CFP Board Outlines Best Practices to Retain Diverse Talent

Now that many have recruited diverse talent, financial firms should prioritize retaining those workers by implementing strategic tactics to create a culture of retention, according to new research and guidance from the Certified Financial Planner Board Center for Financial Planning.

The CFP Board’s report, “Creating a DEI-Driven Culture of Retention in Financial Planning,” found that the financial planning profession has made meaningful inroads in attracting younger, more diverse talent, but it should also aim to foster a culture of retention. Tactics should include areas such as articulating a vision, ensuring equitable hiring, offering leadership development and clearly defining career paths, among other initiatives.

“While it is essential that firms continue to seek diverse, qualified talent, it is equally important for them to implement strong retention strategies that will sustain the profession’s growing diversity in the long term,” the CFP Board reported. “This is particularly true in the post-pandemic era, as employees seek closer alignment between their values and those of a prospective employer, in addition to greater flexibility, compensation and employer-provided benefits.”

In order to retain talent, the CFP Board suggested that senior leaders articulate their vision, explaining the “why” behind certain organizational efforts. They should also develop an equity lens, a process to assess how a policy might impact underrepresented groups.

Hire Right

Firms should also ensure equitable hiring by creating clear job postings and expanding recruiting networks, according to the report. Hiring processes that employ a diverse panel of interviewers and set skills-based, consistent rubrics for evaluating candidates will create better diversity among new hires.

Building positive relationships between management and staff is vital for retention, according to the CFP Board report. Firms must ensure management is trained in inclusive leadership skills and cultural competencies that will help managers cultivate trust with their employees.

Providing a transparent career map should lead to equitable opportunities for advancement, as employees will better understand how to grow within their firm. Clearly defined career paths can also support succession planning and development of future, diverse leadership.

Career Development

The report continued to outline how important professional development is to a financial planner’s career path. In addition to more traditional learning opportunities, mentorship, fellowship and sponsorship programs can offer strong support systems and more personalized advice for young professionals.

Measurement of retention-focused metrics can help firms track their progress toward diversity and identify areas that could use improvement, according to the report. These metrics should be paired with an accountability system, which will connect equity goals to decisions on bonuses and promotions.

“A culture of retention emphasizes integration. It promotes continuous learning, curiosity, and creative thinking among all employees,” the report stated. “It must be embedded throughout an organization—from the recruitment and onboarding process to mentorship and professional development programs—and supported by a system of accountability. And while managers, supervisors and company executives are responsible for building and maintaining a culture of retention, employees must have mechanisms for providing feedback and other input that help to strengthen that culture.”

Earlier this year, the CFP Board restructured in part to further its work advancing diversity, equity and inclusion in the financial space. The Washington, D.C.-based nonprofit split itself into two entities, one focused on its core work of financial certification and the other focused on expanding CFPs’ professional diversity for the “benefit of the public.”

The retention strategies and best practices presented in the CFP Board report were compiled from independent research, a review of existing literature on the subject and case studies provided by financial services firms.