The Importance of Diversity and Professionalism in RIA Teams
As a financial advisor, I know firsthand how crucial it is for Registered Investment Advisor (RIA) firms to build diverse and highly skilled teams. A well-rounded, professional team brings a wealth of perspectives, experiences, and expertise to the table, enabling the firm to better serve its clients and navigate the ever-changing landscape of wealth management.
In this blog post, I'll dive into the key reasons why diversity and professionalism are essential for RIA success, and how Savvy is leading the way in building high-performing teams to power the future of financial advice.
The Business Case for Diversity
Diversity is not just a buzzword or a box to check off - it's a strategic imperative that drives real business results. Numerous studies have shown that diverse teams outperform homogeneous ones across a range of metrics, from creativity and innovation to financial performance.
For example, McKinsey & Company's research found that companies in the top quartile for ethnic and cultural diversity on executive teams were 33% more likely to have industry-leading profitability. In the case of gender diversity, companies in the top quartile were 21% more likely to outperform on profitability1.
The financial services industry, in particular, has a long way to go when it comes to diversity. Despite some progress in recent years, the sector remains predominantly white and male. For instance, a 2021 study by the CFP Board found that less than 3.5% of the 92,055 CFP professionals in the U.S. are Black or Latino2.
As David Dawkins, managing director of the diverse client segments group at Wells Fargo Advisors, put it: "We need advisors of color to meet the burgeoning wealth in communities of color, who are underserved and underrepresented. By 2045, the U.S. will be a majority minority, and wealth in diverse markets will continue to grow rapidly. As this trend continues, advisors of color will only be in greater demand."2
At Savvy, we recognize the immense value that diversity brings to our team and our clients. By actively recruiting and developing advisors from a wide range of backgrounds, we are better equipped to understand and serve the unique needs of an increasingly diverse client base. Our team reflects the rich tapestry of the communities we serve, and that translates into more personalized, culturally competent advice for every client.
The Power of Different Perspectives
Diversity is not just about demographics - it's about diversity of thought. When you bring together people with different life experiences, skill sets, and ways of thinking, you create a team that is greater than the sum of its parts.
Cognitive diversity, or diversity of thought, has been shown to enhance problem-solving, decision-making, and innovation in teams. A 2017 study by Deloitte found that cognitively and demographically diverse teams can boost innovation by up to 20%3.
In the complex world of financial planning and wealth management, having a team with diverse perspectives is invaluable. Each advisor brings their own unique insights and approaches to the table, allowing us to tackle client challenges from multiple angles and arrive at the best possible solutions.
For example, an advisor with a background in psychology may have a keen understanding of behavioral finance and how emotions can impact investment decisions. An advisor with experience in real estate may bring knowledge of property investments and tax strategies. By leveraging the diverse experience of our team, we can provide clients with holistic, well-rounded advice that considers all aspects of their financial lives.
Building Trust Through Representation
One of the most important factors in a successful advisor-client relationship is trust. Clients need to feel confident that their advisor understands their unique circumstances, values, and goals, and has their best interests at heart.
For many clients, working with an advisor who shares their background or life experiences can be a powerful way to build that trust. As Mayra Rodriguez Valladares, managing principal of financial consultancy firm MRV Associates, explains:
"Having people of color as financial advisors is very important because talking about money, insurance, savings, investments and estate planning is very personal. People need to be with people whom they feel can understand them, can empathize with them and are not judging them."2
At Savvy, we strive to create a team that reflects the diversity of our client base, so that every client can feel seen, heard, and understood. Whether it's an advisor who speaks their native language, shares their cultural background, or has faced similar challenges in their own financial journey, we believe that representation matters.
By building a diverse team of advisors, we can better connect with clients on a personal level, build deeper relationships based on trust and understanding, and ultimately deliver better outcomes for their financial futures.
The Importance of Professionalism
Of course, diversity alone is not enough - it must be paired with the highest standards of professionalism and expertise. At Savvy, we are committed to building a team of top-tier financial advisors who are not only diverse in background but also highly skilled, experienced, and dedicated to their craft.
Many of our advisors hold advanced certifications such as the CFP (Certified Financial Planner), CFA (Chartered Financial Analyst), or CPA (Certified Public Accountant). Many have decades of experience working with high-net-worth individuals and families, and bring knowledge in areas such as investment management, tax planning, estate planning, and retirement planning.
But professionalism goes beyond just technical skills and knowledge. It's also about embodying the values and ethics that are at the core of our firm's culture. Our advisors are held to the highest standards of integrity, transparency, and fiduciary responsibility. We always put our clients' interests first, and are committed to providing objective, unbiased advice based on sound financial principles.
We also invest heavily in the ongoing professional development of our team, through regular training, mentorship, and opportunities for growth. We believe that the best advisors are lifelong learners who are constantly striving to expand their knowledge and skills to better serve their clients.
By combining diversity with professionalism, we believe we can build the ultimate dream team of financial advisors - one that is positioned to help clients achieve their financial goals and build lasting wealth.
The Savvy Difference
At Savvy, we are proud to be at the forefront of building diverse, professional teams of financial advisors. Our unique model is designed to attract top talent from a wide range of backgrounds and empower them with the tools, technology, and support they need to succeed.
We start by actively recruiting advisors who bring diverse perspectives and experiences to the table. We look beyond the traditional talent pools and seek out candidates from underrepresented groups in the industry, such as women, people of color, and LGBTQ+ individuals.
Once onboard, we provide our advisors with extensive training and development opportunities to help them hone their skills and grow their practices. Our proprietary technology platform streamlines back-office tasks and frees up advisors to focus on what they do best - building deep relationships with clients and providing exceptional financial advice.
We also believe in the power of teaming to drive success. Our advisors work collaboratively in teams, leveraging each other's strengths and expertise to deliver comprehensive, holistic advice to clients. This team-based approach not only enhances the client experience but also creates opportunities for mentorship, knowledge sharing, and professional growth among our advisors.
But perhaps most importantly, we foster a culture of inclusion, respect, and belonging where every advisor can bring their full selves to work. We celebrate the diversity of our team and believe that our differences make us stronger. By creating an environment where everyone feels valued and supported, we can attract and retain the best talent in the industry.
The results speak for themselves. Our diverse, professional teams are delivering outstanding results for clients. We are proud to be setting a new standard for what a modern, inclusive RIA firm can look like - and we're just getting started.
Conclusion
As the wealth management industry continues to evolve, the importance of building diverse, professional teams of financial advisors has never been clearer. At Savvy, we believe that diversity and professionalism are not just nice-to-haves - they are essential ingredients for success in today's complex, rapidly changing world.
By embracing diversity of background, thought, and experience, and pairing it with the highest standards of expertise and ethics, we are building the dream team of financial advisors. A team that can understand and serve the unique needs of an increasingly diverse client base, and help them achieve their financial goals with confidence.
If you're a financial advisor looking to take your career to the next level, we invite you to learn more about the Savvy difference. Join a firm that is leading the way in building the future of financial advice - one diverse, professional team at a time.
References:
1 McKinsey & Company. Diversity wins: How inclusion matters, 2020.
2 Investopedia. Why Financial Advisors of Color Matter, 2023.
3 Deloitte. Diversity and inclusion: The reality gap, 2017.
4 Barron's. 2023 Top 100 Private Wealth Management Teams, 2023.
5 Zippia. Finance Advisor Demographics and Statistics in the US, 2023.
6 Scotiabank. Financial Advisor Careers, 2023.
7 Forbes. Are Financial Advisors Worth My Money, 2023.
8 Unexpected Virtual Tours. The Importance of Promoting Diversity in the Workplace, 2023.
9 Investopedia. How Do DEI Initiatives Benefit Financial Advisory Firms?, 2023.
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. It is important to note that federal tax laws under the Internal Revenue Code (IRC) of the United States are subject to change, therefore it is the responsibility of taxpayers to verify their taxation obligations.
Savvy Wealth Inc. is a technology company. Savvy Advisors, Inc. is an SEC registered investment advisor. For purposes of this article, Savvy Wealth and Savvy Advisors together are referred to as “Savvy”. All advisory services are offered through Savvy Advisors, while technology is offered through Savvy Wealth. The views and opinions expressed herein are those of the speakers and authors and do not necessarily reflect the views or positions of Savvy Advisors.
The Importance of Diversity and Professionalism in RIA Teams
As a financial advisor, I know firsthand how crucial it is for Registered Investment Advisor (RIA) firms to build diverse and highly skilled teams. A well-rounded, professional team brings a wealth of perspectives, experiences, and expertise to the table, enabling the firm to better serve its clients and navigate the ever-changing landscape of wealth management.
In this blog post, I'll dive into the key reasons why diversity and professionalism are essential for RIA success, and how Savvy is leading the way in building high-performing teams to power the future of financial advice.
The Business Case for Diversity
Diversity is not just a buzzword or a box to check off - it's a strategic imperative that drives real business results. Numerous studies have shown that diverse teams outperform homogeneous ones across a range of metrics, from creativity and innovation to financial performance.
For example, McKinsey & Company's research found that companies in the top quartile for ethnic and cultural diversity on executive teams were 33% more likely to have industry-leading profitability. In the case of gender diversity, companies in the top quartile were 21% more likely to outperform on profitability1.
The financial services industry, in particular, has a long way to go when it comes to diversity. Despite some progress in recent years, the sector remains predominantly white and male. For instance, a 2021 study by the CFP Board found that less than 3.5% of the 92,055 CFP professionals in the U.S. are Black or Latino2.
As David Dawkins, managing director of the diverse client segments group at Wells Fargo Advisors, put it: "We need advisors of color to meet the burgeoning wealth in communities of color, who are underserved and underrepresented. By 2045, the U.S. will be a majority minority, and wealth in diverse markets will continue to grow rapidly. As this trend continues, advisors of color will only be in greater demand."2
At Savvy, we recognize the immense value that diversity brings to our team and our clients. By actively recruiting and developing advisors from a wide range of backgrounds, we are better equipped to understand and serve the unique needs of an increasingly diverse client base. Our team reflects the rich tapestry of the communities we serve, and that translates into more personalized, culturally competent advice for every client.
The Power of Different Perspectives
Diversity is not just about demographics - it's about diversity of thought. When you bring together people with different life experiences, skill sets, and ways of thinking, you create a team that is greater than the sum of its parts.
Cognitive diversity, or diversity of thought, has been shown to enhance problem-solving, decision-making, and innovation in teams. A 2017 study by Deloitte found that cognitively and demographically diverse teams can boost innovation by up to 20%3.
In the complex world of financial planning and wealth management, having a team with diverse perspectives is invaluable. Each advisor brings their own unique insights and approaches to the table, allowing us to tackle client challenges from multiple angles and arrive at the best possible solutions.
For example, an advisor with a background in psychology may have a keen understanding of behavioral finance and how emotions can impact investment decisions. An advisor with experience in real estate may bring knowledge of property investments and tax strategies. By leveraging the diverse experience of our team, we can provide clients with holistic, well-rounded advice that considers all aspects of their financial lives.
Building Trust Through Representation
One of the most important factors in a successful advisor-client relationship is trust. Clients need to feel confident that their advisor understands their unique circumstances, values, and goals, and has their best interests at heart.
For many clients, working with an advisor who shares their background or life experiences can be a powerful way to build that trust. As Mayra Rodriguez Valladares, managing principal of financial consultancy firm MRV Associates, explains:
"Having people of color as financial advisors is very important because talking about money, insurance, savings, investments and estate planning is very personal. People need to be with people whom they feel can understand them, can empathize with them and are not judging them."2
At Savvy, we strive to create a team that reflects the diversity of our client base, so that every client can feel seen, heard, and understood. Whether it's an advisor who speaks their native language, shares their cultural background, or has faced similar challenges in their own financial journey, we believe that representation matters.
By building a diverse team of advisors, we can better connect with clients on a personal level, build deeper relationships based on trust and understanding, and ultimately deliver better outcomes for their financial futures.
The Importance of Professionalism
Of course, diversity alone is not enough - it must be paired with the highest standards of professionalism and expertise. At Savvy, we are committed to building a team of top-tier financial advisors who are not only diverse in background but also highly skilled, experienced, and dedicated to their craft.
Many of our advisors hold advanced certifications such as the CFP (Certified Financial Planner), CFA (Chartered Financial Analyst), or CPA (Certified Public Accountant). Many have decades of experience working with high-net-worth individuals and families, and bring knowledge in areas such as investment management, tax planning, estate planning, and retirement planning.
But professionalism goes beyond just technical skills and knowledge. It's also about embodying the values and ethics that are at the core of our firm's culture. Our advisors are held to the highest standards of integrity, transparency, and fiduciary responsibility. We always put our clients' interests first, and are committed to providing objective, unbiased advice based on sound financial principles.
We also invest heavily in the ongoing professional development of our team, through regular training, mentorship, and opportunities for growth. We believe that the best advisors are lifelong learners who are constantly striving to expand their knowledge and skills to better serve their clients.
By combining diversity with professionalism, we believe we can build the ultimate dream team of financial advisors - one that is positioned to help clients achieve their financial goals and build lasting wealth.
The Savvy Difference
At Savvy, we are proud to be at the forefront of building diverse, professional teams of financial advisors. Our unique model is designed to attract top talent from a wide range of backgrounds and empower them with the tools, technology, and support they need to succeed.
We start by actively recruiting advisors who bring diverse perspectives and experiences to the table. We look beyond the traditional talent pools and seek out candidates from underrepresented groups in the industry, such as women, people of color, and LGBTQ+ individuals.
Once onboard, we provide our advisors with extensive training and development opportunities to help them hone their skills and grow their practices. Our proprietary technology platform streamlines back-office tasks and frees up advisors to focus on what they do best - building deep relationships with clients and providing exceptional financial advice.
We also believe in the power of teaming to drive success. Our advisors work collaboratively in teams, leveraging each other's strengths and expertise to deliver comprehensive, holistic advice to clients. This team-based approach not only enhances the client experience but also creates opportunities for mentorship, knowledge sharing, and professional growth among our advisors.
But perhaps most importantly, we foster a culture of inclusion, respect, and belonging where every advisor can bring their full selves to work. We celebrate the diversity of our team and believe that our differences make us stronger. By creating an environment where everyone feels valued and supported, we can attract and retain the best talent in the industry.
The results speak for themselves. Our diverse, professional teams are delivering outstanding results for clients. We are proud to be setting a new standard for what a modern, inclusive RIA firm can look like - and we're just getting started.
Conclusion
As the wealth management industry continues to evolve, the importance of building diverse, professional teams of financial advisors has never been clearer. At Savvy, we believe that diversity and professionalism are not just nice-to-haves - they are essential ingredients for success in today's complex, rapidly changing world.
By embracing diversity of background, thought, and experience, and pairing it with the highest standards of expertise and ethics, we are building the dream team of financial advisors. A team that can understand and serve the unique needs of an increasingly diverse client base, and help them achieve their financial goals with confidence.
If you're a financial advisor looking to take your career to the next level, we invite you to learn more about the Savvy difference. Join a firm that is leading the way in building the future of financial advice - one diverse, professional team at a time.
References:
1 McKinsey & Company. Diversity wins: How inclusion matters, 2020.
2 Investopedia. Why Financial Advisors of Color Matter, 2023.
3 Deloitte. Diversity and inclusion: The reality gap, 2017.
4 Barron's. 2023 Top 100 Private Wealth Management Teams, 2023.
5 Zippia. Finance Advisor Demographics and Statistics in the US, 2023.
6 Scotiabank. Financial Advisor Careers, 2023.
7 Forbes. Are Financial Advisors Worth My Money, 2023.
8 Unexpected Virtual Tours. The Importance of Promoting Diversity in the Workplace, 2023.
9 Investopedia. How Do DEI Initiatives Benefit Financial Advisory Firms?, 2023.
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. It is important to note that federal tax laws under the Internal Revenue Code (IRC) of the United States are subject to change, therefore it is the responsibility of taxpayers to verify their taxation obligations.
Savvy Wealth Inc. is a technology company. Savvy Advisors, Inc. is an SEC registered investment advisor. For purposes of this article, Savvy Wealth and Savvy Advisors together are referred to as “Savvy”. All advisory services are offered through Savvy Advisors, while technology is offered through Savvy Wealth. The views and opinions expressed herein are those of the speakers and authors and do not necessarily reflect the views or positions of Savvy Advisors.
