JPMorgan Chase’s wealth management arm has an ambitious plan to significantly expand the ranks of Black and Latino financial advisors, by aligning itself with predominantly Black higher education institutions to train and hire hundreds of candidates by 2025.
In an announcement on Friday, the firm — which manages over $3.2 trillion — will partner with Historically Black Colleges and Universities (HBCUs) over the next several years to promote wealth management as a career path, with the goal of hiring 300 Black and Latino advisors.
In pursuit of that objective, JPMorgan Wealth Management will provide students with information about careers in a segment of the finance industry where people of color are underrepresented, providing a mix of scholarships, specialized training and licensing.
“Wealth management has two business problems,” Kristin Lemkau, CEO of JPMorgan U.S. Wealth Management, explained to Yahoo Finance in an interview.”One, it doesn’t have enough diverse clients and two, it doesn’t have enough diverse advisors. Both are problems that need to be solved.”
According to data from the Certified Financial Planner Board of Standards, last year saw a historic jump in the number of Black and Latino CFP-certified advisors. However, the two ethnic groups only account for less than 4% of over 86,378 licensed CFPs in the business — well below their representation among the general public.
“We’ve made progress but …incrementalism just won’t do it,” Lemkau told Yahoo Finance. “This is the first flag we’ll throw down in terms of what we want to commit” to improving the industry’s representation, and hiring more Black and Latino talent, she added.
JPMorgan’s drive to recruit and prepare more students of color for careers in wealth management comes on the heels of the bank’s recent announcement of a separate five-year plan that would commit $30 billion to boost homeownership, increase banking and provide capital to Black and Hispanic borrowers.
It also coincides with a multi-pronged effort to address historical inequities that have been amplified by a year-long protests against racial injustices and inequalities. The wealth gap between races means that average white wealth is nearly seven times greater than its Black counterpart, according to data from the Brookings Institution.
“We will never bridge that wealth gap if we don’t get more people invested and invested earlier,” Lemkau said — adding that ideally, she’d like to see the program hit its target early, “and accelerate it.”
According to a release, the firm’s plan includes giving “multiple internal support and development resources” to potential advisors of color, and matching them with senior executives to foster promotion and mentorship.
Lemkau told Yahoo Finance that, among Black and Hispanic college students, she wasn’t certain that wealth advisory was even on their radar as a career path — and “it’s a really important job. I won’t be able to grow my business if we’re not bringing on more clients [and advisors] able to participate in this industry.”
Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek
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