Firm’s Chief Diversity and Inclusion Officer Says Invest in Women, Break Down Barriers and Broaden Your Definition of Diversity
Diversity and inclusion concerns occupy top of mind for America as a whole and the wealth management industry in Women’s History Month.
Though our industry has progressed on the representation and treatment of women at all levels, this shift is a work in progress where true balance and inclusion has eluded us. As we continue searching for answers, organizations with significant achievement towards diversity and inclusion can show us solutions.
Industry leader Commonwealth Financial Network, serving 2,077 advisors with almost $273 billion in account assets and a trophy case full of J.D. Power awards, needs no introduction. But beyond these achievements, Commonwealth’s redoubled efforts towards diversity, equity and inclusion (DEI) initiatives yielded equally impressive results.
In the past 18 months, Commonwealth attained an almost 17% increase in women in leadership roles, a 23% increase in racial diversity in leadership and an internship program that rocketed from almost 17% racial diversity in 2020 to 40% in 2021.
How did Commonwealth achieve this remarkable success in such a short time frame? They hired their first Chief Diversity and Inclusion Officer, Scarlett Abraham Clarke, and embarked on a mission to actively generate results including initiatives such as women’s advisor mentoring programs, accessible resource materials, employee resource groups and revised hiring strategies.
We spent time with Clarke to hear about the current state of women’s DEI issues in the financial services industry and the steps she has taken to usher in rapid, positive change at Commonwealth.
WSR: Tell us how you decided to focus your career on diversity and inclusion, including any pivotal experiences or influences that led you in this direction.
Clarke: I like to say that I was born for this – I was the child who spoke up when things felt unfair and stood up for those who could not. As I got older, I gravitated to roles that put people first.
After experiencing bias that personally impacted me, I knew I never wanted to feel those feelings again – and I didn’t want anyone to feel that. I joined my previous company, Bright Horizons, because of the work they were doing on inclusion.
Like many DEI professionals, I made sure that I had a lens for equity in everything I did, and I would regularly challenge my colleagues to have tough conversations.
While working alongside many great leaders, I was promoted to lead their function for DEI for three years. Then, I joined Commonwealth and saw how serious they were about diversity and inclusion.
Commonwealth started to focus on DEI about two years ago, but they’d never had a dedicated function or resource. They needed someone at a VP level to make a meaningful impact. This commitment was a huge selling point, and the events of 2020 reinforced my decision.
Commonwealth was very vocal about their feelings around the social and racial unrest, and these events confirmed to them that this was the necessary path forward.
WSR: As you know, it’s Women’s History Month. What is the current state of DEI for women in the financial industry? What advice on DEI issues would you give to a woman considering a career in the wealth management industry?
Clarke: Women are an increasingly important demographic for the financial services industry. They compose 51% of the U.S. population, outnumber men in graduating from college and represent the majority of the workforce. Women also have increased buying power and make most consumer purchasing decisions for their families.
Additionally, the economic challenges during the pandemic have highlighted the importance of competent, ethical financial planning. Despite all this, only 23% of CFPs are women. Although a career in this industry offers a lot of flexibility that can benefit women, recruitment has been a challenge.
Gender diversity and inclusion in the financial planning profession is very good for business. It’s important to support women in the community, so they can secure wealth and make smart financial decisions.
Women recognize the need for financial advice and the benefits of working with a CFP professional. This need will go unmet unless the population of CFP professionals reflects the demographics of the public they serve.
WSR: It’s clear that the wealth management industry has not reached an ideal state of diversity and inclusion. What can we do differently to move towards those goals? Are there any initiatives you’ve implemented at Commonwealth that show particular promise?
Clarke: We are implementing several initiatives at Commonwealth for our internal workforce as well as our advisors.
We are investing in women and building an infrastructure that helps these advisors succeed. Our Summit for Women Advisors supports the career development for this group of financial professionals, and we are seizing opportunities to amplify the voices of the women of Commonwealth through our newly established Women Advisory Council.
Internally, our Women’s Leadership Network supports the inclusion and professional development of the women on our staff and provides thoughtful content for discussions and events.
We are also breaking down barriers. It’s crucial to create an equitable work environment where people feel like they have a seat and a voice at the table. To do that, there are systemic barriers we need to break down. Further complicating things, we need to do it through the lens of Covid-19 and displaced racism, both of which are sobering reminders of ongoing disparities that have widened the gap for women and people of color.
At Commonwealth, we have developed a comprehensive DEI programing schedule consisting of dialogues around race, gender identity and mental health. Our annual DEI survey allows our staff to openly share their belonging experience at Commonwealth, so we can improve where necessary.
We are broadening our definition of diversity hiring. Gender and race are significant aspects of diversity hiring, but it’s important to approach the process through a holistic lens. We are intentionally partnering with recruiting resources and focusing on underrepresented communities.
Additionally, we have added optional demographic questions on our applications to ensure that we are attracting all diversity and that those candidates are turning into hires.
Michael Madden, Contributing Editor & Research Analyst at Wealth Solutions Report, can be reached at firstname.lastname@example.org