Advisory firms must make the choice to cultivate cultures that nurture diversity, equity, inclusion and belonging, and implement structures and systems to hold each other accountable, writes Lazetta Rainey Braxton.
My father taught me that life reflects a collection of decisions; choose wisely. His relentless sharing and demonstration of family values supported his conviction that I was equipped to choose all things good and right.
Any shortfalls in my decision-making would be counted as growth opportunities with the clear notion that I would tenaciously navigate the consequences and avoid repeating mishaps. He instilled in me that self-awareness, self-reflection and owning my decisions were critical aspects of doing the work and living in a way that honors the greater good.
It should be no surprise that I view wealth management firms with the same lens. Institutions, wealth management firms included, reflect a compilation of choices and decisions, as well, driven by the institution’s values and executed by the leaders. Actions and outcomes serve as supporting evidence of the institution’s stance and brand.
One crucial, and often missing, element for wealth management firms is introspection. Taking an inside look and addressing the good and the ugly requires intentionality, structure and accountability. It requires doing the work.
The Great Reckoning of 2020
There comes a point in the journey where the lack of introspection and avoidance in doing the work rears its ugly head. The prolonged, public viewing of George Floyd’s tragic demise serves as a painfully, instructive example. His murder clearly revealed the broken systems and structures that permitted people with questionable values to execute questionable agendas.
At that very moment, no person or institution, not even financial advisors or wealth management firms, could escape the glaring fact that some lives are valued more than others, issues of race and human value still prevail, and misused power leads to destruction and physical and economic death.
2020 was the year of the great reckoning.
Burdened with deep anguish and fatigue, many Black financial advisors, including me, wonder what choices will wealth management firms make with this newfound awareness, when dealing with the unvarnished truth of the neglect and disregard of Black financial advisors and communities of color? What decisions will wealth management make that advance individuals, households, workplaces and communities?
These two questions stems out of my own experience. My journey to aligning my life's work with the #DoingTheWork movement began when one of my former employers refused to align its own mission and values and became complicit in accepting a client's racist rhetoric. Despite my contributions, my expertise, my character, my value were marginalized. Their choice to minimize the harrowing situation and onboard the millionaire-dollar client while expecting continued outperformance in an unsafe and unwelcoming work environment was ludicrous.
Structural or Superficial Change
The 2020 Great Reckoning spurred targeted efforts of wealth management firms in acknowledging the wrongs of corporate cultures: the hiring hierarchies, misinformed management, and stunted social and economic progress. Internal interest and engagement regarding diversity, equity, inclusion and belonging (DEIB) took center stage with firms hiring chief diversity officers (CDOs) and DEIB consultants for guidance, direction and implementation. New allyships formed and the quest for implementing DEIB programs catapulted.
Yet, Black financial advisors remain skeptical, wondering if the commitments to change will be superficial or structural? The answer resides in the hands of the power brokers, who institute values, own choices, direct actions and enforce accountability.
Diverse Teams Are the Future
Doing the work demands a DEIB mindset: acknowledging, recognizing and elevating an individual's humanity and contributions for the collective good of all. There is no shortage of research on this body of work.
Consider, that diverse teams:
Solve problems faster (HBR)
Enjoy significantly higher earnings and ROE (McKinsey)
Have higher employee engagement (Deloitte)
So, why do wealth management firms continue to stifle these fundamental social, economic and business imperatives?
Unleashing the value of human capital benefits all parties––the team member, the firm, the clients, the economy and society at large––and expands the distribution of social capital and financial capital.
Doing the work is not easy, but necessary. It starts with a willingness to acknowledge, listen, engage and act.
With diversity, having representation matters. Is the new American mosaic represented in your office and with your clients? If not, begin to calibrate.
With inclusion, consider if your firm is creating space for diverse voices to germinate and grow.
With equity, these diverse contributors who are included in decision-making are rewarded equitably for their contributions.
With belonging, the work results in a harmonious environment that honors, empowers and values diverse voices for the greater good of all.
Just as the world watched the demise of George Floyd and countless other casualties, the world is watching how wealth management firms will systematize DEIB in their organizations for robust engagement among the people and communities they serve. The horrific accounts are etched in the minds of those who cannot unsee what has been seen and undo what has been done.
What remains in the control of wealth management firms is the choice to cultivate cultures that nurture diversity, equity, inclusion and belonging and the decision to implement structures and systems to hold each other accountable for sustainable DEIB actions. Let’s not wait until the protests quell and for the pandemic to be behind us. Let’s take a deeper dive in doing the work now and for the sake of the future.
Lazetta Rainey Braxton the founder/CEO of Lazetta & Associates and co-CEO at 2050 Wealth Partners.
This article also appears on WealthManagement.com.