While Hispanic and African American adults say it’s in the best interest of financial advisory firms to hire more minority advisors, they are less concerned that their own personal advisor be the same ethnicity or race, according to a new survey by Edward Jones.
The survey of 2,046 U.S. adults, conducted by Harris Interactive on behalf of Edward Jones, found that only 8 percent of Hispanic respondents and 12 percent of African American respondents said it was important for their advisor to be the same race/ethnicity in order to build trust. (See chart, below.) When asked if it was important that their advisor understand their culture, only about one-third (31 percent of Hispanics and 36 percent of African Americans) said it was.
Jesse Abercrombie, an Edward Jones financial advisor in the Dallas-Fort Worth area, said his practice reflects the survey's findings.
“I’m an African American FA, and I don’t have any African American clients at all,” Abercrombie said.
But Abercrombie believes that minority clients would like to know that there are people at the firm that come from a similar background.
“So it doesn’t mean that if I have a new client that’s Hispanic that I really need to know the Hispanic heritage, but I think a Hispanic client would be appreciative of knowing that Edward Jones does go out and make inclusive efforts on behalf of Hispanics.”
In the survey, 79 percent of Hispanic and African American respondents said it is in the best interest of the firms to focus on hiring minority advisors to better reflect their overall client base and the population at large. Seventy-three percent of Hispanics and 79 percent of African Americans believe it’s in the best interest of clients to have a more diverse advisor force.
“If you look at China and India, there’s a vast majority of people that are moving from one class to the next class, and that’s happening here in the United States as it relates to minorities as well,” Abercrombie said. “People are investing more; they’re wanting to save more, and they’re wanting to get more involved with financial planning outside of just a general savings account.
“Because of that, there should be more minority representation and diversity in financial services firms.”
Yet minorities make up only 8 percent of the industry, according to a 2007 SIFMA report, compared to 37 percent of the overall U.S. population.
“Every firm out there has growth as one of their number one objectives outside of helping the clients, but within that growth, they do all feel that inclusion—hiring minorities and females—is very important,” Abercrombie said.
“But I think the reason those numbers are still low is that’s where it ends. It ends on the recruiting, and after someone’s an FA with the firm, there may not be as much support and development going on to keep those people around.”