The Bottom Line? DEI Can Have an Impact on Your Practice

Diversity, equity, and inclusion (DEI) has become a focal point for businesses in recent years, and financial services companies are no exception. Research from management consulting firm PwC found that 85% of CEOs in financial services believe that promoting diversity and inclusion helps enhance business performance.¹

However, building diverse teams where people feel welcomed and are treated fairly and valued requires a purposeful approach. As you work to embrace these principles in your practice, it’s essential to understand each concept, why an inclusive culture matters, and how DEI can affect your bottom line. 

The acronym DEI represents three words, each describing an attribute of an engaging workplace where employees are empowered to contribute their best work. Healthy and vibrant workplace cultures embody each of these qualities.

Diversity: Refers to the population of an organization. An organization that values diversity prioritizes strategic outreach efforts that cast a wider net, resulting in more diverse candidate slates. Ultimately, these organizations will recruit and hire people regardless of race, ethnicity, religion, gender identity, sexual orientation, physical ability, age, or other attributes. However, intentional sourcing, employer brand marketing, and inclusive recruiting are best practices to attract the most competitive candidates for open roles. Truly diverse organizations also take the same approach to finding suppliers, clients, and community partners.

Equity: Refers to fairness concerning how people are treated and their opportunities for advancement, access, and development. Equitable organizations give all team members access to opportunities and consider the unique challenges that underrepresented groups face. These organizations work to identify and eliminate systematic barriers that impact disadvantaged groups and give team members the support they need to be successful. This term is often used interchangeably with equality.

Inclusion: Refers to how welcoming the culture is to people bringing their authentic selves to work. Inclusive organizations value individuals for who they are. These workplaces prioritize psychological safety and encourage team members to speak openly and contribute to the best of their abilities. Inclusive organizations encourage allyship, where team members take equal responsibility for fighting against inequity and injustice.

DEI can also have an impact on an organization’s overall success. Companies that integrate DEI into the fabric of their organizational culture tend to grow faster; make more money; and have more loyal, productive employees.

• Deloitte found that high-growth brands (10% annually or more) are more likely to establish DEI key performance indicators than their slower-growth counterparts.²
• The International Journal of Business Performance Management found a positive correlation between diverse companies and financial performance.³
• Research published in Harvard Business Review⁴ found that when employees feel psychologically safe, they are more loyal and contribute more.

In addition, when employees, advisors, contractors, and other team members can share their unique and varied lived experiences, they can bring fresh perspectives to your practice. This may pay off in a variety of ways, including:

• Identifying new clients, market niches, and other opportunities.
• Helping you understand and create solutions for clients with different perspectives, preferences, and needs.
• Refining your messaging, outreach, and marketing to be more attractive to diverse prospects and clients.
• Attracting top talent, even in a tight labor market.

You can implement DEI initiatives within your practice, regardless of its size. Here are a few places to start:

• Learn about DEI by finding relevant books and articles from reputable resources. Organizations like the Society for Human Resource Management and Great Place to Work Institute have helpful content on building inclusive cultures.
• Talk to fellow financial professionals about their DEI efforts.
• Review your current communication. Do you use gender-, age-, and ability-neutral language? Do images on your website and in your social media reflect diversity?
• Get feedback from your team through surveys and discussions. Share in internal and external communication that DEI is important to you and the practice.
• Make everyone on your team responsible for DEI. Define responsibilities and create accountability by adding DEI efforts to performance reviews.
• Recruit diverse talent through college financial planning programs and professional organizations.

Strong DEI initiatives can give your practice key advantages like a stronger balance sheet, more engaged employees, and faster growth. Any practice, regardless of size, would benefit from these outcomes. Make DEI a priority today to see the impact on your own business.