This article was originally published as the cover story for the April 2025 issue of Journal of Financial Planning.

Organizations across the financial services industry have dedicated significant time, attention, and resources to initiatives focused on increasing diversity. Wealth advisors have promoted these efforts through their vision statements, training programs, and other actions. And leaders in the industry regularly speak about the importance of making progress in this area.

Yet despite these efforts and proclamations, the financial services industry is falling short in its efforts to create diverse teams to support rapidly changing demographics.

Where is the disconnect between the message and the results? Is it an industry problem, or is there something else occurring that is inhibiting the recruitment, training, and success of advisors who are not White males?

Does the past determine our future?

The wealth management industry has traditionally been dominated by White males, especially when it comes to wealth advisers. The first Black American to be designated a CERTIFIED FINANCIAL PLANNER® was LeCount Davis, and this did not occur until 1978. Davis has stated that his success was forged with the odds stacked against him by building a client base that was 90% Black.¹

Research shows that in 2021, 69.1% of wealth advisors were male compared to 30.9% who were female. Looking back to 2010, the breakdown was 69.33% male and 30.67% female.² Thus, in over a decade, with all the focus throughout the industry on increasing diversity, zero progress has been made.

And the disparity goes beyond gender: As of 2021, 72.2% of wealth advisors were White, 9.4% were Hispanic or Latino, 8.3% Asian, and 5.6% were Black.³

Meanwhile, the industry is not keeping pace with the growing diversity of the communities it serves, with the diversity of wealth advisor positions lagging significantly behind national demographic shifts. Recent research projects that by 2045, less than half of the population will be White, with Hispanic and Asian groups projected to increase to 24.6% and 7.9% of the population, respectively.⁴

Diverse advisors are facing barriers

Regardless of where the disconnect originates, there is no question that something needs to change if we are to better serve financial planning professionals who have been excluded or faced unnecessary barriers in their attempts to thrive in the industry.

Today’s diverse employees are telling the industry they are not getting the same support as their peers when it comes to access to growth and development opportunities. Research highlights several obstacles identified by diverse wealth advisors currently working in the industry, including limited visibility or contact with leadership, insufficient mentoring programs, and implicit biases.⁵

These findings raise the question: Once leaders have recruited a candidate to come into the industry, how can they support their success for the long term?

For change to occur, leaders at all levels will need to expand their knowledge of how to recruit, support, and nurture female and minority wealth advisors.

The case for inclusive leadership

Inclusive leadership theory could offer a path forward. The theory posits that organizational leaders who make each individual feel part of the team by embracing their uniqueness can build stronger, more successful teams. The competencies that define the theory include promoting a culture of openness, accessibility, and willingness to learn, enabling leaders to harness the possibilities of a diverse team through their range of personal experiences and backgrounds.

Leaders must take a collaborative and facilitative approach rather than rely on the old tactics of command and control. Projecting confidence in creating an environment that recognizes and appreciates differences in team members when it comes to gender, race, culture, age, and other factors takes yet another skill set.

In recruiting the next generation of wealth advisers, leaders need to focus on educating both female and minority candidates so they better understand the role of a wealth adviser, what is required to be successful in the role, and the steps they can take to be successful in the industry. Recruiting efforts can also be amplified in areas where those candidates are located, such as in high schools and on college campuses that have a highly diverse population.

The benefits of diversity for organizations

There is ample quantitative evidence of the benefits of prioritizing diversity. Research shows that diverse and inclusive organizations outperform organizations that are less inclusive by 50% on average, and individual employee performance in a diverse company is 12% higher than in non-diverse firms.⁶

Another study of global organizations conducted by Deloitte found that inclusive teams are six times more likely to be innovative, six times more likely to anticipate change and respond effectively, and twice as likely to meet or exceed financial targets.⁷

These findings reinforce the benefits of creating diverse teams across different industries and highlight the potential cost the wealth management industry faces by continuing to be behind the curve.

Conclusion

The wealth management industry has a diversity problem, with wealth advisors over its entire history having been mostly dominated by White males. Long-standing and deeply ingrained gender norms and industry demographics have contributed to women and minority groups feeling they are not part of the world of finance.

At the same time, the wealth management industry has not been successful in recruiting and developing female or minority wealth advisers. Clearly, something needs to change.

By focusing on recruiting efforts in the right areas, building training and development programs that support behavior change for leaders within the industry, and creating a culture of diversity and inclusion that can be appreciated by diverse candidates, we can begin to take meaningful action to reverse the lack of progress the industry has made on improving diversity. This will also allow organizations to better reflect the diverse makeup of their communities, enabling wealth advisors to create wealth strategies that are better aligned with each client’s unique goals and experience.