By Ray Pellecchia, FINRA
Even amid the optimism that a new year can bring, problems caused by social and economic inequality will continue to exist with solutions that are unclear and can seem insurmountable. But if you look at them through the lens of our business, it is clear not only that we can make a significant difference, but that we have an obligation to do so.
Within the financial industry, we can look with hope at positive developments such as firms requiring greater diversity on corporate boards. However, the issue of inequality in our industry and nation is massive and persistent:
- The Federal Reserve’s 2019 Survey of Consumer Finances shows that longstanding, substantial wealth disparities between families in different racial and ethnic groups were little changed since the last survey in 2016. In that year, the typical white family had eight times the wealth of the typical Black family and five times the wealth of the typical Hispanic family.
- Only 6.9% of financial advisers are Black or African American; 6.3% are Hispanic or Latino and 8.6% are Asian, according to the U.S. Bureau of Labor Statistics (BLS). Some 82.2% are white.
- The representation among compliance officers is not much better. 10.2% are Black or African American, 6.1% are Hispanic or Latino, 10.5% are Asian and 80.7% are white, according to the same BLS report.
- “There are no Black Commissioners at the Securities and Exchange Commission (SEC) or at the Commodity Futures Trading Commission (CFTC). There has never been a Black Chairman of the Federal Deposit Insurance Corporation, SEC or CFTC,” said the Brookings Institute last September.
If Not Us, Then Who?
“With great power comes great responsibility” — that may be comic-book wisdom from “Spider-Man,” but let’s apply that principle to ourselves. We work in a huge and powerful industry of more than 6 million people, standing at the center of wealth creation in the richest nation in the world. In 2018, finance and insurance represented 7.4% (or $1.5 trillion) of U.S. gross domestic product. Our business and markets drive the world’s greatest engine of capital raising and economic growth. The industry advises investors large and small on opportunities to participate in that growth, effects billions of dollars’ worth of transactions daily and endeavors to do all of that in a sound and fair manner.
In short, there is no industry better resourced and positioned to develop ways to extend prosperity across society. If we truly believe that our business contributes to a higher standard of living, then it is incumbent on us to help raise that standard for those we have left behind.
Consider our individual obligations as well. The motto of the Security Traders Association, “Dictum Meum Pactum” (“My word is my bond”), conveys the principle of trust that we hold as central to the securities business. I believe it also asserts our accountability to others — you can count on me. Having society rely on us to act justly is a responsibility we freely accept, and surely we must do so now when so much is at stake and we are in a position to help.
Last but certainly not least, those of us who are white men must recognize that because we dominate the leadership and management positions in the industry, real change depends on our hiring, promoting, sponsoring and eliminating barriers for those who are underrepresented.
“Change isn’t just about what our governments should do, what our organizations, such as FINRA, should do, what our teams should do. It is also about what each of us will do as individuals.” – Robert Cook, President and CEO, FINRA
Take A Step Forward Yourself
But how to move forward, exactly? Each of us must plot our own course of action, and my boss, FINRA President and CEO Robert W. Cook, provided a useful example last June, outlining a dozen actions he was taking as part of his commitment to the fight for racial justice and equality. Robert wrote, “Change isn’t just about what our governments should do, what our organizations, such as FINRA, should do, what our teams should do. It is also about what each of us will do as individuals.”
I remember thinking at the time that every leader should do the same, as should I. As part of my commitments for this new year, I will:
- Ensure that any hiring or promotion decisions in which I am involved consider a diverse panel of candidates, and as needed, I will remind colleagues to do the same.
- Continue training to learn more about my unconscious bias and how I can better recognize and manage it.
- Look for opportunities to support efforts by my organization to eliminate barriers and expand opportunity for people of color.
- Increase my volunteering at my local food bank from once a year to quarterly, recognizing that hunger and poverty disproportionately impact people of color.
- Continue reading to better understand racial injustice and my role in it.
- Increase my involvement in our employee resource groups, focusing on activities involving colleagues of color.
- At the end of the year I will review my actions, set out my next steps and invite comment.
I will close with a question Robert asked in his article: What will you do? That is, you must take ownership yourself if we are to make progress. If you need ideas, you can find resources at your firm, industry organization, community or online. The key is to start and to be open to learning along the way.
So while you’re working on your annual resolutions to get in better shape or reconnect with long-lost friends and relations, please consider making one or more additional commitments with this in mind:
“An individual has not started living until he can rise above the narrow confines of his individualistic concerns to the broader concerns of all humanity.” – Dr. Martin Luther King, Jr.
Ray Pellecchia, a Senior Director of Strategic Communications at FINRA, blogs about diversity, inclusion and communication at raypellecchia.com.