Financial advisory industry managers should guard against their own unconscious biases, Carla Harris, a Black Morgan Stanley wealth management executive, said this week.
“We are all vulnerable to unconscious bias, and I’ll give you an example of my own,” said Harris, who is the vice chairman of wealth management and senior client advisor at Morgan Stanley.
Harris said she spent months hiring her own team after Morgan Stanley tapped her to co-head the multicultural client strategy group in 2017. After 18 months on the team, Harris said she realized that she had hired only women.
There was “not an ounce of testosterone anywhere,” she said. She made sure her next two hires were men, she said.
Diversity “will not just happen,” she said.
Harris shared her experience on Tuesday at a Money Management Institute-sponsored webcast entitled “Intentional Leadership: Leading with Impact Through Change.”
Company leaders must check for unconscious bias to ensure they succeed in their diversity goals, Harris said.
“Every time you make a people decision, ask yourself why you did that,” she said. Determine if the decision-making factors were based on “feelings or fact,” she added.
If feelings provided the rationale for the decision, such as when hiring an individual, the feelings should be investigated, Harris said. “What have you or haven’t you seen about their skills,” she said, noting that the rationale must be based on facts than feelings.
Financial advisory firms should “over-invest in the success” of the diverse talent they hire, Harris said. That’s necessary to prevent what Harris compared to an “organ rejection” after a transplant surgery.
Firms must also set higher diversity goals compared to their rivals, Harris said, noting she has heard the excuse: “This competitor’s not doing it.”
“We need to think about [diversity] as a strategic commercial imperative and not a 'nice-to-have,'” she said.
Diversity fosters innovation and will propel a company above its competition, she said.
Meanwhile, in June, Marilyn Booker, Morgan Stanley’s former head of diversity, who, like Harris, was among the wirehouse's few Black top executives, filed a lawsuit accusing the firm of hampering her efforts to bring diversity into an organization with senior leaders who are predominantly white men.
Booker’s lawsuit claimed that before the appointment of Carol Greene-Vincent, who is Black, to Morgan Stanley’s 16-member operating committee — the firm’s most senior governing body — 13 were men, 14 were white, and none was Black.
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