Maybe the atrocious levels of diversity among wealth managers aren’t due to failures to recruit and promote women and minority advisors, or the systemic disadvantages they face—maybe it’s all in our heads.
According to a recent study by Chicago-based Spectrem Group, a preference for older, white and male advisors might be hardwired into the brains of the affluent.
In a white paper titled “Snap Judgments: Do First Visual Impressions Impact Financial Advisor Selection?” the consulting firm showed respondents a photo of eight advisors—four women and four men of varying ages and races—and asked them to choose whom they would be most likely to hire based on appearance.
An older white male advisor was selected by a plurality of respondents across wealth and age cohorts and genders, with around one in three of Spectrem’s respondents selecting the oldest white man in the picture. The same advisor was chosen by 40 percent of ultra-high-net-worth respondents with more than $5 million in investable assets.
In a Wednesday conference call, Spectrem Group president George Walper said the results show that investor perception presents a barrier to diversifying the industry.
“This industry is trying to recruit younger, minority and female advisors,” Walper said. “If a young minority advisor thinking about this as a career saw these numbers, they would be frustrated.”
Cathy McBreen, managing director at Spectrem Group, said on Wednesday that the results are not necessarily representative of general investor sentiment.
“We do acknowledge that our sample, because we look at high-net-worth investors, tends to be older,” McBreen said. “High-net-worth investors are also skewed more towards white, Caucasian people, because that’s reflective of what the overall wealth market is.”
A middle-aged white male advisor was the second most popular overall selection, chosen by approximately 25 percent of the respondents. A young white woman and a middle-aged white woman were the third and fourth most popular selections; each was chosen by just over 10 percent of the respondents.
A younger white male, a middle-aged minority male and a younger minority female were each chosen by fewer than 5 percent of the respondents.