Wealth management leaders often flaunt the concept of “return on investment” when wielding money around firm initiatives — including recruiting and hiring.
When dealing with cold dollars and cents, ROI represents a prudent measure to assess if you’ve earned more than you invested. Yet when it comes to investing in human capital, ROI requires much more nuance — often more than most firms are willing to account for, especially when it comes to identifying and attracting Black advisor talent.
There’s a reason that only 1.68% of 88,726 CFPs in the U.S. are Black. I’ve lost track of the times I’ve witnessed wealth management firms refuse to fully engage systems and structures — ones riddled with multiple decades of underinvestment that drastically impact Black advisor development and opportunity. These firms falsely believe that their paltry budget line items and dismal allocations of time and energy for recruiting and attracting talent will yield Amazon-like returns.
At the other end of the table, professional underdevelopment is a particularly acute issue for Black first-generation corporate professionals like me who lacked early career exposure to corporate etiquette and/or the politics that drive one’s understanding of negotiating salaries, demanding training and co-designing one’s career path.
Lack of astute corporate engagement on the part of aspiring and motivated Black advisors combined with key decision-makers who fail to acknowledge and share their privilege as the current racial majority make for a continuous shortfall when it comes to human capital advancement and investment. These leaders, falsely believing that the launching point and trajectory are the same for all talent, fail to quantify the downside equity Black advisors inherited from decades, even centuries, of compounded discrimination, and desire a quick fix to make history go away to appease their discomfort.
Turning the tables on a broken process
If we agree that Black advisor talent shouldn’t be treated like penny stocks and that talent placement and trade associations shouldn’t be tasked with solving a monumental problem perpetuated by the “investors,” then what is the solution?
Transforming and amplifying human capital requires keen strategy and additional resources. What if Black advisors started to turn the tables by posing questions to prospective employers?
Questions like:
“What is my ROI for partnering with your firm?”
Or, “What experience do you have with nurturing and advancing Black advisor talent?”
Or, “How do I know that my investment of time and energy will yield equitable pay and opportunity and invite a deep sense of belonging as a team member?”
The results would be a win-win for all participants. By viewing their workforce as partners and not workers, and time and energy as valuable as money, wealth management firms stand to receive a lucrative ROI in the form of innovation, sustainability and profitability. Concurrently, Black advisor talent would realize the opportunity to optimize their human capital, elevate their trust in the partnership and invite colleagues to consider joining the team through referrals.
Look, listen and stop
It’s also what you don’t do to redefine ROI in an increasingly diverse environment that matters, according to Peter Drucker, who writes and speaks on the intersections between sexuality and gender, ethnicity and political economy. “Half the leaders I have met don’t need to learn what to do. They need to learn what to stop,” he says.
In this age of speeding up and learning to slow down, consider if your firm needs to stop these practices:
- Investing in performative initiatives, such as denouncing racism with no substantive actions to back it up, that suggest hospitality to Black advisor talent when your culture remains exclusive and homogeneous.
- Believing that good pay is the chief factor in making Black advisor talent happy while ignoring the importance of a sense of connectivity as a team member.
- Demonstrating fear or hesitancy in dealing with race, knowing that race issues are a constant reality for Black advisor talent.
- Avoiding tough conversations about privilege and not recognizing the inherent power associated with rank and representation.
- Adhering to business practices, such as inequitable starting salaries, that have historically marginalized humans and human capital.
The wealth management profession can no longer view ROI as a one-way street. Financial services, along with corporate America, has reached a tipping point where they must balance the rigor and discipline of traditional business practices with the soft skills and sophistication that modern culture demands.
Black advisors can and should be emboldened to ask questions that will not only secure a good match as they enter or advance through the profession, but also provide forward-thinking firms the ability to showcase their leadership by advancing and elevating Black talent.
When all parties leverage ROI, everyone stands to gain.