Slideshow Can the Industry Solve Its Diversity Problem?

  • November 25 2014, 5:04pm EST

State of Wealth Management

The wealth management industry continues to have trouble diversifying its advisor ranks, and the business' top leaders say it's long past time to make some headway. Making progress, they say, is critical to keep the business thriving.

Here are some of the key comments executives said as part of On Wall Street's special report on the state of wealth management, which focused on the most pressing issues facing the industry.

Reflecting a More Diverse World

It's critically important to the future of the business that the industry develop a more diverse workforce, argues Keith Banks, President of U.S. Trust, part of Bank of America. Banks points not only to shifting demographics, but also to the fact that women are controlling more wealth than they once did – a trend that will accelerate as the baby boomer generation ages.

"We live in a diverse world. I think if your workforce does not represent that broader population, then you are out of sync with where the world is. It’s just good business sense to better represent that, and it’s also the right thing to do," he says.

"I’ve always tried to create an environment where a person could succeed based on the value that they brought — not their color or gender or sexual orientation. It’s about the value they create as an employee. If you can reflect that and demonstrate that in the people you hire and promote, then you’re sending a powerful signal that you are a company that values that."

Content Continues Below

Getting Focused

Greg Fleming, president of Morgan Stanley Wealth Management, laid out his firm's plans to boost the number of women in the wirehouse's advisor ranks.

"We are very focused on increasing the number of female advisors we have, and increasing the ranks of female managers to reflect the role women are playing," he says.

"Given the number and quality of women we can bring into the organization, and given that women make good financial advisors, we’re going to make a difference over the next five years. Our business will evolve to reflect the society we’re working in. But part of that for me and the leadership team is making it clear that this is a priority."

'A Greater Sense of Urgency'

Despite calls to boost the numbers of women and minority advisors, the industry continues to fall short, says John Taft, CEO of RBC Wealth Management-U.S.

"The percentage of women advisors is significantly less than the percentage of women clients, and the percentage of visible minority advisors is far smaller than the percentage of minority clients," Taft says.

"But there is a greater sense of urgency than I’ve ever seen before. Our firm is very focused on recruiting women and minority advisors and managers because there is no question our client base is becoming more diverse."

Raising Awareness and Reaching Out

To make progress, Mary Mack, president of Wells Fargo Advisors, suggested the industry could do more outreach to the next generation because talented young people are choosing careers without knowing that wealth management is an option for them. Mack highlighted an annual Wells Fargo women advisors' conference as an example. But it can't end there, she argued.

"How do we partner with institutions of higher learning that are focused on educational processes for people who may be inclined to do this; how do we think about skills differently? And how do we leverage our own advisors who can be some of the most compelling advocates for this business? So we have women who are financial advisors with us who are incredibly energized about the opportunity to tell those stories, either for career changers or for individuals who are entering the workforce."