The financial planning industry reaches out to a more diverse field
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The CFP Board, the US-based body responsible for administering the Certified Financial Planner certification program worldwide, has launched a campaign to increase representation from “millennials, women, and people of colour” in the financial planning industry.
Citing CFP Board Chairman Blaine Aikin, Financial Advisor IQ has reported that only 23% of certified financial planners (CFPs) are women, and people of colour are “significantly [fewer] than that.” Age-wise, there are more CFPs who are over 70 years old than CFPs under 30, and more than 20% of CFPs are retiring.
To address this problem, the CFP Board launched its I Am a CFP Pro earlier this month. As part of this program, the board has put up a dedicated website sharing stories of advisors from the three identified minority groups.
“As human beings, we are looking for connections,” said PNC Wealth Management’s Justin Sullivan, who represents millennials and people of colour. “I believe clients want to work with people they can connect with.”
That connection can be important, especially when it comes to understanding clients’ concerns. “Women always asked me at the end of a [financial planning] meeting, ‘Am I going to be OK?’” said Castro, a young woman of colour who is the founder and CEO of Financially Wise Women. “They didn’t care about beta or standard deviation.”
Dalal Salomon — the female co-founder and CEO at Virginia-based Salomon & Ludwin, which boasts US$797 in assets under management — has a different approach to female sensitivity. At her firm, advisors are salaried and take a share in the firm’s profits, which she believes helps attract female talent.
“The commission-only based foundation is very difficult for women. A lot of women are raising children and have a lot of other obligations, and that’s a lot to put on their plate,” she told the publication. “We all work with our clients as a group, and that is very conducive to hiring women.”
Female financial planners may not have too many seats at the table right now, but one veteran thinks the industry has come a long way.
“[I]n the 1980s, women were just coming into the workforce,” said Deborah Stavis, whose firm Stavis & Cohen Financial handles some US$450 million in assets. At the time, she said, incentives tended to cater to men – she once won a hunting trip in recognition of her excellent performance — and being pregnant was a “career-killer” in most people’s minds.
Stavis believes financial planning courses in universities have helped attract talent from different backgrounds. Castro also stressed the importance of universities, encouraging firms to visit campuses and let students know that “this is a real profession, and one in which young people of diverse backgrounds can succeed.”
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