How Firms Can Attract and Retain Diverse Advisors

By Bill Hampton

Many financial firms have long recognized the value of diversity in their advisor populations. A diverse advisor workforce can bring unique perspectives, experiences, and connections to clients, as well as better reflect the diversity of the communities in which they operate. However, attracting and retaining advisors from diverse backgrounds can be a challenge, particularly in a profession that has traditionally been dominated by White males.

In this article, I draw on my experience as a former diversity, equity, and inclusion (DEI) manager and equal employment opportunity investigator for the federal government, as well as my experience in financial services, to explore how financial firms can effectively recruit and retain advisors from diverse backgrounds and create a more inclusive and representative workforce.

Prioritize DEI as Core Value

First and foremost, financial firms must prioritize DEI as a core value. Don’t just pay lip service to the idea of diversity; make it a priority in all aspects of the business. This includes setting diversity targets, implementing diversity and inclusion training for all employees, and regularly reviewing and evaluating progress toward diversity goals. Financial firms that need help with implementing DEI should use the NAPFA DEI Toolkit and attend the NAPFA DEI Training Program. These NAPFA resources are ideal for firms looking to start their DEI journey. Firms should also consider hiring a DEI consultant to help with these efforts.

Part of making DEI a core value is creating a more inclusive and welcoming culture. This includes offering flexible work arrangements, providing resources for personal and professional development, and promoting a respectful and supportive work environment. These characteristics should already be part of your work culture, but take a hard look at whether they satisfy DEI principles.

Build from Within

When we speak about raising the diversity of a firm’s advisory team, most people think about recruitment and hiring of new staff members (more on that below). But it’s just as important to look within your firm right now. Look at your existing talent base to ensure that people you already know and trust are reaching their ultimate career goals. Are you giving them the support they need to move up the career ladder?

For these valued staff members, create sponsorship and mentorship programs; provide access to resources and support systems, such as diversity and inclusion groups and networking opportunities; offer training and development opportunities, such as leadership development programs and continuing education; and include financial assistance, such as covering the costs of licensing or certification exams or providing scholarships to conferences or other education.

Sponsorship also should involve actively advocating for the career advancement of diverse financial advisors. This may involve identifying opportunities for them to take on new challenges and responsibilities or supporting them in seeking out external development opportunities. Actively promote and showcase their achievements and successes. This can include highlighting their accomplishments in company communications and marketing materials, as well as providing opportunities for them to speak at financial planning events or serve on financial planning committees and boards.

Create Targeted Recruitment and Sponsorship Programs

At the same time, you are likely to need to reach outside your firm to build a diverse team to carry you forward for years and decades. Targeted recruitment and sponsorship programs should focus on identifying and supporting individuals from underrepresented groups, such as women, people of color, and LGBTQ+ individuals, as they navigate the often-difficult path to becoming financial advisors.

Outside your firm, this means aiming your recruitment at sources like the Association of African American Financial Advisors (AAAA), the CFP Board diversity summit, the BLX internship, and students at historically Black colleges and universities. NAPFA has developed its own DEI program and is collaborating with other organizations on additional activities.

The job doesn’t stop when you’ve found those candidates. Advisory firms need to implement fair and unbiased hiring and promotion practices. This includes conducting diversity and inclusion training for hiring managers and setting diversity targets for hiring and promotions. Additionally, financial firms can seek partnerships and collaborations with organizations that promote diversity and inclusion in financial services.

Diversity Helps Your Firm, Your Clients, and Your Profession!

Supporting diverse financial advisors helps to build a more diverse and inclusive profession. It can also lead to increased productivity and innovation within the organization. This brings a wealth of benefits to the firm and its clients.

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Bill Hampton is the CEO of Hampton Tax and Financial Services LLC, a DEI consultant, and a NAPFA member who serves on NAPFA’s DEI Steering Committee.

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