As someone who self identifies as a white female, talking about diversity, equity and inclusion (DEI) is a privilege that I don’t take for granted. I feel like I started life on second base. Why do I think that? I’ve never been questioned in a job interview about whether I could read or write English. I’ve never been doubted based on an accent, the color of my skin or the hair on my head. In short, my struggles or life adversities are not a result of my race, religion, sexual orientation or nationality.
The complexities related to diversity issues were discussed thoughtfully during a session titled, “DE&I: Solving This Industry Imperative,” at the 2021 MarketCounsel Summit in December. This presentation provided three major takeaways detailed below regarding how registered investment advisers can be better stewards of diversity, equity and inclusion initiatives.
Diversity isn’t the opposite of nondiversity
Companies that have completely Caucasian staffs shouldn’t be considered homogeneous, because every person is different. But the value of more diverse teams is in the increased diversity of opinions and perspectives. This can be presented in various ways across genders, races, nationalities, socioeconomic backgrounds, and other unseen characteristics and experiences.
Roughly 1 in 10 married millennials has a spouse from a different racial or ethnic background, according to the Pew Research Center. This percentage continues to grow over time, portending that the future of wealth will be more diverse than ever and the RIA industry needs to adapt in order to attract clients in the coming years. Hiring a person of color would check the diversity box but not the complete “DEI” box.
Addressing the “E” and “I” of “DEI”
I have been applauded for learning and speaking Spanish to open myself up to advanced professional opportunities. Alternately, my husband’s family that immigrated to the U.S. from Cuba when they were young and received advanced education here has had to face discrimination related to speaking with a heavy accent. This illustrates the meaning of equity and inclusion. There’s no reason to doubt someone who speaks or looks differently than ourselves, but unconscious biases can get in the way.
When looking at RIAs, the focus is normally on success and hiring the best talent to achieve it. This means that while there might not be room for extensive talent diversity when you only have a 10-15 person team, leaders can focus on creating opportunities for training, exposure, community investment and development. Black and Hispanic wealth is rapidly growing and if the RIA model isn’t nimble enough to attract diverse clients, the industry is poised to fall behind.
Focus on development
If your firm wants to pursue diversifying its talent, the best place to start is within, by seeing which members of your team can be developed. In many cases, minorities and even women start in lower roles and are overlooked for development opportunities. With a focus on bringing in diverse entry-level staff, as well as providing mentorship and growth opportunities, more diverse voices will have seats at the table.
The MarketCounsel panel wrapped up with the idea that there is no right or wrong when it comes to pursuing DEI initiatives. The first step is acknowledging that there is likely room for improvement. Firms can then strive toward implementing plans to move the needle in ways that complement their business goals.