According to surveys submitted by firms and their staff as part of this year’s selection process, 53% of the Best Places have implemented programs to recruit and retain employees of varying ethnic and cultural backgrounds. Similarly, 48% had implemented formal diversity training.
That puts the group far ahead of its peers. Only 35% of financial advisories make a formal effort to boost diversity through hiring, according to a recent study of diversity in financial advice by the American College of Financial Services. The study, which was produced in partnership with InvestmentNews Research, found that only 30% of firms had implemented formal training programs.
While a minority of Best Places have formal diversity training in place, the American College study found such programs were viewed by advisers as the least effective diversity and inclusion policy. Just 32% of advisers overall, and only 21% of self-identified racial and ethnic minorities in the industry, viewed training programs as very effective in fostering diversity.
In contrast, policies that emphasized accountability and face-to-face cooperation were viewed as the most effective. To this end, 95% of the Best Places offer mentoring programs, which were viewed as the most effective diversity and inclusion policy by advisers and the only one with majority endorsement among participants in the diversity study. Three-quarters of the Best Places provide formal resources and support for employees who have been treated unfairly.
The winning firms were similarly taking concrete steps to address gender issues in the workplace. Most – 56% – conduct formal sexual harassment training, but 85% have clearly established procedures for reporting it.
On parental leave, a policy that disproportionately impacts women, the Best Places are far ahead of both the industry and the country at large. Eighty-four percent offer paid leave for the birth or adoption of a child, a benefit accessible to only 14% of civilian workers nationwide.
The financial advice industry has made only halting progress toward reflecting America’s diversity. Despite double-digit growth in Black and Hispanic planners with the CFP certification in recent years, they represent less than 5% of charter holders. According to the CFP Board, only 23% of its certified professionals are women.
But the scale of the industry’s problem shouldn’t discourage firm leaders from moving forward. The research shows that firms can help set the tone from the top, beginning with implementing the right policies to demonstrate the importance of diversity and encourage an inclusive environment.
Based on the data, the Best Places have taken some important steps.
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