Financial planning profession making great strides to develop diversity

Fostering diversity and inclusion can be likened to teaching. Both require a lot of hard work, passion, energy and training. And no matter how much teachers do in the classroom, they will always wonder what more they could have done or what they should have done differently. 

The exact impact of teachers is difficult to directly measure, and the work of a teacher can never truly be considered “done.” But teachers’ efforts are appreciated by those they serve, and their work also has an important influence on other current and future teachers. 

In that spirit, many financial planning professionals and firms are currently contemplating their craft and their approach and what adjustments or improvements they can undertake to have a more positive impact on diversity in their sphere of influence.

Here are a few efforts that have impressed and inspired me as I have watched the financial planning profession grow. While these companies are striving to make an impact, none of them would feel completely content or satisfied with what they have done. 

 Some examples of efforts moving our profession the right direction:

  • The CFP Board hired D.A. Abrams as the new director of its Center for Financial Planning and made one of his primary responsibilities fostering “a more diverse financial planner workforce that reflects the changing demographics in the United States.”
  • TD Ameritrade Institutional earmarked some of its national scholarships for diverse students.
  • TD Ameritrade Institutional ensured that historically black colleges and universities and Hispanic-serving institutions would receive some of its grants to support their financial planning degree programs.
  • Schwab created and sponsored high school Financial Planning Academies through the Schwab Foundation, including two in locations that serve a higher percentage of diverse students.
  • Pershing Advisor Solutions and JPMorgan co-sponsored an event to train and encourage more women to enter the financial planning profession.

Although my home state of Utah is not the most diverse state, attendance at our inaugural Financial Planning Academy at Utah Valley University, funded by the Schwab Foundation, included more than one-third of attendees from diverse backgrounds and more than half female. 

The Financial Planning Association and the National Association of Personal Financial Advisors have been working on diversity initiatives and scholarships for decades and have created learning circles and resources to connect and empower planners from a variety of backgrounds. 

Martin Seay, president of the FPA, said they are focusing on “leadership, education, community, and opportunity for those who are diverse or who serve diverse communities.”

Terrance Martin, assistant professor of financial planning at Utah Valley University, views the FPA as being at the forefront with its establishment of subgroups focused on women and race. He noted that the FPA’s 2019 retreat had a panel on racial diversity and client communication, as well as a number of other presentations. But he wants to see companies at all levels “be more intentional about earmarking scholarships and funding on a larger scale to universities that predominantly serve underrepresented groups.” 

While these efforts are admirable, there is still more that firms can do. Often the toughest internship or job to get is the first one. Firms need to be there to offer internships and entry-level jobs, and the essential training and skills developed there will help launch the futures and careers of the next generation of financial planning talent.

I believe teaching can have immeasurable impacts and influences in the lives of individuals. I also believe that collectively the financial planning profession can have an immeasurable and immediate impact by taking intentional steps in our own spheres of influence.

[More: Financial planning programs need champions]

Luke Dean is the CFP program director for the personal financial planning degree program at Utah Valley University.

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