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July 8, 2020, 12:19 p.m. EDT

Three reasons you don’t see many people of color in the financial services industry — and how to fix it

Just 6.9% of personal financial advisers are black — 82.2% are white

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By Alessandra Malito, MarketWatch


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Just 6.9% of personal financial advisers are black—82.2% are white.

In his college finance classes and later on as a professional at conferences, it was not uncommon for Chris Browning to be one of only a few people of color in the entire room — if that many.

“There was definitely a lack of diversity,” he said. “In similar positions, there were not a lot of people who looked like me.”

Browning, who is now a financial analyst as well as the creator and host of the Popcorn Finance podcast, found an interest in finance while in college. He was drawn to personal finance subjects because he felt he could share what he learned with others to help them prosper.

And that he has. Although he only views himself as someone helping people gain financial knowledge, Browning says he now appreciates his role as one of the diverse voices in media talking about money.

“I have a new level of respect for the platform I’ve been given, knowing there are impacts of the words I say,” he said.

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The Black Lives Matter protests are encouraging more people to listen to the voices of people of color. “Historically, black Americans in this country have not always had the opportunity to see and have access to wider, broader audiences,” he said. “These are valid voices. These are people who are intelligent and can add more.”

Companies across the United States are having conversations about racial injustices in the workforce, too. Specifically the lack of diversity in some cases, which is an industry-wide problem in personal finance.

See: This early retiree has a unique glimpse into the COVID-19 pandemic — and her side hustle helps people sidestep financial ruin

The financial services industry, particularly in jobs that work directly with individuals, is mostly white, data from the Bureau of Labor Statistics show . Of the 551,000 personal financial advisers in 2019, 82.2% were white, 8.6% were Asian, 6.9% were black and 6.3% were Hispanic. Of the nearly 2 million accountants and auditors, 77.1% were white, 12% Asian, 8.9% Hispanic and 8.5% black. A majority of the 97,000 tax preparers in the country — 77.5% — are white, followed by 16.6% black, 15.2% Hispanic and 5.6% Asian.

Numerous barriers keep candidates of different backgrounds outside of the industry, experts said. It starts young, when people are choosing their career paths in high school and college, but there are also challenges in hiring, retaining and promoting people of color.

“Our profession is not particularly diverse, and it is actually quite grim,” said Evelyn Zohlen, president of Inspired Financial and chair of the Financial Planning Association. Zohlen is speaking specifically to Certified Financial Planners, one of the better-known credentials in the financial planning business. Less than 5% of CFPs are black, and the same is true for Latinos, Zohlen said.

Having a more diverse, and inclusive, industry benefits everyone — the company, the employee and the clients, said Rumbi Petrozzello, principal of financial forensics and litigation firm Rock Forensics and president-elect of the New York State Society of CPAs. On the company level, having more diversity allows firms to speak with and help more individuals with different backgrounds and needs. Employees see a diverse workplace as somewhere they can be comfortable and grow, while clients feel they’re being understood. “At least in perception, it looks like a company that values everyone is therefore going to value me, prioritize what I want, listen to me and hear what I want before giving advice,” she said.

Although clients can find financial advisers who are a right fit for them regardless their race or gender — and vice versa — some people may feel more comfortable with a professional who has a similar background, said Christian Nwasike, principal and managing partner of Practice Management Consultants , a coaching firm in the financial services industry.

“We owe it to ourselves to get more people of color in chairs to be able to assist these diverse clients with their retirement needs,” he said. Money is a very personal, sometimes taboo, topic, so it helps when clients feel an adviser understands where they’re coming from or has had similar experiences. It’s why firms benefit from having advisers in a range of ages, as younger advisers may not understand unique retirement concerns and it may have been decades since an older adviser had to deal with the day-to-day finances of caring for an infant.

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