It’s time to start expanding what financial advisors seek in the ideal client. According to a recent study by Discovery Data, the financial industry is out of sync with the U.S.’s current diversity and inclusion demographics. While the reasons might vary, one thing is clear – there are underrepresented segments of society, and they are actively seeking financial advice. Why is diversity in finance both a bad thing and a great thing? Keep reading.
Diversity in finance is essential. If you aren’t targeting all your prospects, you’re missing out.
Which demographics are missing out? The study showed a startling lack of representation between advisors and the general population. The most underrepresented groups by the highest amount were Hispanics and Black or African American. Also underserved, but to a smaller degree, were those that consider themselves American Indian, Alaskan Native, Native Hawaiian, Pacific Islander, or Other.
Another demographic left hanging? Women, by a startling 28% relative to the general population. More and more women are working in high-paying careers and needing financial guidance. Women are steadily closing the wage gap separating them from their male counterparts. Plus, they are more likely to leave the workforce to raise children or care for elderly parents. Possibly both. Women are an overlooked demographic, and if you aren’t competing in this demographic, you could be missing out on huge returns.
Another problem? Many companies and advisors aren’t aware that they are missing out.
Sometimes it’s hard to look in a new direction or consider a new type of client. And that seems to be the case with many financial advisors and companies. Over 32% of respondents didn’t know whether their firm had a diversity and inclusion program. They also weren’t aware of any goals set or made by the company. Even worse? 6% said there were strongly negative feelings towards diversity and inclusion. Bottom line? Diversity in finance is lacking and many companies don’t even realize it’s a problem.
“Be the change you want to see in the world” ~ Mahatma Gandi
Inclusion and diversity in finance is good for everyone. Advisors get a boost from reaching a new, qualified, growing demographic, and consumers gain the benefit of one-on-one financial expertise. Reaching out to new segments of society is a win-win for all. Learn more about how LeadingResponse can help grow your financial business, in any demographic or location.