A ‘Grave’ Threat for Advisories
Pershing Advisor Solutions’ CEO challenges advisers to diversify their staff — or become irrelevant.
Pershing Advisor Solutions’ CEO challenged advisers to diversify their staffs — or become irrelevant.
LACK OF DIVERSITY WITHIN THE ADVISORY INDUSTRY represents a “grave” threat, according to Pershing Advisor Solutions CEO Mark Tibergien.
“Our talent doesn’t reflect the face of our community, nor does it reflect what I think is important for the continuation of the independent financial adviser movement to address as a crisis,” Tibergien said in a speech at the May NAPFA conference near Seattle.
“To the extent that we do not address what our future is going to look like, what you have created here with NAPFA will become irrelevant in 10 or 15 years. It’s a call to action.”
Tibergien, who runs one of the country’s largest custodians, admitted that a 65-year-old white man is an ironic speaker for this message. He and other presenters at the conference, however, pointed out the sheer numbers highlighting the problem. They also proposed a series of changes they hope will lead to more advisers who are minorities or women.
“We as a society have overcome a lot of the overt sexism that is out there in the workplace. But I do believe that there’s still unconscious bias and gender-role expectations that still exist, most of the time unintentionally,” said Gretchen Halpin, principal of Hewins Financial Advisors in Chicago.
“In the financial services industry, a lot of the leaders of the firms are still from that past generation of thinking,” she said. “And so that unconscious bias comes into play when young women are moving into the workforce.”
Data display stark gender and racial disparities. Only 8% of advisers at 18 large financial services firms are people of color, according to a SIFMA demographics study.
And just 48,631 advisers out of 310,504 overall — about 16% — are women, according to a study earlier this year by Cerulli Associates. Female advisers earned 80% less in weekly median pay in 2016 than their male colleagues, according to the U.S. Bureau of Labor Statistics.
Forward-looking firms create career paths toward leadership roles for their advisers, Tibergien said. They also need to alter the tone of their recruiting pitches, specifically to correct the idea that advisers are just salespeople, to appeal to millennials and other young people, he argued.
Yet a common misperception among hiring executives remains that not enough women are qualified or want to be advisers, according to Manisha Thakor, the Houston-based director of wealth strategies for women at Buckingham Strategic Wealth and the BAM Alliance.
The growing wealth of women worldwide could force changes at all firms, however. Firms should take a close look at their leadership teams, said Eileen O’connor, CEO of Hemington Wealth Management in Falls Church, Virginia.
“There are not enough women in leadership positions,” O’connor said. “You can do a lot of talking about culture, but I think having women in those positions is what’s going to attract women to the firm.”
Tobias Salinger is an associate editor of Financial Planning, On Wall Street and Bank Investment Consultant. Follow him on Twitter at @Tobysalfp.