How the financial advisory industry can increase its diversity efforts

CNBC unveiled its top 100 financial advisors list and found that the industry lacks diversity. Lazetta Braxton, 2050 Wealth Partners co-CEO and a member on CNBC’s Financial Advisor board, and Evelyn Zohlen, 2020 Chair of the Financial Planning Association and Inspired Financial president and founder, joins ‘Power Lunch’ to discuss why there is a lack of diversity in the industry and what can be done to increase the numbers. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

Martin Seay’s term as president of the Financial Planning Association has, to say the least, been an eventful one so far.

Not only has the coronavirus pandemic changed just about everything in the advisory industry, but the Black Lives Matter movement and the nationwide protests that have followed the death of George Floyd at the hands of police in Minneapolis also present profound challenges to the White male-dominated financial advisory space.

Seay, a certified financial planner, is also Department Head and Associate Professor of Personal Financial Planning at Kansas State University.

The FPA, with 20,000 members, and the broader advisory space are undertaking a candid examination of the industry’s business incentives, hiring practices and work environments in terms of how they support the inclusion — or exclusion — of women and people of color.

To be sure, the scope of opportunities in the financial planning professional is quite broad and can be very rewarding. However, as varied as this profession is in the many types of job opportunities there are, the demographics of the industry do not reflect the diversity of the overall population.

There’s obviously a great deal of work to be done. Just 3.8% of the industry’s more than 87,000 advisors who hold the CFP designation are Black or Latino, according to the Certified Financial Planners board, the industry body which sets standards in financial planning. This compares with the approximately 20% of U.S. workers who identify as non-white or Latino, according to 2019 data from the U.S. Bureau of Labor Statistics.

What’s more, overall less than 20% of advisors are women.

It is not an easy reckoning. Nor are there easy solutions to change that reality. CNBC spoke with Seay about the challenges of increasing diversity in the advisory industry.

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