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5 Things About Incorporating DEI in RIA Firms with Daria Victorov and John Eing

Daria Victorov, CFP®, and John Eing, CPA, CFP®, of Abacus Wealth Partners have been avid listeners of the 2050 TrailBlazers podcast from the beginning. As a result, they teamed up to expand their diversity, equity and inclusion initiatives within their firm. 

Abacus Wealth Partners has made a lot of progress on building a diverse firm. Approximately 63 percent of their firm’s employees are women, which is well above the industry average, and 60 percent of their board members are women.

They were finding success with growing a diverse organization, but they also knew that there was work to be done to increase ethnic diversity. They decided to form a committee within Abacus focusing on growing their diversity initiatives. This committee develops strategies for next steps and evaluates how their DEI initiatives can help to boost business results. 

I recently sat down with Victorov and Eing on my podcast to discuss what actionable steps they’ve taken, what’s worked and what bumps in the road they’ve encountered that you can use to build an actionable blueprint to get started.

How did your diversity committee get started?

Victorov: We created “why” statements based on the book by Simon Sinek, Start with Why. Everyone knows what companies do. Some people know how they do it, but not everyone has a why. For us it was important to create that why statement—why are we interested in diversity and inclusion? Why are you here? Why do you want to make a difference? If John and I had different why statements compared to some other people that were on our committee, that wouldn’t really be helpful because we would all be coming at it from different angles. We have to work as a team with our committee. John and I are different ages. We’re in different locations, we’re different ethnicities and we also put a term limit on ourselves of two years because we want to make sure that we’re having diversity of thought with this committee. It’s also important to have diversity in the leadership.

What were some challenges you had in developing the diversity committee?

Eing: We realized without a strategic tie-in to a business purpose, we would quickly lose steam. So we said, what’s a tool that we could use to help us really hone and focus our mission? Similar to what we do with financial planning clients—you start with figuring out what’s important to them and then you create the financial plan—we took a similar approach. We read a book called Measure What Matters by John Doerr. This book talks about a framework called OKRs—objectives and key results. So, the whys we identified really gave us a vision but not direct objectives. An objective, for example, would be: we want to build the tallest building in the world. The key results would be: how do we do it? We have to find out what the tallest building in the world is. We have to find out how many floors it has, etc. We were able to take this framework to create concrete steps.

We’re large in the RIA space, but we’re not a huge company. We don’t have a dedicated chief diversity officer—we have people that have hobby jobs. Daria and I both serve on several committees, so we knew data was going to be important. And I mentioned our size—we found size being a challenge in that it was hard to fit demographic data to fit a particular office.

For example, I work out and in the San Fernando Valley in a smaller office; there’s four, maybe five of us out there. Well, it’s hard to match us to mirror the community we serve. The community is 60 percent Asian. I’m one of four people in the office, and I am the only Asian and it’s hard to go from 25 percent to 60 percent when there’s only four of you. But what we found was we were able to better mirror that if we took the whole firm together and we said, what does Abacus look like as a team, as a firm in total? How do we compare to the U.S. Census data? Because Philly looks very different than Santa Monica, which looks very different than San Mateo. But as a firm, we’re able to focus on the areas of opportunity for us and how we can get better.

What kind of programming did the diversity and inclusion committee offer?

Victorov: When we started the diversity and inclusion committee, we didn’t ask for money from our company. We really had to get creative about how we were going to connect with people and make sure that people were learning. John came up with a model where we have to entertain people, we have to educate people and we have to empower them. And everyone’s got to eat. So we just started with the idea of lunch and learns. We were having lunch and learns already for different topics at Abacus, and we wanted to pivot—instead of learning about estate planning or tax planning, maybe we’re learning about a different culture. Because of budget constraints, we looked to our own diverse colleagues. We all come from a different background and we all have different experiences and we ask people at our own company to start speaking. In September we asked George who’s our controller, so not in an adviser role, to speak on his experience in Brazil and a little bit about the differences between Hispanic and Latino heritage.

Your diversity committee used to be called something else. What was that?

Eing: So our tagline was “awakening our cultural consciousness.” The George example is so perfect because I’m Asian; I had no idea there is a real distinction between Hispanic and Latino. And something we learned was the three-factor model—entertain, educate and empower. We came up with that model because we said, look, we’re giving up an hour of our day; let’s make it fun—which is the entertaining part. Teach us about their culture and with George, it was really interesting because he grew up in Brazil and came here as an adult. He also shared with us what it’s like to be an immigrant in America and still be Brazilian and how Brazilian Americans adjust to that culture shift.

Then empower—it was like, okay, great. Now that we know about Brazilians and Brazilian Americans, what do we do with that information? That’s where these great diversity trainings get lost. How many times have you left the conference or training like, wow, that was awesome, and you’re all pumped up and you go back and you’re like, what do I do with it?

George gave us some specific takeaways about working with Brazilian people—very simple things. For instance, in Brazil, the concept of time is very different than how we look at it in America. In Brazil, people are late and they just expect it. But even though they show up late, they want you to be generous with your time. If you think about that from a cultural perspective, can you imagine someone who grew up in America, if you’re 15 minutes late for a meeting, they’re going to be incredibly perturbed. Yet this Brazilian person shows up [late] and they’re happy as can be.

Why is diversity of leadership on the committee so important?

Victorov: We’re a large RIA, we get together every two years as a company. John and I had an opportunity to speak in front of the company about what we’re doing for diversity and inclusion.

Right after our presentation someone came up to me—they were one of the few minorities we have in our company—and said, “I really enjoyed your presentation.” That was really refreshing to hear, because during the presentation they didn’t ask questions or say anything. I was at a conference later this year and someone asked what do we think about how the future of our profession is going to change? And I said, the face of our profession is going to be changing. We’re all going to be looking a lot different. Later in the evening, a couple of the minorities had come to me, they were like, “Thank you for saying that.”

I challenged them. “Why didn’t you say anything after I said that?” Because after I said it, there were crickets in the room. It was really heartbreaking, to be honest. I think the profession can look different and no one had anything to say. Someone changed the conversation to something else. That’s why I challenged them. I was like, why didn’t you carry on a conversation? Why didn’t you say anything? They didn’t really have an answer. I brought this story back to John because I thought, what is going on?

This is not something where we’re creating a committee and then all of the sudden our demographics of our new hires is going to change. It takes a lot of work. It’s something that’s going to take years.

Even though I’m co-lead of this committee, I feel really awkward sometimes. Talking about it feels very uncomfortable and you just have to power through and know that it’s important and that the awkwardness is worth it. 

Rianka Dorsainvil

Rianka R. Dorsainvil, CFP® professional, is the founder and president of Your Greatest Contribution (YGC), a virtual, fee-only comprehensive financial planning firm dedicated to serving entrepreneurs, first-generation wealth builders and thriving professionals in their late 20s, 30s and 40s. She also hosts 2050 TrailBlazers, a podcast aimed to address the lack of diversity in the financial planning profession by engaging industry experts and leaders in conversation.


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A Concise History of Diversity Programs at FPA and Looking to the Future

It was the FPA annual conference in Nashville in 2006. Lee Baker, CFP® professional, counted maybe 30 other African American attendees out of around 3,000.

In one intimate conference session, Baker, who said he was in a good—but flippant mood—said to the group: “My name is Lee. I’m from Georgia and from the looks of things I’m here to add a little color to the conversation.”

This sparked a few nervous chuckles. After the session, Ed Gjertsen, CFP® professional, walked over to him and the pair struck up a conversation about the lack of diversity at that conference and in the profession.

Signs depicting diverse people—Black, Asian, Latino—were posted up around the meeting space with the message, “We are FPA.”

The pair approached a then-staff member and told her that the signs represented where FPA aspires to be, but not where we are.

Gjertsen and Baker connected with Trudy Turner and formed what would in 2007 become the FPA Diversity Task Force in the hopes that one day it would become a permanent committee.

“Part of our thought process was, let’s make this part of our DNA and part of our infrastructure,” Baker said.

Later in 2007, the task force organized the inaugural invitation-only Diversity Summit pre-conference to the FPA Annual Conference.

In 2008, the task force established the Diversity Scholarship. The next year, it officially became the FPA Diversity Committee, chaired today by Charles Adi, CFP® professional, and later in 2009 created and adopted the FPA Diversity Statement.

Turner grew up in the FPA, she said, being a member before FPA was FPA (back before the merger). Turner recalled during her time at FPA Residency in Denver, the late Dick Wagner came up to her and asked, “Where are the rest of the people who look like you?”

“I so appreciated and have always appreciated that,” Turner said. “Dick was always so good at encouraging, supporting and challenging people to make this a better profession.”

It is people like Wagner and like Louis Barajas, EA, CFP® professional, who paved the way, Turner said.

Barajas said that he’d been talking about diversity since before his time on the FPA Board, which started in 2004.

“I started paying attention to the demographics and realized how fast we were growing and saw what the needs were,” Barajas said. “I felt like I was just talking and what I was saying was going in one ear and out the other.”

Turner heard him.

“I credit and stand on the shoulders of people in FPA who were beating the drum but weren’t getting anywhere,” Turner said. “I stand on the shoulders of Dick Wagner, I stand on the shoulders of Louis Barajas, who were talking about diversity, but it wasn’t going anywhere.”

Renewed Commitment to Diversity

In the past few years, the profession has seen a renewed interest in increasing diversity in the profession, an interest Turner said FPA has always had.

“FPA has very much been at the forefront,” when it comes to diversity and inclusion work, she said. This interest manifested in strategic partnerships with Quad-A and PridePlanners, which have both had pre-conference events to FPA’s Annual Conference.

So far in 2019, FPA launched the FPA Latino Knowledge Circle, a community for Latino financial planners to engage in professional development and networking, thanks to the help of Barajas. Along with partner CFP Board, FPA launched the Dick Wagner Scholarship. Lastly, FPA’s membership publication, the Journal of Financial Planning, had its first-ever diversity issue this month.

The early contributors to the Diversity Task Force and later Diversity Committee have said they are proud of the work FPA has done in this realm.

When Turner looks at what has come out of the diversity task force, it’s almost like she’s a proud mom, she said.

“I think the single best thing that we did was create the Diversity Scholarship,” Turner said. “When you see the talent that has come about—when you see Rianka [Dorsainvil], when you see Lazetta [Rainey Braxton], when you see Marguerita [Chang], those are diversity winners and they have come into the profession and started engaging.”

The scholarship, which includes one free conference admission, one-year membership dues, one-year chapter meeting fees, and support to thrive personally and professionally at FPA, has been awarded to 42 individuals.

Looking to the Future: What Can You Do?

The time of the frustrating “business case for diversity” conversation is gone. Now is the time for action. Oftentimes people ask, why care about diversity? For people of color, there is no choice but to care about it.

“When you’re born into things, you don’t have the luxury to sit back and go, ‘I wonder if that’s important?’” Turner said. “I am a person of color. I am a woman and it’s always been important for me.”

And it appears as though it’s becoming important to others and that people are listening.

“We’re talking honestly about [diversity] now,” said Saundra Davis, MSFP, APFC®, FBS®. “We’re not tip-toeing around it anymore, it’s not filtered conversation anymore.”

Also, Turner added, “People are listening.” However, the problem of genuine inclusion and implementation remain.

Focus on human resources.

Turner said this is the biggest area we should be focusing on. A strong human resources team can help retain talent. Good HR professionals versed in diversity can help foster a culture of genuine inclusion.

Ensure you are recruiting diverse candidates.

The excuse that you can’t find qualified candidates of color is outdated. They’re out there. And they’re highly qualified. You just have to know where to look, where to post your job descriptions and how to write those job descriptions to attract them.

Get comfortable with being uncomfortable.

People in the profession want to move the needle on diversity, Gjertsen said, but oftentimes they don’t want to say something offensive or be uncomfortable.

“That is one of the elements that is truly challenging for those not engaging,” Gjertsen said.

For Gjertsen, it wasn’t always the most comfortable thing to try to talk about diversity with people from underrepresented groups, however he got comfortable with being uncomfortable and his colleagues gave him grace, he said.

Listen to employees of marginalized communities.

If you don’t have the human resources in place, and an employee tells you about something, believe them and work to make their environment a safe space.

Work to fix the problem.

Doing exit interviews with diverse employees who leave your firm or company can help unearth some issues. Identify those and work to address them.

Advice for Planners

For planners from underrepresented groups, a few bits of advice stood out in our interviews:

Pause your movie.

Baker thought back to that conference in 2006. Though he said he never felt anybody treated him differently, there is still a truth as a person from a marginalized group any time you are in a space with thousands of people from the majority group: It’s lonely. There is a movie playing in your head about why people are not engaging with you, Baker said.

“You have to navigate that dynamic that says, ‘Am I being ignored because I’m Black or am I being ignored because they don’t care?’” Baker explained.

Represent. Another truth people from marginalized communities realize is that when they are at events, they aren’t just representing themselves, but also their groups. For instance, Baker said, recalling a conversation he had with Dick Wagner, if he were to have a few too many drinks at Annual Conference, it might lead to people judging his entire ethnic group.

“There’s a kind of pressure for me—not that it’s intentional—but if I screw something up, it is not Lee did this, it becomes they did this,” Baker said.

Make the most of your memberships. Baker said to take advantage of what’s available to you. Apply for the scholarships, join the webinars, attend local meetings and go to the conferences.

“It’s expensive to take days, hop on a plane, but it’s incredibly important to your future,” Baker said.

Find what Davis calls safe and sacred spaces to participate—whether that be Quad-A, PridePlanners or FPA Latino—and make them your own.

Don’t be afraid to make space if you can’t find it.

Davis said there are so many firm owners of diverse backgrounds because sometimes they can’t find their space in more established firms.

“People come in and they have high hopes,” Davis explained. “They’re welcomed at the beginning, but as soon as the microaggressions kick in, they try to talk about it,” but oftentimes they are not heard or helped.

Be yourself.

Davis said that she didn’t do the work she did in this arena for minority professionals to not show up in this profession as themselves.

“We shouldn’t have to not be ourselves to fit in,” Davis said. “We are equally as competent and sometimes even more so. Don’t think for one minute you’re not doing something significant.”

Ana TL Headshot_Cropped

Ana Trujillo Limón is senior editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org, or connect with her on LinkedIn


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It’s Not Just About Salary: Purposeful Staffing

I routinely get calls or questions from advisers about compensation for a staff position or junior adviser. Whether it involves hiring/retaining a junior person, or a staff member trying to make a case to their firm about how underpaid they are, the conversation is less about salaries (although it does come up) and more about incentive or variable compensation and bonus. Instead of providing a number or formula, I’ve been asking what would it take that person to leave your firm and why are you doing things? If you know what kind of firm you’re running, and what your goals are, you can be purposeful with compensation.

What Behavior Do You Want?

Over the years, I have lived by a simple rule when it comes to compensation: compensation, especially with variable comp, should be used to drive better behavior. More importantly, advisers shouldn’t have to stick with the same variable comp structure every year as priorities and goals may change. I ask the adviser to think about the goals of their firm, more importantly the leading indicators of success and tie the metrics around those indicators.

As I said, the conversations are changing lately—they are becoming broader. Today, we start with a conversation about work environment. We answer and discuss:

  • Is there a clear vision and purpose for the firm (Do you know where you are headed)?
  • Does the employee have/want the opportunity to grow and is the path laid out for them?
  • Is there a sense that the employee is fulfilled?
  • Is the employee valued?
  • Is compensation really the issue you are trying to solve for?

In my mind, staff more often leaves a business for reasons other than compensation. The biggest reason is always around the vison of the firm and where they fit.

Purposeful Staff

In our most recent paper, “The Purposeful Advisory Firm,” my co-author Raef Lee and I discussed the concept of value engineering for advisory firms. The idea was that an advisory firm has a few levers they can pull that can determine the firm’s direction. Moving a lever in the right direction can propel the firm toward successful enterprise or to a lifestyle firm. I think the people (staff) lever is the most important.

How you use talent can be the key to your success, so it is critically important to understand, communicate and plan for the direction of your firm before you discuss variable compensation with the staff. How can you decide on a number if you don’t know what you are paying for or the direction that the compensation will take your firm?

Lifestyle Versus Enterprise: Questions for You

Before you get into the dollars and cents of a compensation plan, I think it is important to ask questions that can help move that value lever:

  1. Do you aspire to take your firm to the next level? (In addition, can you define what that next level looks like?)
  2. Do you have the appetite for adding (and managing) more employees?
  3. Do you have it in you to fire yourself as adviser and hire yourself as CEO?

If you answer yes to all three of these questions, you are heading down that enterprise path. You will be busy with defining roles, job descriptions and creating a path for all your team members to grow within your firm. Yes means looking at a team approach to the client service model and possibly a chief operating officer hire. The enterprise variable compensation will look at the big picture of the firm and how you are building it for the future.

If you answer no, then the lifestyle approach may be calling you. And figuring out that variable compensation is going to be even more important. You should create a plan that reinforces longevity, continuity and service. The lifestyle firm cannot afford huge turnover that will force the adviser back in the day-to-day operations of the practice. Morale and culture are very important to retain existing clients and strengthen the brand of the no-doubt personality driven firm.

Consequences

Not having a purposeful compensation plan in place leads to employee retention issues. A purposeful plan leads to maximizing the hire for the future direction of your firm. I am often accused of sounding like an attorney (or an economist). When someone asks me about compensation, instead of a direct answer, I now say, “It depends on you.” What kind of firm do you want to be?

Editor’s Note: Join SEI and FPA for a webinar titled, “The Renaissance in Charitable Trust Planning,” at 2 p.m., Eastern, April 18. Register for the webinar here. Also, a version of this blog post first appeared on SEI’s practice management blog, Practically Speaking.

John Anderson

John Anderson is the managing director of Practice Management Solutions for the SEI Advisor Network. He is responsible for all programs focused on helping financial advisers grow their businesses, create efficiencies in their operations and differentiate their practices. He is also the author of SEI’s practice management blog, Practically Speaking.