Financial planning in need of more diversity, new report finds
The CFP Board Center for Financial Planning released a new research paper on Thursday exploring the lack of racial diversity found within the profession. Titled "Removing Barriers to Racial and Ethnic Diversity in the Financial Planning Profession," the paper focuses on the need to attract more black and Latino professionals, and that attitudes of the profession as a career path were also in need of repair.
According to the CFP Board, less than 3.5 percent of the current 80,000 CFP professionals in the United States are black or Latino, a figure that is far from reflective of the populations who make up the overall U.S. population.
"The need to recruit a more diverse population into the financial planning profession is essential to serve our increasingly diverse American public,” said Marilyn Mohrman-Gillis, executive director of the CFP Board Center for Financial Planning, in a statement. “This research provides additional data that will help us understand the challenges people of color face when entering the profession and create opportunities for prospective CFP professionals and the firms that employ them.”
The CFP Board polled 2,276 individuals involved in the financial planning profession for the report, ranging from HR professionals, current CFP professionals, those who work with financial planners, and black and Latino professionals, ages 20-54, "open to the idea of becoming a financial planner." Notable findings include:
- 75 percent of current CFP professionals polled consider the "typical" financial planner to be white and male.
- 70 percent of black professionals believe companies are more likely to hire whites over themselves.
- Of the potential black and Latino financial planners surveyed, 58 percent have never seriously considered the field.
- A majority (58 percent) of current CFP professionals polled, who are neither black nor Latino, believe a lack of diversity is due to "reluctance to pursue the profession," compared to 10 percent attributing it to companies not hiring more people of color.
- The top cited beliefs for underrepresentation in the profession were a "lack of role models" and "profession not top of mind" for potential candidates.
- 68 percent of black CFP professionals are "very likely" to recommend the field to others, with 59 percent of Latino CFP professionals doing the same.
- The most popular recommendations for boosting diversity in the field include formal mentoring programs (56 percent), introducing financial literacy courses earlier in education (54 percent), boosting awareness of the career in financial planning (51 percent), and adding more diversity hiring programs (34 percent).
The CFP Board plans on releasing an additional thought leadership paper on their findings, complete with solutions for boosting diversity numbers among financial planners. A Diversity Summit is also planned for New York City on October 23, 2018.
For more information, including the full research paper, head to the CFP Board's site here.