According to the Certified Financial Planner (CFP) Board, the class of 2021 marked the most diverse certificate class with the number of females increasing to 21,504 (an increase of 4.2% over 2020) and the number of Black and Hispanic professionals increasing to 4,196 (a 13.8% increase over 2020). That being said, there’s still a long way to go when it comes to increasing diversity in finance.
“The numbers are pretty stark. It’s something like 23% of certified financial planners are women, less than 2% are Black, and then right around 2% are Hispanic,” says Matt Watson, CEO at Origin, a financial planning platform.
Origin partners with companies and employee resource groups to provide financial education to employees who may not have received good personal-finance education growing up. The software company contracts with 230 financial planners worldwide to craft the financial planning content in Origin’s platform and to conduct coaching with client companies. Watson is also focused on diversifying Origin’s network of financial planners so that people seeking services can be served by people who look like them.
Read on for an edited excerpt of our exclusive interview with Matt Watson about Origin’s take on inclusive benefits, the challenges in the financial planning industry, and how to lead a remote team.
Senior Executive Media: Inclusive benefits are a big part of the package you provide for companies. What do inclusive benefits mean to you?
Matt Watson: This trend started probably a decade ago now where companies realized that it was actually in their best interest to support employees holistically. If they could support the employee holistically, they’re going to have someone who’s happier, likely to stay at the business longer, and move through the career progression, and improve diversity at the company. We have seen and continue to see pretty significant investments in the whole person. COVID accelerated that pretty aggressively and [now] work from home and hybrid work has accelerated that. You’ve seen a shift amongst people, leaders, where the conversation has moved from: we have everyone in a confined space, how do we make this confined space a wonderful place to spend eight hours a day, to people aren’t commuting anymore. They’re at home, they have children at home, they’re a little more isolated. Financial markets are crazy.
“What are the other biggest problems that employees face on a daily basis? It’s mental health, it’s childcare, fertility, and financial wellness. Those are the four key things that companies are thinking about when it comes to [employee benefits].”
This trend that started probably a decade ago has really accelerated and so what we’ve seen is the growth of you’ve got your just your health insurance and your 401(k), into what are the other biggest problems that our employees face on a daily basis? It’s mental health, it’s childcare, fertility, and financial wellness. Those are the four key things that companies are thinking about when it comes to the biggest problems.
I think the finance one is an interesting one because it’s the one that really ties all those things together. People who are financially stressed are more than twice as likely to be depressed. They’re much more likely to leave the company, they’re much more likely to not be present at work, so you can’t really solve the mental health problem without solving the financial stress problem. When people have children at home, and now they’re working at home, how do they manage the child care so that they can be productive and still spend time with their kids? At the end of day, it does boil down to how am I going to manage the resources that I have to allow me to continue to be productive. Starting a family is the same thing, incredibly expensive. It’s a huge financial decision. As companies have developed these strategies, I think they’re doing them in strategic ways where it is a stool – you can’t really have two without the third or the fourth. Let’s really bring this all together to have a cohesive strategy where all these benefits are working together to support employees across the spectrum of income levels, life situations, backgrounds, all these things. The average Origin user saves $1,900 in their first month by optimizing their monthly spend. Origin reviewed user analytics and found that after one month of setting a budget, members saved on average $1,900.
Senior Executive Media: How does financial wellness play a role in employee health?
Matt Watson: As it pertains to the DEI conversation, I think that it’s a really interesting one. People’s financial education often comes from family when you’re growing up, community, that’s where people have their first interactions with money…The amount of education that exists across the population has very, very high variability. So you have a lot of people who come into the workforce, and they’re really ground zero when it comes to how do I make what I’m earning go as far as humanly possible.
That was something that we recognized really early on at Origin… One of our core services that we offer is financial planning, where you’re meeting with financial advisors, certified financial planners, to talk about money. As we started rolling the product out, one of the things that we saw was that it’s a very personal conversation, and people want to talk to folks who come from similar backgrounds that they can really relate to. As we kept going further down that route, it was pretty eye-opening to see the lack of diversity that existed in the certified financial planner community… You have a pretty significant mismatch when that is not representative of what the employee population looks like, so now you’re in this dynamic where people who are beginning that financial journey, don’t have a place where they can go that where they even feel comfortable starting that and so we worked really hard to try to solve those diversity issues. We started a scholarship fund last year where we pay for folks from underrepresented backgrounds to become certified financial planners. The scholarship program awards 10 people annually with funding to prepare for and sit for the CFP exam. This program aims to help close the education gap. In addition to that, we’ve really worked hard to make our own certified financial planner base very diverse.
Senior Executive DEI Think Tank is a criteria-based membership community for chief diversity officers and senior-level DEI leaders at large organizations to share difference-making tactics, trade valuable resources, and seek the counsel of experienced peers in a private, confidential setting.
Do you qualify?Senior Executive Media: What does your network of financial planners look like?
Matt Watson: We have a lot of diverse folks who come in to use our product, and we want to be able to present them with a certified financial planner that is also diverse. If you don’t think about it at all, you’re going to, on average, have the average of what the population is. If we took no thought and just went out and built [a network of financial planners], you would end up with something that looks similar to the one the 1.8% and the 2% for Black and Hispanic and 23% for women. But we’re really intentional about that to really try to solve that core problem, which is an educational opportunity and a comfort challenge for the folks who are looking for advice. If we can’t bring them people that help them that they feel comfortable with, you’ve lost already. Our team has 230 members worldwide (107 of those in the U.S.), and is 28% female, 28% people of color (POC), 9% female and POC, and 2% LGBTQ.
Senior Executive Media: Do you have any strategies for diversifying the hiring pipeline?
Matt Watson: For director and above roles, we mandate diverse candidates through our interviewing process to make sure that we don’t end up with a disproportionately one-sided company from a leadership perspective. Then we run analytics on the employee population to ensure that we continue to be a diverse business. The self-reported results from a [staff] survey we did in February noted that 23% identify as LGBTQIA+, 5% as Native American, 5% as African American, 11% as Asian, 3% as living with a disability, and 34% are first generation college graduates.
We have a particularly high representation of engineering women… I think that just being intentional about it from the beginning of the business has allowed that to grow. What ends up happening is the people that you bring in make great referrals. If you start off with a diverse group from the get-go, that just becomes a part of the fabric of the employee population, and so becomes self strengthening in a way as you grow the business. I think the opposite is true as well. I think there’s a lot of research that shows that people, ultimately, are drawn to hire folks that look like them.
Senior Executive Media: Going into Q4, do you have any predictions of what you think leaders are going to be worrying about or thinking about as they lead their teams?
Matt Watson: Right now is kind of an intimidating market. This is the first time in a decade where you’re seeing governments globally really put the brakes on the economy like this is a global thing. Central banks across the entire world are saying this went too far, we need to really slow things down right now. When that happens, the easiest reflection of that is the stock market. As interest rates rise, the prices will fall, and what the government is trying to do is really try to slow down demand for services. Ultimately, that will have a ripple effect through the economy. I think that leaders really will have to be cautious about where they’re spending and how they’re allocating capital across the business, across the people experience.
What we have seen to date is that companies are increasing what they’re providing to employees simultaneously to either maintain or reduce their workforces. What I mean by that is that companies are fully committed to the employee experience, and that is something that they’ve recognized as absolutely incredibly important. I don’t anticipate that changing, but I do anticipate companies really being cautious and changing the hiring process that has been implemented over COVID. Just seeing a slowdown, somewhat of a pause, seeing what happens with the global economy as we enter an unknown territory with markets.
Senior Executive Media: Have you seen companies increasing their benefits to match inflation rates or anything like that?
Matt Watson: I think it’s a mix… I think it depends on where [businesses] are in their growth cycle – if they’re really trying to grow aggressively, if they’re maybe a more established business where they think that they can weather the storm. We’re seeing a continued investment in people experience. I think companies that maybe overextended themselves a bit over the last two years are having to reassess in a different market environment. The thing that I have been most astonished by is the new hundreds of companies – none of them are pulling back on the benefits, even while they’re making adjustments to their workforce. I think that that’s proof positive that the benefits structure is very, very important to keeping employees engaged at the business.
