Approaching Diversity in financial planning

How can hockey help approach diversity in the financial planning industry? Wayne Gretzky once summed it up in a quote:

“I skate to where the puck is going to be, not where it has been.” 1

As the United States’ population becomes more diverse, financial advisors should be looking towards the future and positioning their practice and client book “to where the puck is going to be.”

By 2065, the immigrant population is projected to reach 78 million, up from 45 million today.2 With this comes great opportunity for financial advisors, which can be seen in two ways:

  • increased need for quality financial planning as average household income increases

  • more diverse workforce with the increased rate of pursuit of higher education.

A look at recent statistics shows that between 2004-2014, the percent of African-American households with incomes over $75,000 increased by 50%.3 With a rise in investable assets comes the need for quality financial planning. A similar need is seen among Asian-Americans, among whom it was found that one in three own stocks, but fewer than one in five work with a financial advisor.4 As result, you are in a unique position to close this gap and build relationships among the growing cohort of wealth owners and those actively investing without professional advice.

As you look to build relationships with more diverse clients, diversifying your staff can also help position your practice for success. A poll of recent high school grads found that young African-Americans are more likely to pursue higher education than young whites.3 Similarly, a higher percentage of black women and Asian women enrolled in college in 2014 than white women.3 As diversity grows among the college educated population, a workforce is created offering more diverse candidates to help expand your practice.

Now that you know the opportunity set, you may be wondering, how exactly do I capture this? The answer lies within your community. You can consider:

  • hosting educational programs around financial literacy or college planning

  • tailoring products and services to the demography in your community: for example, international considerations.

As you look to grow, it’s about moving to “where the puck is going to be” — equipping your practice to embrace the change in demography and leveraging the opportunity to guide this growing cohort to a more secure financial future.

1Macleans, 2014.

2Pew Research Center, 2015.

3U.S. Census Bureau, 2014 American Community Survey: African-Americas 25+.

4The Asian American Financial Experience, 2016, Prudential.

The information provided is not intended to be a forecast or guarantee of future events or results.

All third-party marks are property of their respective owners.

The views expressed are those of the author and do not necessarily reflect those of Macquarie Investment Management (MIM), or any of its employees.

For educational purposes and for investment professional use only. Not for use with the general public.

© 2018 Macquarie Management Holdings, Inc.

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