It's tough to break the perception that every corridor within the financial services industry has a glass ceiling for both women and minorities.
Firms like Edward D. Jones & Co. are trying to shatter those misconceptions by getting successful female and minority advisers to open their own offices and recruit more diverse employees.
But it’s not enough to just recruit more women and minorities to the firm. Edward Jones’ veteran advisers also stick by new entrants to help overcome obstacles to building their business.
While every new financial adviser — diverse or not — has support from the firm’s regional field trainers, women and minorities have particular challenges they must wrestle with, according to Elizabeth Schehl, director of financial adviser diversity and female performance at Edward Jones’ headquarters in St. Louis.
“Women tend to struggle most with balancing career and personal obligations — whether that be family needs or personal goals such as training for a marathon, or in dealing with the guilt that results from making sacrifices or impacting their family situation while they are initially building their career,” Schehl said.
For minorities, it could be struggles to not misconstrue why people slam a door in their face or fail to return their phone calls as they solicit their services, said Jesse Abercrombie, an Edward Jones financial adviser in the Dallas area who helps recruit and mentor new minority entrants.
“We don’t want them to look at the color of their skin and use it as an excuse, because then it will mentally handicap them,” Abercrombie said. “We try to empower diverse financial advisers and let them know that all advisers face rejection for one reason or another.”
Edward Jones has been countering these challenges through its Women’s Initiative for New Growth Strategies, or WINGS, program, which launched in 2008. More recently the company has built its Building Results through Inclusion Driven and Guided Efforts, or BRIDGE, program. This program, launched in 2012, is designed for new minority financial advisers.
Although the industry is still dominated largely by white males, Schehl said Edward Jones is working to get more women and minorities to enter and stay in the field.
In 2011, the Financial Industry Regulatory Authority reported that 16 percent of financial advisers on average were women and 8 percent on average were minorities. But since the start of 2009 to the end of last year, the percentage of new Edward Jones financial advisers each month who are women has averaged 20 to 25 percent, while the percentage who are minorities has averaged 10 to 15 percent.
The biggest impact of the WINGS and BRIDGE programs has been the decline in attrition of both female and minority advisers in the first and second year of their business. This is in part because of the additional support of the two programs, Schehl said. From 2008 to 2009, the attrition rate for new female financial advisers declined 10 percent, and for the first year of the BRIDGE program — from 2012 to 2013 — the attrition rate for new minority financial advisers declined 5 percent.
Schehl said Edward Jones is developing an engagement survey for participants in the WINGS and BRIDGE programs to more fully gauge the programs’ impact on retention.
Solskin Gomez-Krogh, executive director for the Chicago chapter of the Association for Latino Professionals in Finance and Accounting, said it’s important for financial service corporations to have both formal and informal mentoring programs for women and minorities just entering the field.
Mentorships for new entrants who are first-generation Americans and are financial officers, accountants or advisers are particularly critical, Gomez-Krogh said. People entering those professions — particularly those who plan to provide wealth management services — can often benefit from having candid conversations with a mentor about certain behaviors and practices that might turn off prospects. Having a veteran who is not their manager and who can keep their conversations confidential can help them feel safe enough to divulge any faux pas.
“For example, sometimes a person from the Latino community speaking English may unintentionally slip Spanish words into the conversation,” Gomez-Krogh said, “and it helps if a mentor can point that out. A person who is not Latino may not understand why they are doing that, but it’s often unconscious. That’s why it’s so important to have somebody who knows the ins and outs of the organization’s culture to guide them through that.”
Edward Jones already knows it’s smart to have female and minority financial advisers to boost its business. According to a September 2013 Edward Jones online survey of more than 2,000 adults, nearly 80 percent of Hispanic and African-American respondents believe it is in the best interest of financial services firms to focus on hiring more multicultural financial advisers to better reflect their client base. Additionally, 76 percent agreed it is also in the clients’ best interests to have a more diverse financial adviser base.
Giving Them WINGS
Schehl said attracting more women to become financial advisers entails communicating that the notion of a “glass ceiling” doesn’t mean as much when an adviser is in charge of his or her own office. Many are relieved they do not necessarily have to have a finance or accounting degree to run a successful advisory business — just a keen interest in helping others manage their finances.
Once on board, each new class of female financial advisers within a particular market is paired with a successful veteran female adviser in WINGS’ seven-week “early success coaching” program. They meet weekly to talk about what it’s like to build a practice and how to overcome objections. Many women in these classes keep in touch with each other and with the veteran adviser after the early career program concludes to get additional support to help build their practice.
Through these actions, the firm learned that women needed such additional support through focus groups of both new male and female financial advisers.
“We found that women tend to be less apt to raise their hand and ask for help, as they feel it shows a sign of weakness,” Schehl said. “However, that unwittingly makes them feel more isolated and less successful. But most men in our focus groups said that if they had challenges, they were more willing to reach out for help, and that’s why we believe they are well-served by our field trainers.”
Edward Jones also holds a biennial Women’s Leadership Forum at its St. Louis headquarters that recognizes successful female financial advisers throughout the firm. It also provides networking and career development opportunities for women attending the event.
Building a BRIDGE
Abercrombie, who joined the firm in 2003, is one of the regional leaders in the BRIDGE program, which helps to recruit and retain minority financial advisers in the region surrounding the Dallas-Fort Worth area. Minorities accounted for 6 percent of the financial advisers at Edward Jones at the end of 2013 — a small improvement since Abercrombie first joined the firm, when only 3 percent of the advisers were minorities.
But considering that minorities comprise 37 percent of the overall U.S. population, according to the U.S. Census Bureau, Abercrombie and other BRIDGE leaders across the country are working to increase minority representation at Edward Jones even more.
While every financial adviser in the firm is encouraged to lure in minorities they believe would be successful in the profession, Abercrombie said some of the firm’s best recruiting efforts have come from veteran minority financial advisers who have established networking contacts. Some regions have teams of minority advisers who recruit for the BRIDGE leader in that region, leveraging Edward Jones’ relationships with several national minority advocacy and business organizations. The recruiting teams also work closely with local minority organizations within their communities.
Additionally, BRIDGE leaders regularly network with all of the minority financial advisers in their regions, meeting quarterly to talk about issues facing diverse advisers. The purpose of these meetings is to not “moan and groan” about challenges for minority financial advisers in particular, Abercrombie said, but to “keep the meetings as positive as possible” by focusing on finding ways to overcome stated objections without second-guessing the prospects’ intent.
Edward Jones also holds a biennial Leadership Diversity Forum with seminars, educational workshops and networking opportunities for minority financial advisers and associates. Past speakers have included Andrés Tapia, author of “The Inclusion Paradox”; Dr. Benjamin Akande, dean of the Walker School of Business and Technology at Webster University in Missouri; and Ted Childs, a retired IBM Corp. executive who spoke about how he was able to use his firm’s diversity and inclusion program to help the company.
BRIDGE leaders as well as “ambassadors” particularly provide support in the minority financial advisers’ first year of business.
“If a new adviser is having a bad day, they can go to this person so they don’t have to feel alone,” Abercrombie said. “If, for example, they encounter some rejection when sourcing new clients, the ambassador can help them overcome those types of situations.”
While the 2013 survey from the firm showed that women and minority investors like seeing more representation at financial advisory firms, Abercrombie said he shies away from urging new entrants to target only prospects of the same gender or ethnicity.
“I don’t want to just court African-Americans as customers,” Abercrombie said. “I want to stand out in a crowd so I can be noticed.”