An international study has shown that the advice sector still has significant progress to make when it comes to diversity, as staff feel their firm’s policies don’t do enough while diverse candidates suffer from a lack of role models.
Research from US-based consulting firm Cerulli Associates revealed that while advice firms were aware of a lack of diversity in the workplace and taking action to correct it, the majority of staff did not feel diversity initiatives were having much impact.
Around 63 per cent of US advisers felt their business’ leadership was trying to increase workplace diversity, but only 41 per cent said they thought their firm’s diversity policy was working.
At the same time, among advisers that were women or people of colour, most felt there were few leaders they could aspire to and seek assistance from to rise up in the workplace. Around 82 per cent of advisers of colour felt the limited visibility of people of colour in leadership roles in their firm was a challenge, while 78 per cent of female advisers felt the same about lack of visible female leaders.
“It’s critical that women and advisers of colour have leaders who can not only relate to their circumstances, but more importantly, use their influence and authority to champion their needs,” Cerulli senior analyst Marina Shtyrkov said.
The research found that about 18 per cent of advisers in the US were currently women – similar to recent FPA statistics that around 20 per cent of Australian advisers are female. This was an increase from 15 per cent in 2015, Cerulli noted.
However, people of colour were less represented in the industry, with 2.9 per cent of US advisers identifying as black or African American, 5 per cent as Latino and 4 per cent as Asian.
Factors such as not knowing enough about the industry or being afraid to fail industry exams were potential barriers to entry among women and POC new industry entrants in the US, where advisers must sit for a number of exams depending on the level of advice licence they wish to hold.
About 50 per cent of diverse candidates said not knowing enough about the industry was a deterrent to becoming an adviser, while 58 per cent said the high failure rate for industry qualifications was a barrier.
“The potential pitfalls for new advisors in the preliminary stages of their career can be daunting for promising candidates and ultimately prevents training programs from preparing a more diverse class of new advisers,” Ms Shtyrkov said.
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