The advice market has come some way to address diversity issues within its community, but more needs to be done, says Sandy Pabial.
The independent financial adviser at Continuum says the space will evolve naturally as client bases diversify, but warns it requires "accelerator initiatives" where evidence suggests there is under-representation disproportionate to the increasing diversity in the population.
She says the benefits of a diversified workforce are clear: people with different experiences can approach challenges differently and perhaps even show greater empathy and understanding to the issues clients are facing.
In a Q&A with FTAdviser Pabial explains why diversity is still lacking in financial advice and why small firms are part of the problem.
FTA: Does financial advice have a diversity problem?
SP: There is a lack of representation of women and minority groups including the following:
- Diversity in thoughts, experience and personality.
- Age diversity.
- Socioeconomic diversity.
In recent years the industry has focused on gender diversity, and progress has been made, but there is some way to go to be an inclusive industry for all.
To a certain extent, the advisers are driven by the audience they serve. Historically, the majority of clients were white, male, and looked to be advised by like-minded individuals that reflected their profile.
As client bases become more diverse, the advisers who serve them will naturally become more diverse. However, the advice market requires accelerator initiatives where evidence suggests there is under-representation disproportionate to the increasing diversity in the population.
The advice market also needs to ask if it is wholly able to meet the needs of some diverse groups, particularly in relation to certain religious beliefs and priorities. This could potentially preclude these groups seeking out financial advice as they perceive it is not appropriate for them.
FTA: How would advisers and clients benefit from greater diversity in the industry?
SP: People from different backgrounds and experiences can approach challenges differently. It could be argued that there is also greater empathy and understanding should the adviser have direct experience or exposure through their community to the issues faced by the client.
Financial services play a critical role in changing people’s lives and it's important that it is managed by individuals who have a diverse range of experiences and perspectives.
An inclusive workforce can bring multiple benefits to the financial services industry, such as improved reputation, better employee satisfaction and client experience.
FTA: How can we get more people from diverse backgrounds interested in financial advice?
SP: Opening doors for them to explore the opportunities we have to offer.
Financial planning communities such as NextGen Planners, which I am a member of, can also help. NextGen Planners strives for inclusion and shares best practices throughout our profession and as an industry as a whole. They offer training, development, and a safe space to ask questions in a supportive environment.
