During the same three-year time period, blacks and Latinos have experienced a 0.2% increase as advisors. “It’s too soon to tell if the trend is going to continue, but we’re doing everything we can through the center and to catalyze the industry,” she added.
The main takeaway from the summit is that the time to go from talk to action is now if the industry hopes to increase diversification. “What’s working is expanded metric goals. Diversity and inclusion programs in firms are, broadly speaking, not likely to succeed without commitment and resources from the top down, even when it might conflict with other business imperatives,” Mohrman-Gillis said.
Case in point, she said, is Chase Wealth Management, which has “very aggressive goals for increasing representation in their advisory workforce, even to the point where hiring managers are being asked to hold positions open longer than they’d like to in order to build a diverse slate, even when managers say: ‘I don’t have a person of color to hire and this is hurting my bottom line.’”
It’s these kinds of commitments that are needed to drive better outcomes, Mohrman-Gillis said.
“Diversification has to be a strategic priority and part of a firm’s DNA,” she added.
One problem is that many business leaders assume diversity initiatives will disrupt the existing work environment, the board’s study said. However, an analysis of findings over the past five years suggests that diversity “tension” is not a detriment, but actually a key advantage that can be used as a creative force for change and quality decision making.
Research also shows that more diversity means stronger financial performance.
The mean revenues of organizations with low levels of racial diversity are roughly $51.9 million, compared with $383.8 million for those with medium levels and $761.3 million for those with high levels of diversity.
The same pattern holds true for sales revenue by gender diversity: The mean revenues of organizations with low levels of gender diversity are roughly $45.2 million, compared with $299.4 million for those with medium levels and $644.3 million for those with high levels of diversity, according to research in the American Sociological Review.
The study, which included robust statistical analysis of more than 1,000 for-profit U.S. firms, showed that gender and racial/ethnic diversity is correlated with three key measures of business performance: a company’s number of customers, its market share and its profitability—even when other factors are taken into account.