Companies increasingly disclose their workforce demographics. Why don't wealth management firms?

Publicly-traded companies are increasingly doing more to disclose the gender, race and ethnicity of their workforces , according to the nonprofit shareholder advocacy group As You Sow. Some firms lauded for their investment prowess — think Berkshire Hathaway, run by Warren Buffett, “The Oracle of Omaha” — score at the bottom of the list for revealing their employee demographics.

Read more: Which publicly traded firms have the best and worst racial equity grades?

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Wealth managers don’t systematically reveal the makeup of their workforces, but it’s no secret what that looks like. Less than 2% — 1.8% to be precise — of financial planners are Black. Pockets of the industry say they’re making progress: In 2020, Merrill Lynch released?data ?showing that the proportion of Black advisors doubled to 4.5%, or?780 ?out of 17,500 total advisors, up from 2.5%. Hispanic or Latino advisers grew that year to 9% from 6%, and female advisors rose to 21% from 18%. But the Wall Street bank, whose president of Merrill Wealth Management, Andy Sieg, recently received an honor from the Association of African American Financial Advisors, hasn’t released numbers for the past two years.

Read more: Merrill wealth head wins AAAA award for advancing Black advisors

The CFP Board's Center for Financial Planning has exhorted industry firms?to disclose more metrics ?about their workforce composition to see if there’s progress in hiring diverse professionals to serve a diverse population. Meanwhile, FINRA’s recent Virtual Diversity Leadership featured discussion of an experiment with companies' real job postings that randomly varied whether the firms included a "values-driven diversity statement" or included explicit figures for the percentage of women and minorities in their workforce. The experiment found that laying out the hard numbers, as opposed to making narrative pledges about diversity, significantly increased the readiness of women and racial minorities to apply, especially among highly educated members of those groups.

Read more: Going beyond virtue signaling to boost diversity in wealth management

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