Frank Paré talks diversity, institutional change and those sensitivity training videos

The financial planning industry is overwhelmingly white (and male). Only 1.8% of just over 92,000 certified financial planners identify as Black or African-American, according to data from the CFP Board, the nonprofit group that sets the standards for the CFP credential, the gold standard of individual planner designations.

Among those 1,652 professionals, Frank Paré, 58, is widely considered a thought leader and repository of historical knowledge about the emergence and evolution of diversity, equity and inclusion issues in the wealth management industry. He started as a stock record clerk at Charles Schwab in San Francisco in 1990, handling customer documents in storage vaults. Then he shadowed traders on Schwab’s equity trading desk, later becoming a compliance analyst for the discount brokerage. In 2001, he became the head of compliance at wealth management firm Loring Ward (which was later acquired by Focus Financial Partners and merged with Buckingham Strategic Wealth).

In 2006, he struck out on his own as the president and founder of PF Wealth Management Group in Oakland, California, a boutique firm with $11.7 million in assets under management that targets mass affluent and high net worth clients in the San Francisco Bay area and beyond. (PF stands for “people first,” not Paré’s initials reversed.)

The financial planning industry is making baby steps toward improving its record. Last year, the number of Black and Hispanic planners grew to 4,196 — a 13.8% increase over 2020. The ranks of Black professionals grew by more than 10% last year compared to the prior year. FP spoke with Paré, a CFP since 2005, about what has been accomplished and what still needs to be done.

FP: In the wake of global protests against the May 2020 killing of George Floyd by a police officer in Minneapolis, many companies and organizations came out with public declarations about their commitments to diversity. It seems that many of those pronounced intentions have yet to be put into action. Am I being too cynical?

Paré: I don’t think you’re being too cynical. You’re right, in the sense that post-George Floyd, there was a huge uproar from various industries and groups in response to the massive protests that took place around the world. I think companies and organizations felt a certain pressure to come out and say something in solidarity to show that they’re being responsible and empathetic. It was a moment that was encouraging.

But once the [criminal] case and convictions took place, I think people kind of went back to business as usual, to “well it was terrible, it was a crime and the officers who committed the crime paid the price, [but] never mind the structural stuff” that people were bringing awareness to. By looking at it as being resolved, or as justice being served, it allowed corporate organizations to go back to business as usual.

Since George Floyd, there have been police killings, there have been convictions, but there hasn’t been any real discussion of “are we following through with what we said we were going to do?” Some companies and organizations implemented changes and have been working through the challenges. But there are some who were the loudest who said, “Ok, now that it’s over, let’s start rolling.”

FP: What do current DEI initiatives get right, and what do they get wrong?

Paré: When you look at DEI and the willingness to implement something, what people fail to recognize is that just as there’s a lot of energy to implement, there’s also a lot of energy on the other side not to implement. There’s going to be pushback from people who are uncomfortable.

I’ve been in this business for 30-plus years. Before, it was just diversity, not equity and inclusion. At the time, I thought it was a really sort of nice effort in the sense that I thought it meant bringing in more people of color, women, LGB — now it’s LGBTQ+. I thought it meant just being more open to bringing individuals with diverse cultural and gender backgrounds. What I later found was, no, it meant bringing in people with different thoughts. And what I later learned was that that didn’t necessarily mean that it was trying to include culture. So it morphed over the years, and now DEI can mean people of diverse cultures, sexual orientation and gender. What I might perceive as diversity and inclusion might be different from what somebody else perceives as diversity and inclusion.

The CFP Board has done a great job with their diversity summit. They’ve been intentional at least in bringing in different voices on what all of these things look like to the various individuals who are speaking on the topic. But when you look at a corporate discussion, that’s where it gets a little trickier. You have not only the employees, but also shareholders, clients and various stakeholders who might view DEI as something either totally different or a waste of time altogether.

FP: It seems like the whole movement’s original intent has gotten diluted. Does DEI need to be distilled back to its original mission?

Paré: That requires courage. Just as DEI may start off with a lot of energy and pushing to expand the pool of individuals who may have been historically locked out, you’re going to have individuals on the other side who are going to argue passionately against it. The courage is in maintaining the original intent of what DEI was supposed to bring forward and, in so doing, having the courage to stand firm when these forces are at work.

That’s not easy. Regardless of how firm a person might stand, if you have individuals in power, they’re going to exercise that power, and your ability to continue standing and fighting is going to be somewhat hampered. That’s not to say one should give up. It’s just going to be a harder fight in the corporate world.

Our industry is perhaps more conservative. You’re going to have people who are well-meaning, who are going to bring some of these issues forward, and they’re going to try to implement them across an organizational structure. But we know that organizational change is a heavy lift in itself. And so it’s going to be degrees of success and degrees of failure.

FP: Organizations and companies don’t like to talk about their setbacks on the DEI front for fear of seeming to backpedal on some of their initiatives. Let’s discuss.

Paré: That’s a great point. Let’s bring it down to the individual level. These are uncomfortable conversations to have. The challenge is having the willingness to have the engagement. Simply having the conversation does not mean that you are a bad person, that you have to feel guilty or adopt this ‘guilt’. Instead, it means you’re willing to figure out a better way. That’s where the courage and magic occurs. Organizations recognize there is a better way, a better future, but we have to deal with the proverbial messiness of the elephant in the living room. People have to be willing to deal with this discomfort.

The people in this profession that are part of the DEI group are professionals and want the best for the organization they’re working for. It’s not about saying, “you owe me something”; it’s about being more inclusive to be better at what we do. That also includes equity. We want to be treated in the same way, whether it’s pay or the same opportunities as the next person. Those are reasonable expectations to have.

For someone to argue against that, it’s like arguing against having two limbs. It’s like saying, “No, I want to have one of my arms tied behind my back at work. I’m right-handed, it’s strong, I want to keep it strong.” Versus saying “I want to be DEI-side ambidextrous and have two strong arms.” That’s what the people on the DEI side are going for: two strong arms. That’s the beginning, not the end, of creating a better organization. But you’ve got folks out there who aren’t willing to have a conversation because it makes them uncomfortable.

All you have to do is observe. If you have an organization of predominantly white folk who now are being told they have to sit down with a DEI presentation, there is going to be some discomfort in participating. Because sometimes, it’s not a conversation that makes some people feel comfortable.

FP: Big companies like to trot out their sensitivity “training modules” for employees, as if diversity is an add-water-and-mix issue that can be solved by a mandatory training session over an hour or two on a laptop. But it’s not. Thoughts?

Paré: A 60-minute training module does not have tremendous impact on organizational change or cultural change. It could take upwards of two to three years to implement a full organization cultural metamorphosis. That just doesn’t happen through a video; it happens through a series of changes in policy, procedures, feedback loops — all of these things that help people to shift their thinking to the extent that it benefits the organization. Companies put on a public face of “look what we’re doing!”as evidence of cultural change. But a video or consultant isn’t going to do it. It takes time to stick with it when things get messy.

FP: What advice do you have for advisors who personally experience or see racism or discrimination in the workplace?

Paré: That’s a tough one. Microaggressions might be just that — or they may not be. Unless it is one of those clear-cut examples of overt racism, I don’t know if I could tell anyone what to do. Because part of the profession means being able to navigate in some instances environments that aren’t perfect but being able to navigate them to achieve your goals. Sometimes it might be racism, and sometimes it might not be. As a professional, you didn’t get to where you are simply by saying “I’m going to quit” and going home. And it would not be the first time a person experienced microaggressions or racism.

As professionals, we have to be very intentional in how we navigate this road. We have to not get caught up in who is racist vs. who is not racist, but instead to focus on, OK, who are the good ones we can work with? Who are the ones we kind of want to shy away from?

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