Despite the political furor and the threat of companies rejecting diversity, equity and inclusion initiatives, some financial services firms are choosing to stay the course.
Angela Harrell, head of diversity and corporate impact at Voya Financial, said many of the companies that committed to DEI-related measures after the killing of George Floyd in 2020 are pulling back.
But she urged wealth management firms to double down, speaking at a DEI-focused symposium held last week in conjunction with the 2024 WealthManagement.com Industry Awards in New York City.
While some companies have withdrawn from DEI, Harrell said there are many more who have continued with these initiatives.
DEI's policies and terminology have long been the subject of criticism, with former President Donald Trump and Elon Musk among conservatives condemning DEI.
According to CNNseveral major brands, including Lowe's, Ford and Molson Coors, recently scaled back DEI-related initiatives. In a Bloomberg editorial last year, a writer asked whether DEI initiatives are “luxury goods in a corporate world that is no longer fully convinced they provide value.”
According to George Nichols, president and CEO of the American College of Financial Services, the newest effort to rename or replace the DEI championed by Musk and others in the tech space is merit, excellence and intelligence, or “MEI.”
However, Nichols said he had spoken to CEOs who said their challenge was managing the “message of the narrative.” That said, they are not changing course in trying to make the industry more diverse. According to the American College of Census data estimate, as of 2021, 69% of financial advisors were male and 80% were white.
“When people ask, I say, 'call it whatever makes you happy; I'm staying where this is,' Nichols said during the panel discussion.
Nichols said the industry was also missing out on white males, pointing to what he said were “terrible” retention numbers in the space.
“Just think, if all we recruited were white males, we failed them,” Nichols said. “So why would you think if we bring women and people of color who have less exposure and less awareness into that system that we're going to be successful?”
Instead, Nichols argued that the grim attrition statistics showed that the industry needs to “rethink the system” that is bringing in new advisers if they are to be successful.
Since joining Janney Montgomery Scott about two years ago, Erika Whyte, a vice president and director of the firm's DEI, said she hasn't been tasked with “softening” the language about the firm's diversity commitments. She said the firm's president and executive team were “anchored” in the message and knew how to address advisers who disagreed with it.
“People will try to poke holes in it; you can try, and believe me, they have,” she said. “But we have nothing to change.”
Whyte also said that responding to critics, even when they use offensive personal and professional language, was essential to make them understand that those messages “won't go down the drain”.
“What I'm not going to do is let the bully nest go unchecked,” she said.
Whyte's approach is to accept the message. And she also offers to meet the person so they can respectfully continue the conversation face-to-face.
“I haven't been taken up once in my two years on that offer,” she said.