Britain has a serious shortage of black financial advisers. It always has done. As ROBIN POWELL explains, the time for excuses is over. The advice profession needs to address the issue as a matter of urgency.
October is Black History Month. It’s a chance to celebrate Afro-Caribbean culture, but also to reflect on the racial inequality and discrimination that still exist in our society today.
Sadly, the financial services industry is one part of modern Britain where ethnic diversity, or rather the lack of it, remains a big problem.
Take the City of London, for example. London is the most ethnically diverse city in the world, and yet young back people, women in particular, are deterred from applying to work in the Square Mile. Those who do often find their talents overlooked.
Interviewers change demeanour
A study in 2018 found that most black applicants had experienced barriers to employment in the sector. 38% of applicants surveyed said that interviewers’ demeanours would change when they saw that they were black. Almost a third of them cited racial discrimination as the main reason why so few black people are working in financial roles.
With so few of them entering financial services, it should come as no surprise that black people occupy only a tiny proportion of senior posts. The Financial Conduct Authority, for example, set a target in 2016 of having 8% of its senior employees identifying as black, Asian or other ethnic minority by 2020, and 13% by 2025. But, over the following 12 months, the actual percentage fell, from 3% to 2%.
Financial advice has a particular problem
The financial advice profession scores especially poorly for ethnic diversity. We have seen no official figures, but the proportion of fully independent (whole-of-market and not restricted) black financial advisers is extremely small. Black female fully independent financial advisers are almost non-existent.
What’s more, those who do make it into the profession are more likely to work for banks, restricted advice firms or investment banks than for independent financial adviser (IFA) firms. Consequently, black people who seek advice are more likely than the rest of the population to rely on their bank or building society, which often charge higher fees, recommend more expensive products or active investments which typically underperform the market .
Here at RockWealth, we take this issue very seriously. Our view is that racial injustice is everyone’s problem. Black people deserve the same access to high quality financial advice as anyone else, and for that to happen, we need to encourage more young black people to enter the profession.
Last year, Steven Williams, the founder of RockWealth Brighton, Ltd became our first black financial planner, and we hope the first of many.
Steven has experienced unconscious bias and occasionally outright racism during his career in financial services. Like many, Steven began work in this sector within the big banks. He also recognises that having a Jamaican father, and a white mother, it was slightly easier for him to gain acceptance than it had been for his dad. This has made Steven keen to help others to successfully overcome the barriers to ensure more people of colour attain positions of influence.
Hard to find an adviser of colour
One of Steven’s main concerns is that the lack of ethnic diversity in the advice profession means that black people are put off seeking financial advice. Those who aren’t often will by default end up with restricted and non-independent advice.
“If you are a successful person of colour, it is likely you will be advised by a bank, not an independent adviser,” he says. “It’s hard to find a person of colour because there are so few. This is not a black problem. It is a black issue, but it is a white problem. It is up to the white majority to change and allow the enormous benefits of diversity to grow. We are keeping the gate closed, sometimes through ignorance.”
Mentoring helps to move the dial
As well as raising this issue, Steven is also determined to do something about it. He voluntarily offers regular mentoring to three young black advisers. All are male, but he is keen to mentor a black female adviser as well.
“Mentoring is a really good way to move the dial on diversity,” says Steven. “I want to help aspiring black IFAs to break through the glass ceiling, to gain promotion, to stay in advice businesses and take senior positions within them.
“When firms like RockWealth recruit staff in the years ahead, I want us to have a large pool of talented black financial advisers to choose from.”
Meanwhile, Steven is challenging other firms to follow RockWealth’s lead and review their recruitment process to ensure that minorities of all kinds are better represented in the advice profession.
We need to accept culpability
“We need to change our ways,” he says, “and that has to start with accepting that we’ve been culpable in this regard until now.
“It’s not just the shortage of black financial advisers we need to address. We have to recognise all of the different cultural biases that exist and take active steps to counter them. We should consider rejecting white-only or male-only shortlists for interview. We also have to confront our unconscious bias against applicants with disabilities, non-binary gender and different orientations.
“In the end, universal acceptance is not a sacrifice, but the very opposite. It’s in all our interests. Business benefits. We all benefit. And it makes the world is a better place.”
ASPIRING BLACK FEMALE ADVISER?
If you’re an ambitious, independent, black and female adviser, Steven would like to hear from you. You can get in touch via the Contact page.
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