If you are not engaging with diverse communities, you are leaving money on the table, according to a panel of financial professionals at Financial Advisor’s 2024 Invest In Women conference in West Palm Beach, Fla.

“Whether it’s diversity of thought, whether it’s diversity of business, or whether it’s diversity of communities, it is great for business,” Clara Sierra, senior director at Moody Analytics, said during a panel discussion. “And I just want to remind everyone that demographics are changing, and purchase power is changing in these diverse communities.”

Sierra, one of three speakers on a panel titled “Addressing Diversity: Opportunities and Challenges Within the Wealth Management Industry,” called on advisors to get out of their comfort zones and connect with people of color.

“No knock on golfers, regardless of what gender you are, but so much business gets done on the golf course because they are networking with each other, talking about what matters, and they are growing the business for each other,” she said. “But network with everyone at this conference, learn from each other to sharpen your saw to get more business and to evolve your practice on where you want to see it in the next five to seven years.”

Sierra, an Afro-Latina of Dominican heritage who has been in the industry for more than 25 years, said she wonders where her career would have taken her had there been other people of color in the industry at the time who could have mentored her. She implored the group to seek out mentees. “You learn so much about yourself and your craft and you stay relevant and fresh when you have mentees,” she said. “Sponsors, mentors, mentees and allies, they are all important.”

Shevawn Adams, senior manager for business enablement at RBC Wealth Management, said it’s especially important for firms to cast a wider net when hiring. “This is a generational business, and so for people of color specifically, financial services is not a career that we say we want to get into because there is hardly any representation. So, if you don’t see it, you don’t know about it,” she said.

Sierra added that the most successful advisors she has seen are the ones who work with their local colleges and universities. “Schedule a coffee chat with the dean of the business school or dean of marketing and create a program of summer interns,” she said. “It gets you in the college ecosystem, and you get great, innovative young talent to come work in your offices for the summer.”

RBC, Adams said, is launching a pilot program that involves a few of its branches in various states that will source interns from historically black colleges and universities (HBCU). “These field leaders have made a commitment to not only host those interns but to introduce them within their network in the industry,” she said.

Adams said partnering with recruiters and field leaders is a change from the traditional hiring approach, which has not been the most inclusive. “On one hand, you say the industry lacks diversity, yet we are still asking for 10 years of experience for this and five years of experience for that … you are really drawing from a very narrow pool,” she said.

RBC’s program is just one of the many efforts by major firms and others to address diversity in the industry, said moderator Suzanne Siracuse, founder and CEO of Suzanne Siracuse Consulting. She suggested that advisors should approach their recruiting efforts by asking what’s in it for the industry, rather than “what’s in it for me.”

Siracuse highlighted two programs for advisors that are actively recruiting: One is the BLX Internship Program, a program for aspiring Black, African-American and Latinx financial planners that has 300 openings and has placed almost 100 candidates. “There is a disconnect because we keep saying we can’t source talent and I can’t find diverse talent,” she said, noting that this program works with an assessment firm that screens candidates based on what a firm is looking for. “They are doing all the heavy lifting.”

The other program, an eight-week online training session called the Externship, was launched during the pandemic and trains students and career changers who want to be financial advisors. Siracuse said 800 people had signed up, of which 400 had completed the training. Half the training pool consisted of women, 10% were Black and African-Americans, 9% were Latinx and 9% were Asians. “Do the math. That’s the future of the business,” Siracuse said.

Emma Rodriguez-Ayala, chief administrative officer and general counsel at Ariel Investments, the first Black mutual fund company in the U.S., said that it is key for advisors to educate themselves on demographics and learn each group’s investment goals “because when meeting with these people, you need to understand how they want to invest and how they are thinking about their long-term resources.”

Also key for advisors is to build a diverse network, Rodriguez-Ayala said. “You might not have a team that is diverse based on where you are or for whatever reason, but in your roles with clients, you are often introducing them to lawyers and to other vendors who are diverse. At Ariel, we call that business diversity,” she said. “You can build a diverse network that you can open to your clients who might not be diverse but care about diversity,” she said.

Ariel, she said, prides itself on the depth of its network. “People come to us all the time and ask if we know a Black person or Latina or Asian person that can be on a board,” she said. “We are only about 150 employees, but the mark that we leave in all of corporate America is because of the depth of our network.”