“The first is that color and cultural upbringing of financial advisors in America do not match the actual demographics of the communities that we serve. And sociologically, this is all part of the circle of events that make it so difficult for underrepresented families to obtain empathetic, accurate financial advice and money management from certified planners.”
The second big disconnect, Hill said, is that not many financial advisors are talking about social or racial inequality regarding their firms and their clients. And even if they are, they are doing so internally and not publicly, he said.
Hill said one of the fears within firms is that their work within the context of diversity and inclusion will be seen as a marketing ploy to bring in more clients. They also fear client attrition. “We feel that if we take a stance in these conversations, our clients will leave us and, wow, what a powerful statement that would be if they did,” he said.
But Hill, a millennial, pointed out that many of his younger clients want their advisors to have a stance on topics they deem important. “And this might be the most important topic we come across as advisors,” he said.
Hill said advisors are reluctant to engage in a discussion on social justice because of a fear of accountability and commitment. “You start the conversation and begin to take action. You can't just walk away from it in six months because your commitments are now public,” he said.
As a show of commitment, Hill said Ambient has begun to set aside an unspecified percentage of revenue for the Association of African American Financial Advisors and the Association of Latino Professionals for America, two groups that help professionals find careers in the finance industry while also providing education and career paths for the next generation.
In addition, Hill said the firm is looking to hire additional staff that reflects its client community. They also are exploring how they can provide a financial literacy program for lower-income, underserved students and families in the local community.
Hill’s message to advisors is to get in the conversation. “The topic of diversity and inclusion is in the forefront of peoples’ minds right now,” he said. On getting started, he said, advisors need to first have a personal conversation. “The conversation has to begin personally. If you are not authentically motivated to press into these conversations, people will see right through you,” he said.
“Have a meeting that includes every person on your staff. Not everyone has to agree, but ensure that voices are not just tolerated, but actually heard, and then together, decide on a plan of action, including how your team will manage responses if you do decide to make something public,” Hill added.