Art by Melinda Beck

You only have to look at the leadership team at SageView Advisory Group to see how the shift to remote work has impacted diversity efforts at retirement advisory firms.

Pre-pandemic, the entire executive team was located in Newport Beach, California, and consisted mostly of white men. The transition to remote work allowed the team to bring on a more diverse team, including a woman and a person of color, allowing new team members to work from their homes in Minneapolis and Seattle.

“Remote work has given us an opportunity as plan advisers and adviser firms to expand our talent pool,” says Tara Egan, the firm’s managing director of human resources, who joined the company in April 2022. “I’m a good example. I’m leading our HR department from Dallas.”

Vestwell has also seen a significant change in its geographic footprint since 2020.

“It was very New York-centric,” says Patty Kim, senior vice president and head of people at Vestwell. “But we intentionally made the decision to be remote-friendly to leverage talent across the nation. Especially as we grow our business, we want to make sure we have talent that can serve different time zones and different demographics.”

Opportunities and Challenges

Women, parents, and people of color are opting in to remote work at higher rates than their peers, according to a 2022 Future Forum study. However, some workplace experts say that while remote work has been a boon to diversity efforts, it represents new challenges for equity and inclusion initiatives.

Workers who aren’t in the office may feel less connected to company culture and can miss out on opportunities for promotions or raises.

“When we aren’t together regularly, it can be hard to understand the day-to-day of our teams,” Egan says. “We may not know what they’re dealing with at home, or what they’re dealing with in their communities. You don’t see and hear those things every day.”

Companies can continue to make progress toward their DE&I goals, but should seek to do sowhile recognizing the pitfalls of DE&I efforts for remote workers and putting new solutions and initiatives in place designed for the way we work now, experts say.

“We are seeing companies having to be a lot more intentional about creating transparency and opportunities for their employees to have an equitable experience,” says Liv Gagnon, co-founder of choir, which aims to life the voices of the underrepresented in the financial services industry. “It can be more challenging for people to fight for advancement, especially women of color who are usually more hesitant to ask for what they deserve. Remote work amplifies that issue.”

One step that SageView has taken to address such concerns is hiring a new HR team member this year with a specific mandate to focus on DE&I. Among his tasks: help set up and expand the company’s employee resource groups (ERGs) and take action based on insights from a new employee engagement pulse survey the company is using to tap into worker sentiment.

Such initiatives are important in all industries, but especially for financial services and retirement advisories, which has historically struggled to attract and retain more diverse talent.

Better Solutions Needed

“When we look at the way the system is now, we are ignoring entire groups of people and preventing them from participating in the conversation,” says Tina Opie, a management professor at Babson College and co-author of The Shared Sisterhood: How to Take Collective Action for Racial and Gender Equity at Work. “That tells you your solutions are not as good as you think they are.”

Among broker/dealers and independent advisory firms, women comprise 18.1% of headcount, with just 2.9% of advisers identifying as Black, 5.1% as Latinx, and 4.3% as Asian, according to 2021 Cerulli Associates data.

“When we are talking about the retirement advisory space, we are looking at an industry that is predominantly white and predominantly male,” Gagnon says. “So you are focusing on looking internally and asking yourself what about our organization creates a place where people from diverse backgrounds would want to work.”

That may require re-evaluating everything from flexible work policies to how the company recruits employees.

“Firms need to ask themselves: ‘Where are we going to find employees that are representative of the communities we want to serve?’ and ‘How are we going to internally create programs that make them want to stay here?’” Gagnon says.

A focus on communication

It also requires an increased focus on being intentional and clear in all communications with coworkers. In a traditional office environment, managers have more data points they can use to evaluate and understand their employees, including body language, tone, and natural office chatter. In a remote setting, they have to work harder to make sure their messages are coming across as intended, Kim says.

Employee also need to work harder at self-promotion, making sure that their managers are aware of their accomplishments, Kim says.

One strategy for managers looking to increase feelings of belonging and inclusion on their teams are to host regular one-on-one meetings with their staffers or even setting up office hours to build connections with workers, Opie says.

In such meetings, managers can talk to their direct reports about what’s working well, and how the company can better support each worker and better utilize their strengths. For coworkers located geographically close to one another, in-person meetings still have a place.

“But maybe, instead of requiring the employee to come to the office, you go to meet them at a coffee shop not far from where the employee lives,” she adds.

At Vestwell, the shift to remote work has also meant a shift in the way that the company evaluates employees, looking to their output and outcomes, rather than face time. That change has also helped mitigate some bias inherent in a face-to-face work environment.

“It evens the playing field a bit, when you’re responsible for a specific piece of business or work, but you’re not seen physically,” Kim says. “There’s just more focus on the quality of the work itself.”

Making Up For Missed Connections

At the Cleveland-based Oswald Financial, which has also benefited from casting a wider recruiting net in recent years, the biggest DE&I struggle has been replicating the training, engagement, and transfer of knowledge that occur more organically in an in-person environment, says Deena Rini, vice president and practice leader of retirement plans and wealth management services at the firm.

To make up for some of those lost connections, Oswald Financial has leaned into more off-site meetings for employees.

“Whether it’s lunch sessions for strategic planning or fun events like happy hours or golf, we make it a priority to have people together, in-person, on a monthly or quarterly basis,” Rini says. “We support the expensive with having employees come into corporate headquarters for that experience.”

In addition, part of the firm’s strategic plan includes an emphasis on one-on-one, peer-to-peer connections both in-person and via videocall.

“Those are opportunities for employees to exchange ideas and work on initiatives together with dedicated time,” Rini says. “That has been a big help for us.”

Another move that retirement plan advisories can make to improve their equity efforts, for remote as well as in-person teams, is moving toward more transparent compensation models, Gagnon says.

“Just being transparent about pay structure, and making sure people understand why they’re getting paid what they’re getting paid can do a long way toward equity efforts,” she says. “Especially if already feel like they’re working in silos.”

A competitive advantage

Research has shown that such efforts pay off for firms, especially in an increasingly diverse world. Organizations that view the remote world as an opportunity to evolve will have a competitive advantage over their peers, Opie says.

It comes down to being able to relate to participants, Rini says.

“Ideally, everyone in the country would be a 401(k) participant, and if you look at the diversity across the country, we don’t all look the same,” she says. “For retirement plan advisers, if your ultimate goal is to help people retire, you need to be able to relate to them, and you’re best positioned to do that if you have a diverse team.”