The lack of diversity in the finance industry is no longer business as usual.
SACRAMENTO, Calif. – A vital part of our country’s economic health is financial services, banks, real estate companies, credit card companies and credit unions are something we all depend on to manage our money and purchase goods and services.
But research shows that the people who run the companies and institutions of the financial sector do not adequately represent the diversity of our country. A problem long ignored. The lack of diversity in the finance industry is no longer business as usual.
“I am the sugar. I am the tobacco. I am the cotton and I am the slave trade. The four pillars that make America the great country it is becoming,” said Jay King, president of California Black Chamber of Commerce.
King is a native of Sacramento, he grew up in Del Paso Heights created a successful music career and created the Greater Sacramento Financial Literacy Group.
“There’s a narrative about black people in this country, that we can’t handle money. We’re all consumers. We don’t understand investing. That we’re lazy. Now you have to understand when the people are starting to say we are lazy, these are the same people who held us as slaves,” King said.
Equality is a concept that is rampant in America and has created ripple effects in labor markets and institutions for decades. Racial inequality has particularly affected the financial sector.
The Greater Sacramento Financial Literacy Group discusses everything from stocks and savings to cryptocurrency. King said their first meeting started with around 60 people.
“We went down to 20 people, but we’re still 20 now. But now we’re also 1,000 more,” King said.
DA Abrams is the Managing Director of the Center for Financial Planners Board Financial Planning Center. The mission of the Financial Planning Center? To create a more diverse and sustainable financial planning profession, so that everyone has access to ethical financial planning advice.
Abrams said diversity is important for several reasons, like the huge demographic shift, but that’s not all.
“…Annual purchasing power, purchasing power of people of color. That’s a surplus of, I don’t know, three, almost $4 trillion, isn’t it. That’s So is a lot of money, that people of color have disposal,” Abrams said.
He said in 2021 the number of certified black and Latino financial planners increased by nearly 14% but still only represent a little less than 5%.
Gina Richardson’s journey in banking began 15 years ago when she had difficulty opening an account at a credit union.
“I went back to that institution, got the account, and then applied to work there too just because I didn’t want someone who looked like me to get the same treatment that woman gave me” , she continues. “Now some people can say, ‘Well, how did you know it was racially motivated? I don’t know if it was, but because I’m me because I’ve been a black woman all my life. I know that some things happen to people who look like me.'”
During his first job at a credit union, Richardson rose through the ranks quickly. Being a people person has excelled her in several roles, but throughout her career she has encountered many people who are vulnerable and often untrusting of banks.
“A lot of people, especially in the black and brown community, hide their money at home or keep mattress money as we like to call it because they don’t trust financial institutions,” Richardson said.
She added that being a young black woman in the financial industry created a passion and not only did she educate clients, but more importantly she built trust.
“Especially when I open these accounts for people, and I’m the originator of their loans, they trusted me. So I was lucky to be that voice. So I got felt like I owed it not just to everyone I served with, especially my community, to learn as much as I needed to know about the banking system, so I can be that voice for them to spread the truth,” Richardson said.
She continued to climb the ranks, which was not an easy task. Richardson said it all comes down to mindset and choosing your own career path.
“When it comes to black and brown people, we’re just happy to be in a room, sometimes we’re just happy to have this current good position, that sometimes we’re not even looking to move on to the next position, or even climb even higher. For my part, it’s always in my mind that I want to climb as high as possible,” she said.
Little did she know that soon her dream job would present itself. In 2018, Richardson became the leading financial wellness educator at SAFE credit union where she educates people on financial literacy, budgeting, credit, buying a home, and the list goes on.
“When you have different people sitting at the table, you have different races, you have different genders, you have different perspectives. Those perspectives need to be heard in order to grow,” she said.
And Richardson is not wrong.
Research shows that diversity creates more innovation, better recruitment and better employee retention, Abrams said.
“Overall, it just makes good business sense to take advantage of the increased number of people of color, not only in your workforce, but the market continues to grow and more and more people color in the workplace. It’s going to help you connect with the changing market,” said Abrams.
As for the future of businesses, Abrams said businesses are noticing the change.
“If you’re really what I would call strategic and intentional in going after that target market, your business will be very successful. And for those who don’t, to me, they get left in the dust,” Abrams said.