In the last three weeks, my husband and I have been to two money-related conferences in two states. The first was to promote diversity in financial services, and the second was to help credit unions leap into the future.
Unfortunately, we’re here to report that your bank, your brokerage and your credit union have “opportunities,” as we say in the business world.
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Diversity Is More Than Just Gender Equality
Today, there are more financial advisors over the age of 50 than all financial advisors who are in their 20s and 30s combined. Forty percent of those same advisors expect to retire in the next 10 years. Currently, there aren’t enough financial planning college students or those seeking their certified financial planner (CFP) designation to backfill for this inevitable dearth of financial planning professionals.
Likewise, the financial services field is dominated by straight, white males. With the minority growing into the majority in this country, financial services need to strive to look more like the tapestry that is today’s America.
To its credit, the financial services sector has put a lot of effort toward inspiring women to join its industry. Companies such as Fidelity and Charles Schwab have pioneered these advancements. In fact, at one conference, we attended a diversity breakfast and panel that was comprised entirely of women (albeit only white ones). This and similar efforts have moved the needle for women in financial planning from a tiny fraction to 23 percent by 2007.
But those efforts are still missing the mark. The percentage of women in financial planning has remained stagnant at 23 percent since 2007. This is a demographic that makes up 51 percent of the U.S. population.
Further, only 8 percent of financial planners report being members of racial minority groups. Most frustrating for those of us in the queer community, there’s no data on the percentage of LGBTQ people who are financial planners or in financial services altogether. As the University of Akron’s Department of Finance, College of Business Administration, said in its April 2017 Increasing Gender and Overall Diversity in Financial Planning and Wealth Management symposium, this “in and of itself suggests a diversity issue that needs addressing.”
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Come Together, Right Now
The queer community has nearly $1 trillion in purchasing power in the U.S. alone and spends nearly $100 billion of that on travel. According to Honeyfi’s recent survey of LGBTQ couples, our top three discretionary spending categories are dining out, entertainment and personal care. We aren’t increasing the assets under management (AUM) of financial advisors. We aren’t saving or investing that for our future.
Why is this?
For starters, more of us than the general population identify as spenders. We’re also less likely than the general population to feel as though financial services companies want or know how to help us. Unfortunately, the queer community lacks role models for money management success. We, likewise, don’t usually see ourselves proportionately included in the marketing and advertising of financial services companies.
According to The Motley Fool, the four largest banks in the U.S. control a combined $3.6 trillion in AUM. If, conservatively, just 4 percent of those assets represent LGBTQ households, that’s about $145 billion. That said, only one of those four largest banks in the U.S. has had a commercial that included an LGBTQ couple in the past several years. We are shamefully underrepresented in financial services advertising and marketing.
Imagine the financial security we could have and the increased AUM financial services could earn if we came together for our common good.
More on Your Financial Future: Is Your Outlook as Bright as Other Americans’?
We Need 12,000 Trans Planners
A fact that continues to come up in other conferences we attend and media we read is that the average trans person of color earns an exceedingly low wage. According to site The Task Force, for instance, 34 percent of Black transgender people report less than $10,000 as their annual household income. That’s, in part, because in 30 states, people who are even suspected of being trans can be denied employment, housing and services without recourse. Therefore, many trans people try to avoid too much attention.
Ironically, a recurring theme we heard at two more recent conferences is that while in general men are more analytical, women are more empathetic. Men are very goal-oriented, and women are very solutions-oriented. It would seem that people with genuine experiences in both roles, those who have both internal and external experiences as men and women, would be the perfect financial planner. They could give their clients a holistic analytical and empathetic perspective.
With the median income of financial planners being $67,000 a year, not only does it seem trans people could provide comprehensive financial planning but pull themselves above the poverty line.
Don’t you think it’s time we see more LGBTQ people on both the client and the advisor sides of the financial services table?
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