Wells Fargo’s CEO makes me wonder: Which other leaders in the financial services quietly share his views?
In a company memo this past summer, Wells’ Chief Executive Charlie Scharf blamed his company’s lack of diversity on “a very limited pool of Black talent to recruit from.” The day after it became public this month, Scharf apologized, calling it an example of “my own unconscious bias.”
To begin with, the suggestion that there aren’t enough Black people to hire them for roles up to the C-suite isn’t borne out by data. In 2018, there were nearly 175,000 Black professionals, middle managers, senior officials and executives in finance and insurance, according to the U.S. Equal Employment Opportunity Commission. The size doesn’t sound “very limited” to me.
With oblivious and insensitive comments like these, you would think that Black financial professionals would be leery of financial services. Yet, we continue to “take one for the team” and show up with commitment and drive to advance the profession even with the high probability of being mistreated by the very profession that continues to erase our contributions at the same time.
Leaders in positions like Scharf’s would do well to keep that in mind, along with recognizing that forms of racial discrimination hurt their businesses and the U.S. economy. If we as a country could have closed the gaps among Black and white people in wages, education, housing and investment capital in 2000, it would have added $16 trillion to our gross domestic product, according to a study by Citigroup.
His comments perpetuate a longstanding trope that the difficulty in diversifying the talent pool has little to do with the will of the firm to expand its reach and cultural competency. It’s a multi-century old playbook that devalues Black contributions and masks the underlying bias against Black Americans. History repeats itself.
Can it be dismissed as a forgivable act of unconscious bias? Or should it serve as a moment of truth, reflection and action by those who have the power to change an industry that has stifled opportunity for others for too many years?
So what’s holding back these white leaders and their firms from taking action and #DoingTheWork?
Any investment requires an understanding of the nature of the investment, its risks and rewards, and likelihood of success. Racial bias and a lack of cultural competency reflect how hiring managers deviate from this very fundamental tenet of investing. If you don’t do your research, validate your assumptions and understand the market, you will never recognize the opportunity.
In overcoming oppression and systemic barriers, Black excellence isn’t limited to a few “rock stars.”
Blacks have been trained over centuries to overperform and overachieve, even when confronted by institutional racism, denial of opportunity for promotion, and unconscious bias about the true skill set of people who don’t look like those in the C-Suite.
While degrees and certifications are baseline requirements for most roles in financial services, we consistently see qualified racial minorities with equal or greater qualifications and experience get overlooked for higher pay and new positions.
If progress is your firm’s goal, embed the eradication of racial bias in your firm’s strategic planning, operations and HR practices. You will reap the benefit of financial progress that’s rooted in intentionally seeking and supporting Black talent and staying relevant in an increasingly diverse environment.
With my work as chair of the Association of African American Financial Advisors(AAAA), President of AAAA Foundation and co-CEO of 2050 Wealth Partners, it has become clear that while major firms have Diversity and Inclusion leaders and initiatives, they continue to lag on making major advances with attracting, supporting, and advancing Black talent. It’s time for all of us to come a table led by culturally-aware and culturally-competent business leaders and show solidarity with making the financial services an attractive profession for advisors and the clients we serve. As AAAA’s and AAAA Foundation’s Founder LeCount Davis, Sr. often says, “We’ve done the work. Put us in coach, we’re ready to play.”
This article written by Lazetta Rainey Braxton, MBA, CFP® originally appeared in Financial Planning.