An American study has found minority communities want minority financial advisers, but there is no research to show whether the same goes for Australian communities.
An overwhelming majority of Hispanic and African-Americans say financial services firms need to hire more diverse staff, according to a survey conducted on behalf of large financial planning firm Edward Jones.
About two-thirds of the 2046 people polled, and more than three-quarters of Hispanic and African-Americans respondents, said that a firm’s advisers should more closely resemble their client base. Despite the need to recruit more diverse staffs, minorities have long been underrepresented in the profession.
According to the US Census Bureau, minorities represent 37% of the country's population, but data from the Securities Industry and Financial Markets Association shows they hold only 8% of positions in the financial services industry.
When asked what the financial services industry could do to narrow this gap, close to half of African American and Hispanic respondents suggest creating multicultural support and mentoring groups within the organisation.
Association of Financial Advisers CEO Brad Fox told Wealth Professional
he is not aware of any research in Australia on the topic, but that AFA is in favour of having more diversity in the adviser pool.
“When we have a diverse group [of advisers] we can reach more people, and get through cultural and language difficulties.
“Being a good adviser is all about the quality of interpersonal relationships. Clients want to know: ‘How well does my adviser understand me?’ The more diverse group of advisers we bring in, the more likely more Australians will get quality financial advice.”
Despite AFA not actively drumming up interest in a more diverse adviser base, Fox said he has personally noticed a more multi-cultural group coming out of university to become advisers lately.
The association has also held discussions with the government about how to help indigenous communities better access financial advice.
“Many of these communities are living in remote places – English may not be their first language and they may not have access to email. They statistically have lower life expectancy and more health problems,” Fox said.
“How would they know about superannuation, insurance, how to make claims and access medical reports? They may not know about their benefits and rights.”
AFA “remains open” to the idea of raising awareness for more culturally diverse group of advisers should there be a demand for it, he said.