the time. It's human nature. You must be intentional about your goal: When you make it a priority, you'll find that opportunities present themselves to you.
"As you open up and begin to get curious, you will find all kinds of resources available to you, whether it's a client or it's an employee," Bohannon says. "How you interview, where you go to interview, how you talk to employment agencies—you start by really saying, 'I'm going to make a commitment to expand my market and my team to be more diverse and inclusive so I can serve more people better.'"
That means that at every opportunity, you should let people know that you're looking for a diverse slate and different perspectives—from the friends you ask for referrals to the places where you advertise. If you put that message out into the world, you'll find that the universe will start to deliver. "If you feel that a diverse environment and a culture of inclusion is important to you, then that's how you start moving through the world, that is the lens through which you see," Bohannon says. "The questions you ask, the people you engage, the systems you seek—they all come from that vantage point."
Take advantage of associations
Not sure where to go? Special groups generally have organizations to represent their interests. "If you are looking for ethnic diversity, there are so many associations and organizations that are associated with Hispanic, Asian and Black talent," Bohannon says. The National Black MBA Association, for example, offers a robust website with prospects' resumes.
Women in your field may be represented by groups such as the International Association of Women and the American Business Women's Association. If you don't find the candidates you're looking for, ask. "Associations are a good place to go for ethnically diverse talent, and they can also refer you to other organizations," Bohannon says.
Keep in mind that some search firms specialize in finding diverse candidates, so you can look for that as well. There are also diverse financial planning groups, such as the Association of African American Financial Advisors, as well as the Diversity and Inclusion committees and programs of the FPA and NAPFA.
Adjust your visuals
Telegraphing diversity is just as important as seeking it out. What does your web presence look like? How are you presenting your firm on social media? If you have any diversity in your ranks already, are they represented fairly online? (Hint: They should be.)
"I was talking to a firm the other day who said, 'We want to work with women,'" says Kate Healy, managing director of Generation Next at TD Ameritrade Institutional. "I pulled up their website and there were 10 pictures of men."
Maybe you're just getting started in your quest and you don't have lots of diverse photos to put on your site and on social media. If you don't yet have diversity at your firm, there are ways to signify that it's a priority. Supporting local organizations, such as your area Association of Latino Professionals for America (ALPFA) or Black Career Women's Network, can create a feeling that you're serious about widening your perspective. Mentoring diverse students at local schools is also needed.
The quest for diversity is, ultimately, tied to giving others opportunities that may have historically been unreachable to them. "The challenge for folks who are not yet diverse but want to be is, how do they show people they really believe in it?" Healy says. "Supporting organizations or local women's groups can go a long way to having people believe that you actually want to walk the walk." Advisors can fund scholarships for diverse financial planning students, or scholarships at HBCUs (Historically Black Colleges & Universities). "Five thousand dollars can make a big impact," Healy notes.
Expand your staff horizons
Often, people think only about the advisor role when they aim to be more inclusive. "They forget the fact that they've got an entire firm," Healy says. "There are a lot of opportunities to bring diversity in through any of those roles."
Once again, shifting your mindset is a good start. We already know that the financial planning profession isn't as diverse as it could be. So consider looking elsewhere when you're seeking to fill non-planner roles in marketing, operations or finance. Considering candidates from outside the industry can also provide an opportunity for diverse hires, Healy says.
If you have an opening for an entry-level advisor, that's another opportunity to consider looking outside the well of advisors that you know of—or even outside of financial planning programs at universities. Consider that 3% of rookie advisors (those with fewer than three years of experience in an advisory role) were psychology or sociology majors and 5% were communications majors, according to research from global research and consulting firm Cerulli Associates. Only 4% of these advisors today have a formal degree in financial planning. "We often tell folks to look for the people who want to help people," Healy says—a broad mandate.1
"People can learn financial planning," Healy says. Great potential advisors may currently be studying to become teachers or social workers. "You're looking for people who have that heart, who want to help people, who are good at relationships, and who are good at explaining difficult concepts to clients. That's going to broaden your horizon."
Mirror your clients' needs
As you're planning to enter new target markets, consider how you're planning to position yourself to show that group that you're schooled and aware of their common issues and hurdles.
"It's not wrong to hire someone to help you break into a market and to help you understand that market," Healy says. "What you want is the firm makeup, from an associate perspective, to reflect the makeup of the clientele you want to attract."
But diversifying your client base shouldn't be about going after certain racial or cultural markets because you have staff that looks like them. It means making sure you have diversity woven in to the expertise you provide and the needs you're set up to meet.
This goes not only for diversity of gender and ethnicity but also training and experience. If you're going to work with women who are going through a lifestyle transition, do you employ someone who's a Certified Divorce Financial Analyst (CDFA)? If you're targeting a group that's more likely to be raising children who will be first-generation college students in the U.S., are you prepared to offer detailed information on the way the U.S. university system works? If new grads are your target, can someone walk through all of the options for refinancing and consolidating student debt?
"You need to know and be able to help them with what's top of mind to them today," Healy says. "Make sure you have the expertise before you go out there and try to get the clients."
1 "The Cerulli Report - U.S. Advisor Metrics 2018: Reinventing the Client Experience," Ceruilli Associates, 2018. (For purchase: Found here.)
TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other's policies or services.
TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2019 TD Ameritrade.
Content provided is for educational purposes only and is not intended to be advice for any firm.
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