In today's increasingly diverse world, it's increasingly important for plan advisors to address ways to open the industry up to a more diverse workforce, advised panelists at an April 8 workshop session at the 2019 NAPA 401(k) Summit in Las Vegas.
While there is still much work to be done overall, firms which have moved to address advisor age, gender and race diversity have reaped benefits in some surprising ways, noted moderator Janine Moore of the Peak Financial Group. As an example, Moore pointed to a McKinsey analysis that looked at diversity’s dividend, which found that gender diverse companies were 15% more likely to outperform those that are not as gender diverse and ethnically diverse companies were 35% more likely to outperform.
But, as Moore noted, the “elephant in the room” is that underlying general biases still exist. She pointed to a Yale study in which professors received the same one-page job applications, with half of the applicants named John and the other half named Jennifer. Despite having the same applications, John was scored consistently higher — and this held true even for female professors who apparently were just as biased.
To that end, panelists Mike Curry from UBS, Erin Hall with Bermudez/Hall Retirement Group of Wells Fargo Advisors, and Steve Dimitriou of Mayflower Advisors all agreed that in dealing with younger, more diverse advisors, it is important to have a willingness to keep an open mind and consider other perspectives, so as to not let bias creep into one’s mindset.
What’s more, they noted that there is an increasing amount of people retiring every day, including clients, so if you don’t have younger advisors to fill in the gaps, you could get left behind when it comes to obtaining new business. And they noted, it’s not just about growing your business, but also retaining existing clients.
As for approaching issues with different perspectives, Curry noted that as a Millennial advisor, he was brought up at a time when everyone got a “participation” medal, so his peers are used to expressing their opinion and want to be heard. As such, Curry noted, it’s important to not discount what they’re saying.
Speaking from the perspective of a Gen-Xer, Hall noted that when she was trying to build a business, she came to realize the importance of hearing other viewpoints. She explained that, while she may be good at “A, B and C, there are others who may be good at D, E and F” – so “why limit ourselves to other perspectives by not being open?” she asked.
So What’s an Advisor To Do?
Dimitriou told attendees how he came recognize that although younger advisors may be set in their ways, his practice has benefited from them. He observed that they have the ability to reach other client bases that he didn’t even know existed. But the key, he said, is to reward and provide robust compensation when these advisors bring in new clients and help expand the base. What’s more, Dimitriou stressed the importance of peer rewards and recognition. “You want them to feel appreciated,” he noted.
Similarly, Hall emphasized that “if younger advisors always see the boss getting all the perks and it never flows down, then they can come to resent that; there’s an opportunity for those ancillary benefits, such as golf outings, to flow down.” It makes a big difference, Hall added. “How people feel is going to dictate what they do on the job.”
Curry emphasized the importance of recognizing leadership and creativity by inviting younger, diverse advisors to be included with something that’s not necessarily part of their role. “Giving people the opportunity to learn something and expand their role can pay tremendous benefits,” he noted.
Hall further emphasized the importance of strategic networking to make sure you’re reaching diverse communities. Creating diversity within your team has to be a proactive approach, she noted, such as seeking out women’s or Millennials’ networking groups when looking to hire.
As for setting up new joiners for success, Curry emphasized that once you hire a new joiner, it’s important to remember that you have them on your team for a reason and to not forget the value they bring to the table. Curry also emphasized that it’s a useful exercise to help new joiners understand the big picture and how they fit in with the team.
Other takeaways from the panelists include:
- trusting young, diverse advisors to go out and gain experience, emphasizing that the team is there to support them;
- making sure they feel they have some say and are valued;
- having a career advancement track for younger advisors so they know where they stand on progression within the company;
- letting the marketplace drive your search for diversity, and help with reaching new business opportunities; and
- using available resources, such as LinkedIn, to help reach diverse job candidates.
Moore also encouraged women attendees to attend the upcoming Women in Retirement Conference in Chicago, scheduled for June 24-26, 2019, as a way to continue addressing the challenges and opportunities that women in the industry face, both personally and professionally.
