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CFP Board's diversity summit aims to follow calls-to-action with accountability

WASHINGTON — When she was asked to speak at the CFP Board's second annual Diversity Summit, advisor Lauryn Williams wasn't interested.

"I did not want to do this speech," she told attendees from the conference stage. A track and field athlete and bobsledder, Williams was the first American woman to win medals in both the summer and winter Olympic Games. "I do not like to focus on all the ways that women and people of color have been held back," the founder of RIA Worth Winning said.

Ultimately, Williams said she decided to participate because she felt she needed to. "If I'm honest, I'm long overdue to take on the feelings that overtake me whenever anyone talks about diversity. Internally, there's a constant conversation being had about the responsibilities I have because of my gender and my race," she said.

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"I am just part of the solution. Myself and other minorities are not meant to carry this burden of diversifying the industry alone."

Following a provocative inaugural event last year, the program was tailored in part to help the near 370 attendees from across the country form and articulate a business case for diversity and inclusion to bring back to naysayers and skeptics. The panels and speeches echoed a common theme: The lack of diversity is a problem for everyone in the industry.

Williams' testimony was one of several shared during the summit that underlined just how much more work there is left to be done. CFP Board CEO Kevin Keller opened the day's events by asking attendees to focus on the year's theme of accountability.

"Not everyone places a high priority on diversity and inclusion," Keller says, citing the low numbers of women, blacks and Latinos in financial planning. Just 23% of CFP professionals are women. Only 3.5% are black and Latino.

At the event, the board's Center for Financial Planning released a research report outlining data that backed concrete business reasons why diversity should be a priority for all advisory businesses.

An Intel and Dalberg Global Development Advisors study cited in the report used "advanced analyses to calculate the statistical relationship between greater representation" of racial minorities and revenue and profit margin in the technology sector. The study found that for each percentage point increase in diversity, firms saw a 3 percentage point increase in revenue and a .35 percentage point increase in operating margin.

EBIT is 1.1% higher at companies with 10% higher gender and ethnic/racial diversity on their management teams and boards than it is at their counterparts with less diversity in the top ranks, according to McKinsey data outlined in the center's report.

People need to recognize that the complexion and gender of wealth in this country is evolving, said Craig Young, a market executive at Merrill Lynch Wealth Management. Young urged firms to use the CFP Board report findings to make an argument for more effective diversity initiatives. "There's no question with the power in the room here, if we use the research we can make a difference."

Panelists emphasized the need for more than just top level prioritization. "The support at the top is tablestakes," Ileana Musa, co-head of international wealth management for Morgan Stanley, told attendees "At the end of the day, where the magic happens is at the local marketplace."

Identifying champions who can push forward diversity and inclusion initiatives at all levels is critical, said Samuel Palmer, managing director with JPMorgan Chase. "For us, D&I is not an initiative that we're driving but a business priority."

What does that look like in action? Palmer said there have been instances at the bank where managers have claimed they're unable to fill a role with a diverse candidate. "We've sent people back and said 'That's okay, we're not going to fill the role for another two weeks. Let's make sure we have a diverse slate of people to choose from."

To build more diverse slates of prospective talent, it’s necessary to recognize that experience isn't everything, said Kim Jenson, COO of Raymond James' private client group. "Diverse [candidates] are not always going to have experience,” she said. "Until we can get a little bit courageous about getting people in those roles that haven't been in them before, it's not going to change. It's going to be same-old, same-old."

In her speech, Williams went on to share her experiences entering the wealth management industry following her impressive athletic career. She became a CFP partly because she could not find the financial help she needed.

"I'm a girl who joined the industry after receiving poor services from not one but two non-CFP financial advisors," Williams said.

Ultimately, entering the industry was a confusing experience for Williams — not because she was unprepared (she has a finance degree and MBA), but because she wasn't expecting her racial and gender identity to come to play the role it has. While equity and inclusion are still an issue in sports, she said, it isn't the same.

"My personal experience is that I haven't been held back because I'm a minority. It's perplexing to me that I'm an anomaly in professional services. In 2019, we should be tackling a more complex set of issues — as opposed to diversity and inclusion being in its infancy."

The key to affecting real change in the industry is understanding that people are multifaceted, Williams said.

"People are not one-dimensional. Solutions should not be one-dimensional," Williams said.

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