DE&I Initiatives: Are They Working?

Retirement advisory firms have been working to implement diversity, equity, and inclusion programs for years, but have they been effective?

Art by Melinda Beck

The business case for increased diversity among financial advisory firms’ staff has solid support. FlexShares’ 2021 diversity research report described how changing U.S. racial demographics and a broadening of wealth ownership, combined with consumers’ preferences for diversity in their choice of advisers, should influence firms’ hiring decisions. The report concluded that “advisers and firms must change in order to meet the needs of a customer base that is becoming younger, more female and racially diverse.”

The report noted several major discrepancies between the gender and racial composition of advisory firms versus the total U.S. population. For example, an estimated 18.1% of advisers were women versus 50.8% of the population. Non-white groups were also underweighted, according to statistics cited in the report:

  • Asian: 4.3% versus 5.9% (advisers versus population)
  • Black: 2.9% versus 13.4%
  • Latino: 5.1% versus 18.3%

Financial services firms have been responding to the business opportunity and lack of diversity in their advisory ranks by introducing diversity, equity and inclusion (DEI) initiatives. The Financial Services Institute (FSI), an advocacy organization for the independent financial services industry, announced a DEI program with nonprofit INROADS. Edward Jones, Fidelity, OneDigital T. Rowe Price and other large firms have also launched DEI efforts recently.

While these plans to recruit people of color and women are laudable, have they been effective? Large national firms have been the most forthcoming with sharing their DEI goals and results. In contrast, the mid-sized and smaller firms contacted for this article, primarily retirement plan advisers who had previously announced DEI programs, declined to discuss their programs’ progress.

That divergence isn’t surprising. Large firms have more employees, which creates additional DEI-hiring opportunities. Their size also makes it more likely that they can devote resources to DEI, including having a diversity executive or team to oversee company progress. Another factor is that many DEI programs are new initiatives that started formally in 2020 or 2021 and consequently have limited historical data on hiring and retention. Despite these challenges, several large firms are sharing their results and providing a sense of how DEI hiring is progressing.

Edward Jones

According to St. Louis, Missouri-headquartered Edward Jones’ 2021 Purpose, Inclusion and Citizenship Report, the firm’s formal DEI efforts began in 2007, followed by the start of its Black/African American Business Resource Group in 2009. In June 2021, the company committed to improve diversity “not just at our senior leadership level, but across leadership in the firm’s home offices and our overall financial advisers by 2025.”

In June 2021, 8% of the firm’s U.S. and Canadian financial advisers were people of color and 21% were women. It its U.S. and Canada home offices’ senior leadership roles, 9% were people

of color and 30% were women. The firm spelled out specific goals that it hopes to achieve by 2025 for its U.S. and Canadian financial advisers, home office general partners and leaders. For advisers, the goal is 15% people of color and 30% women. The targets for home office general partners are 15% people of color and 40% women and 20% people of color and gender parity in the firm’s headquarters.

The company provided a progress update with results as of December 31, 2021 in its 2022 Purpose, Inclusion and Citizenship Report. Among financial advisers, the percentage of women grew from 21% to 22%; people of color increased from 8% to 9%. For U.S. and Canadian headquarters’ leadership roles, people of color comprised 17% (up from 9%) and women were 49%, an increase from 30%. Among general partners at headquarters, women accounted for 31%, with 12% coming from people of color. (The leadership category includes leaders of leaders and leaders of associate roles.)

Fidelity Investments

Wendy John, head of global diversity and inclusion with Fidelity Investments in Raleigh, North Carolina, says the company has been committed to DEI for decades. The firm published its first Diversity & Inclusion Report (D&I) in the first quarter of 2021. “In it, we outlined the deliberate steps we took in 2020 to strengthen our commitment to diversity and inclusion at every level in our organization, and we committed to sharing more information and data about how our firm is making progress,” John said. “We continued our commitment to transparency by releasing our second D&I report in Q1 of 2022, which provided an updated look at workforce demographics and outlined the steps we had taken to make progress toward our commitments. Fidelity plans to release its next D&I report in late Q1 of 2023.”

The company does not disclose its set quotas or targets, John explained, but does measure progress in three areas:

  • Increasing the representation of diversity at all levels;
  • Ensuring inclusion and belonging across the workforce; and
  • Creating new opportunities and value for our customers and communities.

Fidelity’s 2021 report provides detailed gender and ethnic diversity statistics on its employee demographics starting from December 2015, with the data broken out into specific work areas. For example, among the company’s overall global workforce, 36% were women at year-end 2015. That number increased to 38% by year-end 2021. In the U.S., people of color were 28% of the workforce at year-end 2021 versus 20% in December 2015.

John says the company has been pleased to see annual incremental improvements in its workforce diversity, including increased gender and ethnic diversity across leadership positions. That positive trend continued between 2021 and 2022. “We had our most significant year-over-year improvements in representation among our historically underrepresented populations in 2021, with progress in both headcount and percentages,” says John. “Representation of people of color increased from 24% in 2020 to 28% in 2021.  This was the case across business units, grade levels and job categories. Specifically, we saw the largest increases in our Black and Hispanic/Latino segments, both increasing by more than one percentage point and our Asian segment increased by 0.9 percentage points.”

John says that some of the biggest challenges with Fidelity’s DEI program have been balancing the firm’s focus on improving diverse representation within its workforce while ensuring that its inclusion efforts keep pace with that increasing diversity. “We’re being intentional with our efforts to tap new pools of talent to create a workforce that reflects today’s diverse consumers, suppliers, and businesses,” she says.

T. Rowe Price

In 2021, Raymone Jackson, vice-president, head of diversity, equity and inclusion at T. Rowe Price in Baltimore, initiated a three-year DEI strategy. The company set four specific goals to increase diversity by 2025:

  • Women will compose 46% of the company’s global workforce;
  • Women will hold 33% of senior roles globally. (Senior roles are defined as people leaders or individual contributors with significant business or functional responsibility);
  • Underrepresented talent will compose 19% of the U.S. associate population. (This includes Black and African American, Hispanic or Latino, and American Indian); and
  • Underrepresented talent will hold 10% of senior roles in the U.S.

Firmwide, the company aims for 40% of all candidate slates to be diverse, regardless of role, says Jackson, explaining that the firm defines diverse as female representation globally and ethnically for the U.S. workforce.

Hiring results have been encouraging, says Jackson. In 2022 the year-over-year global workforce share of women employees grew 6% to 44.8%. In the U.S., the company saw a 13% year-over-year increase in underrepresented talent to a total of 18.5%. Overall, 66% of external hires in 2022 were diverse, which Jackson attributes in large part to the company’s diverse candidate pipelines and branding efforts.

Looking ahead, Jackson recognizes potential hurdles to reaching the 2025 goals. “We face several challenges,” he says. “[These include] a challenging external labor market, aligning hybrid work practices, supporting associates through challenging external social justice issues, and continuously sourcing diverse candidates, especially in highly demanded technical and investor roles.”


OneDigital in Atlanta also publishes statistics on its DEI efforts. Unlike the other companies cited in this article, OneDigital had a majority of women (67%) in its workforce at year-end 2021. The dispersion of women in leadership roles varied across functions. Among senior corporate leaders and senior field leaders, 31% and 29%, respectively, were women. Percentages for strategic (54% women) and operational (84% women) leadership of teams, functional areas or clients were higher for women than men.

OneDigital also breaks down its workforce by race and level within the organization and provides the change in each category’s percentage from 2020 to 2021. The results reinforce what Fidelity’s John calls the pace of incremental movements, as the changes in non-white employee categories ranged from 0.78% to -0.40% at OneDigital.

OneDigital is also looking to improve diversity through acquisitions. The firm, which has brought on seven retirement and wealth management practices in the past 12 months, says it will look to onboard 10 minority-owned firms by the end of 2023.  In January, it acquired minority-owned insurance brokerage Bradley & Bradley Associates Inc.

Worth the Effort?

The pace of implementing DEI programs can be slow, but the FlexShares report notes that making recruiting more inclusive has led to hiring success, which it considers a key strategic priority for firms preparing talent needs for the next generation. According to the report, more than three-quarters (77%) of firms focused on DEI report success in hiring new professional talent, versus 56% of those firms that are not acting. DEI-focused firms also report strong 5-year retention rates of diverse talent. This can have a meaningful impact on a firm’s bottom line, FlexShares concludes, because less turnover means fewer dollars spent on recruiting, hiring, training and lost productivity.