The Significance of Diversity in Financial Services
There is certainly a business case for diversity and inclusion – and it has helped those advocating for cultural change in the financial services industry. Today, companies face unprecedented challenges due to the global pandemic and issues around social injustice. It is imperative now, more than ever before, to have diverse representation and inclusive practices.
Wes Thompson, President and CEO of M Financial Group, has made diversity a business priority. In fact, one of the goals of the Magnet Program for financial professionals is to develop the next generation of diverse leaders in financial services.
At Nationwide Retirement Institute, Kristi Rodriguez, Senior Vice President, leads the teams responsible for advocating for and educating members, partners, and industry leaders on issues impacting their ability to have a secure financial future. Analyzing data is an integral part of Kristi’s role. We know there is power in data, and research shows that financial organizations need to address systemic issues for diverse talent to rise. This starts with how and where companies recruit—and how they engage college students.
RISE is an acronym for recruit, invest, sustain, and evolve. Two years ago, Nationwide partnered with The American College of Financial Services to investigate why there was a lack of African Americans going into the financial services industry and becoming financial professionals, primarily advisors. The RISE research analyzed these issues from a recruitment standpoint within undergrad students and then also looked at professionals.
“We show that both in the recruiting from undergrads and the professionals, 41% of the African American advisors stated that they lacked mentorship opportunities, 33% thought it was discrimination on the part of consumers, and 90% of all participants thought that they’d face greater hurdles to overcome than their counterparts. That led to us launching the Financial Alliance for Racial Equity (FARE),” Kristi said.
“When it comes to these issues, we know that inherently some are systemic. However, if we partner together as an industry, we can solve for individuals believing that there’s a pipeline situation,” she continued. “We can also solve for creating greater resources to ensure that these African American financial professionals stay in the industry and can build a market and a clientele for themselves and inversely create opportunities to build wealth within their communities.”
Recruiting Diverse Talent
Nationwide’s ongoing efforts speak to the commitment to diversity and inclusion in the financial services sector, but progress remains slow. The landscape has drastically changed, and the industry is playing catch-up. Kristi offered three main prescriptions for accelerating change:
• Bringing people of all backgrounds to the table
• Representation of diverse people in financial services at colleges and universities
• Tangible resources within firms
“Diversity and inclusion, to me, is a synchronized marriage—and in any industry, but particularly in financial services, it’s paramount. To be innovative and engage not only new clients but also in the way we operate and do business for generations to come. It is also a business imperative to have not just diverse thoughts around the table but also backgrounds, ethnicity, gender, and points of view,” Kristi continued.
“In our industry, which is predominantly an older industry and is somewhat homogeneous in terms of older white males, when you think about the landscape and decision-makers, we have to bring diverse thought to get different perspectives to engage and create generational wealth for years to come. I would also underscore that diversity and inclusion drive performance.”
The Magnet Program
Kristi acknowledges that the issue isn’t just recruitment, it’s also sustainability and retention. She points to the Magnet Program as being a solution.
“The Magnet Program is phenomenal for a lot of reasons. Nationwide believed early on in the program and was a gold sponsor, because we knew what could be accomplished by creating a program that would evolve over two years for individuals who generally may not have been attracted to the industry,” she continued.
“This is a sound program that is going to create mentorship, resources, and industry partners to ensure their success in this business, all of which were outlined in the RISE research as being a critical aspect of success and sustainability.”
According to Kristi, when it comes to the social unrest in our country, she looks at financial wealth and financial well-being.
“To some extent, it gives a level of freedom. When I look back to my younger self, I use this analogy that I often say to my two young daughters. ‘The best math that you can learn is calculating the future costs of your current decisions.'"
When it comes to entering the financial services industry, Kristi believes this is the right time, no matter where you are.
“Young people need to know that they can create a legacy that goes far beyond just passing things down that are material. It’s also passing down what you think about financial services, wealth building, and community. That's where I feel I can urge any young individual that this is a noble position. I view our industry in the same vein as the medical profession: we can help people live a better life. As a result of your understanding of basic financial concepts, you can change that trajectory for not only yourself but for your family and generations.”
*Nationwide and M Financial are separate and non-affiliated companies.