Exploring the Path to a More Inclusive Financial Planning Industry
By Catherine Andrews
People of color (POC) have long faced systemic hurdles to success across industries — and the financial sector is far from an exception. In fact, less than 3.5 percent of all 80,000 Certified Financial Planners (CFPs) are POC. This alarming statistic means that only 2,800 people out of 80,000 are blacks and Latinos; numbers that highlight a stark racial divide in the world of financial planning.
Despite the promising progress America has made in the last decade to move forward and give POC better platforms and opportunities, there is still a long way to go in the financial planning industry. These numbers stem from a variety of causes, none of which are straightforward.
One glaring area that needs improvement is the lack of financial literacy among POC. Financial literacy is the ability to understand how money works and make informed financial decisions. From the get-go, the country’s education system is notorious for being unable to teach financial literacy to students across the country. In fact, a survey published earlier this year found that some 63 percent of Americans couldn’t pass a financial literacy quiz, while high school graduates from a total of 27 states were unable to finish K12 with adequate financial literacy.
Combine these statistics with how POC students have long been underserved in public school districts, and you can already see how POC are the most affected even decades after they finish school. The Huffington Post reports that African Americans have higher debt delinquencies along with comparatively low savings. POC are often forced to use expendable income to help their children or to clear debts, or prefer to give it to their church, instead of saving for their future.
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