In recent years, companies across industries have rightly turned their attention to increasing diversity and inclusion in the workplace. The push to diversify is more than a “feel-good” endeavor—reams of recent research show that more diverse teams perform better across a number of metrics, including financial ones. In 2015, McKinsey’s seminal research, Diversity Matters, found that companies that boasted the highest levels of gender and racial/ethnic diversity were 15% and 35% more likely, respectively, to have above-average financial returns. In subsequent research conducted in 2017 and 2019, that continued to be true—and in fact, the likelihood for above-average profitability of the most diverse teams increased.
Diversity and Financial Planning
Historically, the financial planning industry has remained stubbornly homogenous, and progress has been slow. According to the CFP Board’s 2019 paper Why Diversity Matters, women represent 52% of the overall population but just 33% of all financial advisors and 23.2% of CFPs. Likewise, African-Americans represent 13% of the population but just 8% of financial advisors and 1.51% of CFPs. Such underrepresentation doesn’t just feel wrong—it’s also bad business in a nation where people of color will comprise the majority by 2045. As the paper posits, “[w]ith the profession facing an impending exodus of employees as its workforce continues to age and retire, we have a significant opportunity to work with and empower women and communities of color who are the demographic engine of the nation’s progress.”
At K&B, understanding and acting upon that opportunity is core to who we are. Our team is small, passionate, and diverse—we hail from different backgrounds and ethnicities, and we each carry different perspectives that shape our firm’s culture. Fifty percent of our partnership is female—and in an industry dominated by white men, we celebrate how much we stand out.
“I recall going out to Christmas dinner with the team, and someone approached and asked if we were a media team because of how diverse we were,” said K&B Operations Manager Joyce Chan. “He was surprised to learn we were a finance team.”
Diversity has been an organic part of our culture since our founding. Sheila Baird, K&B co-founder and Chair, was one of a very small number of women to work on Wall Street in the 1970s. Her pioneering laid a solid foundation of diversity for the firm, which has naturally grown over the decades.
“We’ve hired smart, good people, and they’ve stayed,” explained K&B Partner Scott Kimelman. “We never thought about what benefit we’d get from being diverse—we’ve just become very diverse organically.”
Though we did not engineer our diversity for the sake of its upside, we have benefited from it—and we hope our clients have, too. For decades, we’ve known—and now, others in the industry are discovering—that diversity is an advantage. Here’s why.
It builds trust
We’ve said it before, and we’ll say it again: personal finances are just that—personal. Making decisions that affect your family’s financial future is difficult, and there’s no one-size-fits-all approach. That’s why we aim to meet our clients where they are and learn as much about them, their preferences, and their goals as we possibly can.
The journey we take with our clients is a personal one, and it’s predicated on a deep foundation of trust. “The financial planning process is emotional,” said K&B Partner Yasmeen Mock. “You can empathize better when you have more shared experiences. Our diversity helps us do that.”
It encourages creativity and innovation
It may sound counter-intuitive, but it’s true: one of the worst things a team can have, particularly in our industry, is universal agreement. “Our diversity allows for good discussion as we invest,” said Yasmeen. “It’s diversity of thought that makes the discussion robust.”
Research corroborates that point. According to McKinsey, “diversity fosters innovation and creativity through a greater variety of problem-solving approaches, perspectives, and ideas. Academic research has shown that diverse groups often outperform experts.”
At K&B, we know that our team’s diverse approaches to planning, problem-solving, and investing are our strength.
It attracts good people
Companies that reflect a diversifying world, and which practice their values of diversity and inclusion, are increasingly attractive. At K&B, we’ve found that our culture and principles have attracted the types of people we and our clients want to work with. We’re confident that our commitment to diversity will continue to help us hire talented personnel who can serve our clients with empathy, respect, and trust.
At K&B, diversity is not a fad—it’s an integral part of our lifestyle. We’re proud of the values we organically espouse, and we’re confident that our differences are a key part of our team’s strength. If you’re interested in learning more about our personalized approach to investing, don’t hesitate to reach out today.