By Danielle Walker

The tide has turned against diversity initiatives, as they come under fire from the Trump administration and face rollbacks from large corporations. But one organization serving the wealth management industry is doubling down on the importance of diversity, equity, and inclusion efforts. "We need to do a better job of informing diverse communities that there's a place for them in the financial services industry," says April Ferrell, who is executive director of the Investments & Wealth Institute's foundation and is also the organization's head of global sales. That includes "whether you are on the advisor side -- whether you get into it as a career -- or you are the client," she says.

Speaking with Barron's Advisor, Ferrell, 48, discusses how women and people of color remain underrepresented among financial advisors. She notes how the IWI Foundation's scholarship program is helping members of underrepresented groups pursue IWI credentials such as the Certified Investment Management Analyst (CIMA) that can help them advance in their careers. And she explains why the largest and most successful wealth management practices tend to be the most diverse.

Your role is two pronged, as head of sales at the institute and head of IWI's foundation. What are your priorities? My role at the foundation is to basically put it on the map -- to make folks aware of it, to recognize that there is a foundation with the institute around the certifications. And to ensure that the financial services industry is aware of what we do for financial professionals.

Before joining IWI in 2023, you worked in the advisor conference business at Barron's as well as at investment firms Dreyfus and J&W Seligman, and you earned a CIMA. How did the designation help you? I'm not a product of the scholarship, but I've got to tell you a story. When I first went to pursue my CIMA, my husband said, "Wait. You're going to spend how much money on what?" My husband's not in the industry; he's in the architecture world. He's like, "You're spending how much of our down payment on our house for what kind of certification?"

It's put my career on a trajectory that I would have never thought it would have. I pursued my CIMA at the age of 24, so two years out of college. Ever since, it's opened doors tremendously. Even with Barron's. They were looking for someone who could navigate the financial services industry easily. With my experience with two asset managers before Barron's, and the CIMA designation, it opened the door for me.

For the trajectory of a financial advisor, it puts them out in front of clients that they would have never been in front of. We're talking about high-net-worth clients, ultrahigh-net-worth clients. Their issues and challenges are more complex. There's philanthropy involved, taxes, business ownership, and the liquidity of the businesses that is involved. The IWI designations allow advisors to get in front of these clients with these more complex issues to build their practice, build their clientele, and advise these ultrahigh-net-worth clients so they have the outcomes they seek. [In addition to the CIMA, IWI certifications include Certified Private Wealth Advisor (CPWA), and Retirement Management Advisor (RMA).]

The average advisor that may not have these designations cannot put themselves out there in front of these types of clients to advise them and really walk them through what's best for them. Once they have this designation behind their name, it puts them in a class by themselves. What the client feels is, "This advisor understands my needs."

Cerulli Associates' data show that large diversity gaps remain in the industry. What is IWI doing to address this? The financial advice profession remains overwhelmingly dominated by the older white male. While men represent 49% of the U.S. population, they make up 82% of financial advisors.

Women, who make up 51% of the population, only make up 18% of financial advisors. For Hispanic and Latinos, they only represent 5% of the advisor population, despite making up over 18% of the U.S. population. So that's a huge gap.

Black and African-American advisors make up only 3% of the advisor workforce, compared to 14% of the population. Asian advisors represent 4% [of the workforce], while comprising 7% of the U.S. population.

We award these scholarships to close those gaps so that everyone has an opportunity for financial advice in the industry. [Since 2020, when IWI's scholarship program began, it has awarded over $1.6 million in scholarship funds across approximately 900 recipients. Underrepresented groups include women, ethnic, and racial minorities, veterans, the LGTBQ+ community, and individuals with physical or cognitive disabilities.]

You shared that the professionals who receive, or are pursuing, IWI certifications each year mirrors representation across the industry. Can you tell me about the diversity of IWI's intake group for certifications? Yes, and we continue to see an increase in the underrepresented groups that are applying for these scholarships. Separately, our data show that while Hispanic and Latino professionals represent 5% of the advisor workforce, they accounted for 7.6% of those who received or were pursuing IWI certifications in 2023, surpassing the industry average. For Black or African-American professionals, the candidate intake for IWI certifications was 4.7% of that 2023 cohort.

Do you see a connection between diversity and practice size? What's happening, particularly with advisor teams, is the more diverse an advisor team is, the bigger their practice. In other words, they are able to identify with every and all clients out there. They are building their practice and expanding the pie, if you will, to be able to address the different needs, different challenges, different issues of the U.S. population as the advisor grows older and starts to build those succession plans.

Why do you think the diversity gaps in wealth management haven't meaningfully improved? The advice world should be open to everyone. Up until recently, the advice world has only been open to the wealthy.

There are some advisors out there that have a threshold or minimum in order for them to work with you. But there are advisors out there who work with the mass affluent. I think in order to close that gap we need to be informing the diverse community that there's a place for them in this industry where they can get advice, to help them navigate their finances, their savings, their retirement income. There's a place for them.

In saying all of that, financial advisor employment is expected to grow by 17% from 2023 to 2033, according to the Department of Labor. That's well above the average growth of other occupations. What we should be doing -- and IWI will be at the forefront of this -- is teaching these diverse communities about these opportunities. We need to do a better job of informing the diverse communities that there's a place for them in the financial services industry. Whether that is on the advisor side -- whether you get into it as a career -- or you are the client.

What do the changing demographics of the country mean for the future of advice? I always try to follow the smart minds, and Larry Fink, the CEO of BlackRock, said [ in a letter to investors]: I don't want BlackRock to just be the go-to retirement firm for the affluent. I want it to be for all people. I take that to heart. I do think that with the changing demographics of the United States, and what's going on here in the country, it's going to be that much more important to do things like what Larry Fink was [saying]. How do we match that from the financial services advice perspective? Basically, that is by getting more of the diverse [population] involved in financial services to fill those gaps.

I think about some of the examples of where we've given scholarships to folks. One veteran has gone on to focus his practice on military retirement, Veterans Affairs benefits, and their financial challenges. He was the recipient of an IWI scholarship under the veteran category, and now he's built his practice around the finances of military folks. So that's an example of how these folks use their scholarship and expand that pie in terms of advice.

Diversity initiatives are facing pushback, and many DEI programs are being eliminated. How will that affect the work being done by industry organizations like IWI? It affects us tremendously. I believe...we will continue to present these scholarships as best we can. Even under the turmoil that programs may [be facing], we will put our best foot forward with remaining status quo and affording these underrepresented communities with the opportunity to pursue these certifications that we believe will elevate the financial services industry across the board.

That is basically our mission with the foundation: to elevate and expand the advice and financial services industry across the board by giving all people the tools that they need in order to be successful in their practice. We will stand tall. We will be there. That won't detract us from continuing our mission.

Thanks, April.

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February 25, 2025 15:27 ET (20:27 GMT)

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