A career in the financial services industry can present tremendous opportunities. It’s truly a profession where the sky is the limit, not only for the individual who enters it but for those they serve. Unfortunately, not enough diverse students are choosing this path.
That means financial services organizations are not only missing out on amazing talent with new perspectives—but also the opportunity to open doors to support underserved communities, which has direct implications for the wealth gap in our country.
Why are too few diverse students choosing such an attractive career path?
According to a Nationwide Retirement Institute® study1, 90% of Black college students considering a financial services career report they believe there are challenges that specifically affect Black advisors and financial professionals in the industry today. This sentiment is echoed by current Black advisors and financial professionals, with 87% agreeing Black professionals will face distinct challenges.
These findings help paint a picture of the barriers to entry and growth facing Black financial professionals today. The largest challenges perceived by Black advisors are a lack of mentorship opportunities, discrimination on the part of the consumer, and a lack of a natural market. The research also shows the need for more Black executives in the industry so others can envision themselves in similar roles. Black professionals say they need to “see it to be it.”
To address this opportunity, the Financial Alliance for Racial Equity, or FARE, was created by several leading financial services firms and historically Black colleges and universities (HBCUs) to drive real structural change for Black and diverse college students and financial professionals, and advance social justice in the process. FARE aims to close the wealth gap by increasing racial diversity, equity and inclusion within the financial services industry and the communities they serve. The goal is to not just attract more diverse talent to the industry but to help these talented individuals grow throughout their careers.
“The lack of diversity has long been an industry problem, and Black college students and financial professionals want to see real change,” said Kristi Martin Rodriguez, senior vice president of the Nationwide Retirement Institute at Nationwide, a FARE member firm. “As a proud HBCU grad – I am so excited for the students getting these opportunities. It’s not only the right thing to do – a more diversified industry is good for business.”
FARE believes that more diverse talent will open doors to serving more diverse communities and ultimately change the trajectory of the wealth gap in our country. With the unique partnership of HBCUs and financial services organizations, members of the alliance seek to build sustainable economic wealth in these communities.
“Partnering with HBCUs offers us direct access to some of the best and brightest students in the United States and also offers us access to those individuals who can go in and succeed through internships, but also as financial services professionals,” said Clarence Knox, senior vice president of global sales of FARE member firm, Miami Life. “In turn, these professionals will leverage that education and social experience that they were fortunate to receive at an HBCU to help bridge the wealth gap in those communities that are underrepresented.”
Formed in late 2020, the FARE alliance has grown membership by 35%, in just one year, to 19 members, including Advisor Group, Capital Group, Defined Contribution Institutional Investment Association, Nationwide, Morgan Stanley, M Financial Group, Franklin Templeton, NFP, Huntington Bank, Miami Life, in partnership with six HBCUs, including Hampton University, Howard University, Lincoln University, Virginia State University, Virginia Union University and Winston-Salem State University. Industry partners include Employee Benefit Research Institute, the CFP Board, and The American College.
To help put ideas into action, FARE has established a task force focused on creating awareness of opportunities to attract diverse talent to the industry. The committee is building an intentional talent acquisition strategy that focuses on a targeted and rich internship program, a strong on-campus presence, increasing financial literacy awareness, and providing career planning resources.
Another team of FARE members is focused on creating professional development and networking opportunities to increase loyalty and retention among early-career diverse financial services professionals. This includes professional development, peer group and networking, and a mentorship circle. This committee is also working on helping mid-late career financial services professionals grow their career and business portfolio to better serve and meet the financial and retirement planning needs of underserved communities. FARE member firms also committed over $100,000 in scholarships for financial professionals to obtain a CFP® certification beginning in 2022.
“We have recognized the significance of this moment in time. We can always learn from one another through the FARE coalition,” said Mike James, executive vice president of FARE member, NFP Life Solutions. “We are building a framework that will last and offer more diverse people (students and financial professionals) more opportunities. The time is right, this initiative is right.”