LPL’s Intends to Close the Diversity Gap for Financial Advisors

LPL continues supporting diverse advisors as diverse investors increase

According to a black investor survey conducted earlier this year, a record number of Black Americans became first-time investors in 2020. This increase comes at a time when investors are more eager to find financial advisors with shared experiences and backgrounds. However, diverse advisors can be difficult to find--even in 2021.

Though the financial advisor profession has been slow to reflect diverse investors, LPL Financial is adamant in helping to increase diversity in the industry. Just last month, LPL was mentioned in Financial Planning’s article regarding Black affluent investors as one of the firms eager to work with clients who are “Black, Latino or from other minority groups” and focused on refining “recruiting, hiring and retention.”

Black investors’ concerns steeped in generational inequity

The aforementioned Financial Planning article also shared more on the challenges affluent Black investors face. Apart from the wealth gap that persists, Black investors’ may be less likely to accrue debt. This can contribute to wealth-building challenges and perpetuate wealth inequality as investors miss opportunities due to a reluctance to raise their risk tolerance.

A negative experience with financial advisors in the past, and lack of representation amongst financial professionals in the present, may also be contributing to affluent Black investors’ concerns. This could lead to more timidity in taking risks as well as trust becomes a bigger part of the conversation in choosing a wealth manager.

LPL focuses on closing the diversity gap among advisors for investor outreach

Just as Black investors have faced challenges, Black advisors have faced similar barriers while being largely underrepresented in the financial industry. It’s a subject covered extensively in LPL Financial’s "Around the Table" video series, was moderated by LPL Advisor Diversity and Inclusion Leader, Lauren Taylor Riley.

The series featured six Black advisors at LPL sharing their industry experiences and insights. During a discussion in the series’ initial video, “Black Advisors, Episode 1: Barriers to Entry,” one advisor states, “When there’s nobody that looks like you in a hiring position, it makes it that much more difficult to compete.” It’s a sentiment felt throughout the industry among Black advisors, and potentially representative of the sentiments held by today’s Black investors.

Earlier this year, Taylor Riley shared a statement on LPL’s Diversity & Inclusion program’s three areas of focus with Think Advisor. They include, “… bringing in more diversity as far as our advisors coming into LPL, making sure that the current advisors that we have at LPL are adequately resourced to grow their business and serve their clients, and then also finding new ways to address barriers to growth of those underrepresented advisor groups.”

LPL increases opportunities for advisors to reach diverse investors

Recent studies indicate Black-identifying individuals don't anticipate wealth-gap improvements in the future, despite feeling more optimistic about their finances in the post-pandemic present. While multiple factors could play into this lack of optimism, it all speaks to the importance of representation among financial advisors and improving their ability to connect with underrepresented investors.

As LPL continues growing its catalogue of offerings for independent advisors, a commitment to diversity and inclusion stays in equal focus. Through LPL’s tools, services, and resources, diverse advisors have support that strengthens their diverse client connections and helps them build independently, their way. 

^{The views and opinions expressed by the LPL Financial Professionals may not be representative of the views of other Financial Professionals and are not indicative of future performance or success. Neither LPL Financial nor the LPL Financial Advisor can be held responsible for any direct or incidental loss incurred by applying any of the information offered.}

^{Throughout this communication, the terms “financial advisors” and “advisors” include registered representatives and/or investment adviser representatives affiliated with LPL Financial LLC, an SEC registered broker-dealer and investment adviser.}