Financial Planning Has a Massive Diversity Problem, Survey Suggests
The diversity of the U.S. population is far greater than the makeup of the financial services industry, according to a recent survey by the CFP Board. Less than 3.5% of the 80,000 CFP-accredited professionals are black or Latinx, the survey found.
A more diverse advisor force is essential for serving the increasingly diverse U.S. population, Marilyn Mohrman-Gillis, executive director of the CFP Board Center for Financial Planning, says in a statement. Unfortunately, this may have a lot to do with current misconceptions, according to the survey of 2,276 U.S. adults, which included recruitment professionals at financial firms; white, black and Latinx CFP-designated professionals; investors working with a financial planner with investable assets or income of at least $100,000; and black and Latinx business professionals and students age 20 to 54 open to a financial planning career. Only 78% of those polled see no difference in the required skill sets between whites and blacks, and just 69% see no difference between whites and Latinx, the CFP Board found.
And 58% of black and Latinx prospective financial planners haven’t even seriously considered pursuing a financial planning career, according to the survey. That’s despite the fact that the majority of black and Latinx CFP-designated professionals are very satisfied with what they do. Among black CFP professionals, 68% are “very likely” to recommend the profession to others, while 59% of Latinx CFP professionals are very likely to recommend it, the CFP Board found.
To change the status quo and attract more blacks and Latinx to the financial planning industry, 54% of respondents believe that exposure through financial literacy programs is necessary while 51% believe there’s a need for increased awareness about the profession as a possible career path, according to the survey. Fifty-six percent believe there’s a need for more mentoring programs and 34% think that more diversity hiring programs are necessary, the CFP Board found.