The future of wealth management depends on hiring and developing a diverse and better workforce to meet the needs of rapidly growing minority communities.
Census figures show the share of whites in the US population has declined in all 50 states since 2010. Four in 10 Americans now identify with a race or ethnic group other than whites, Brookings analysis shows Institution.
The demographic changes underway in the United States pose challenges for wealth management companies whose ranks are typically dominated by white males. Companies are now in a race to catch up.
The murder of George Floyd in 2020 sparked nationwide protests and highlighted racial and economic disparities, prompting companies to renew their past commitment to racial and gender diversity.
“No advisor will be able to optimize their growth strategy over the next decade unless they reach out to these communities,” said Andy Sieg, president of Merrill Lynch Wealth Management.
Sieg added, “There is going to be tremendous wealth creation happening in various communities over the next decade. It’s going to take various forms – African American, Hispanic, Latino families. “
Advisors who don’t embrace diversity will see their market shrink, Sieg said.
Sieg said Merrill is firmly committed to diversity. Seig spoke to the Forbes / SHOOK Virtual Top Advisor event, “Forging Ahead”, held on June 3. Merrill Private Wealth Advisor Rebecca Rothstein, Forbes’ number one advisor, moderated the session
Women are another segment that deserves more attention, Sieg said. “Women already control a huge amount of money in this country.” By 2030, women are expected to control $ 30 trillion in wealth in the United States, according to McKinsey & Co.
Merrill’s parent company, Bank of America
About 50% of the management team and employees of the company are women or minorities. “One of the first things I did four years when I had the opportunity to take on this role was make sure we had a diverse leadership team,” said Sieg.
“I think we see the impact of that on the way we approach things and solve problems. It had a real business impact, ”said Sieg.
Sieg said the wealth management industry has been very opaque on the issue of diversity, making it difficult to draw comparisons between companies.
Sieg said Merrill, however, is releasing numbers attesting to his progress on the diversity front. “There is a great responsibility that comes with this,” he said.
“A big part of my goal is: how do we keep improving? How do we hold ourselves accountable as an organization? Sieg said. “I’m very happy with the progress we’ve made, but we still have a long way to go until we’re happy. “