Improving diversity, equity and inclusion in the financial services industry is not only a moral imperative but also a business imperative due to changing wealth demographics, according to company executives.

“The composition of wealth in this country is changing. That momentum is strong and fast, and it is not turning around. It’s incumbent on all of us to ensure that we don’t get left behind by our clients, who they are and what they need,” Kirstin Hill, chief operating officer at Merrill Lynch Wealth Management, said Wednesday at the Securities Industry and Financial Markets Association’s Diversity, Equity and Inclusion Leadership Summit.

Hill went on to say that the commitment to diversity, equity and inclusion must come from leadership.

“It has to start at the top of the organization in terms of making it a priority. At Bank of America and Merrill Lynch, that is definitely the case, and a key part of that is the commitment in terms of time, in terms of focus from a management team and in terms of representation on a management team,” she said.

Back in 2018, Merrill Lynch Wealth Management president Andy Sieg was already making the case that diversity was a “commercial imperative” for the financial advisory industry. At that time, Sieg said “a modern Merrill Lynch is a Merrill Lynch where Latinos, African Americans, the LGBT community and females in advisory roles and leadership roles feel absolutely welcome and comfortable as part of the thundering herd.”

At this week’s conference, Hill discussed several DEI-oriented initiatives that BofA and Merrill have implemented, including representation in performance metrics.

“We have representation metrics sitting alongside business metrics like household acquisition in terms of how we measure our managers and measure our success,” she said.

Merrill has also become more transparent about the diversity of its financial advisors. The firm released statistics on the composition of its minority financial advisors in August 2020. Among Merrill Lynch Wealth Management’s roughly 17,500 FAs, 4.5% are Black, 9% are Latino and 21% are women, as of August.

“We wanted to send the message that we’re going to be publicly committed to and transparent about it,” Hill said at the conference.

‘Cast a wider net for advisors’

The industry must rethink how the position of financial advisor is presented to the public, according to Dylana Hopler, director of the central Florida complex at Ameriprise.

“We have to rebrand the position. We can absolutely cast a wider net for advisors coming into this business,” she said at the conference.

“Twenty or 30 years ago, it was, ‘Are you the best stock picker, are you the best bond picker?’ People would say, ‘I’ve been doing my own investments on the side, I’d be great at this business.’ But we have to understand that the industry has shifted,” she added.

The role of a financial advisor today has “become more about helping clients reach their goals” as well as “about coaching people and building relationships,” according to Hopler.

“We need to rebrand to be able to attract a greater talent because there are a lot of folks out there that would be great at what we do, but don’t think that they would be, so they don’t even raise their hand,” she said.

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