Financial planning needs a DEI makeover

Why is representation so lacking in the financial planning industry, and does it matter in the big picture? We address these questions, and more, in this post.

According to the CFP Board, out of 88,726 CFP® professionals, only 1,493 are Black and 2,170 are Latino. Framed another way, Black and Latino CFP® professionals comprise less than 5% of all Certified Financial Planners™—despite the fact that over 31% of the U.S. population—are Black and Latino.

Less than 5% of all Certified Financial Planners™ are Black and Latino.

What this tells us is that the financial planning industry is behind when it comes to their Diversity, Equity, and Inclusion (DEI) efforts. We’ll explain why this matters and what our team at Origin is doing to address this gap.

Why does DEI matter in financial planning? 

When it comes to finances, everyone’s situation is unique. That’s why, when people seek out financial guidance, it’s essential that they have access to CFP® professionals who represent a diverse range of backgrounds—which gives them the option to choose an advisor who can relate to them personally and professionally. This is especially important for People of Color, who tend to experience more financial stress, have less savings, and are already subject to a wealth gap. For POC, having access to CFP® professionals who can understand the cultural and economic nuances of their situation can make the difference between whether they decide to seek out financial advice or forgo it.

How financial wellness improves DEI

You may be wondering: why does any of this matter in the workplace? If you plan to offer a comprehensive financial wellness program to your employees, you want to make sure it’s one that’s accessible and impactful for all your employees. And a key part of crafting a program like this is to make sure they have access to diverse financial planning professionals.

The benefits of a diverse, equitable, and inclusive financial wellness program

Helping all your employees—regardless of their background, income, net worth, or unique circumstances—achieve financial wellness is beneficial for many reasons. Specifically, financial wellbeing leads to:

Improved mental health 

As we mentioned before, your employees of color are more likely to experience high levels of financial stress and carry more debt than your other employees. This can have a profound impact on their mental health. People in debt have higher rates of mental health issues like depression and anxiety compared to those who are debt-free. Financial stress is also the second most common cause of suicide, after depression. On the other hand, when people feel good about their financial health, they feel optimistic about their overall health. Given that 53% of respondents said they would feel less stressed about their overall financial situation if they had financial wellness benefits, it’s clear that this type of offering can have a positive influence on the mental health of your employees.

Better financial decisions

42% of workers report that they’ll likely need to use money in a retirement account for expenses other than retirement. This indicates that your employees need the tools, education, and support to better manage their money. A comprehensive and DEI-focused financial wellness benefit does just that—whether it’s by giving your workforce access to personalized guidance from a diverse network of CFP® professionals or helping them create budgets that align with their short and long-term goals.

Higher retention rates

When your employees feel supported by your organization, they’re more likely to stay. But what areas do your workers struggle with the most? When asked what they feel causes them the most stress, employees cite financial matters more than any other life stressors combined. That’s why 80% of people who feel their employers are committed to helping them strengthen their financial resiliency are more likely to stay with the employer. Another study found that 50% of respondents would be more committed to staying with their employer for a longer period if they offered financial wellness benefits.

What Origin is doing to help

At Origin, we recognize the positive ripple effect that having access to diverse financial planners can have on your employees. And we’re committed to helping the industry progress in any way we can. That’s why, through the Origin Diversity Program’s Financial Scholars Fund, we’ve pledged to cover the cost of the CFP® professional exam, training materials, and classes to support the advancement of underrepresented professionals in financial planning—awarding 10 grants valued at $50,000 in this inaugural year. Grantees will also have access to Origin’s diverse financial planner network for mentorship and development. If you’re interested in learning more about the fund, check out this post for additional details. It’s clear that the financial planning industry is in need of a DEI makeover. But, with the growing amount of attention this topic is receiving, we’re optimistic that we’re heading in the right direction. As an employer, you can do your part by making sure to work with a financial wellness benefits vendor who are committed to breaking down barriers for CFP® and other financial professionals.

If you’re curious to learn more about the link between financial wellness and DEI, download our free eBook.


How financial wellness can help your DEI strategy

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