James Gorman, Chairman and CEO of Morgan Stanley, and Kristin Lemkau, CEO of J.P. Morgan U.S. Wealth Management, discussed their companies’ respective efforts to address diversity and inclusion as well as the racial wealth gap during SIFMA’s virtual 2020 Annual Meeting on Monday.
Lemkau outlined JPMorgan Chase’s plan to invest $30 billion over five years to deal with systemic issues contributing to the wealth disparity. JPMorgan also has been holding financial seminars digitally and in its branches to educate customers and non-customers alike, she said.
Gorman said Morgan Stanley has established a diversity and inclusion institute with an external board to review all of the diversity efforts by the company, which also has added a commitment to diversity and inclusion as its fifth core value.
Gorman said the financial-services industry has shown some improvement after starting “from a low base” with regard to diversity and inclusion, but the sector is “not where we need to be.”
“As society, as law enforcement, as cities and states, and as companies, we needed to really take a hard inward look at ourselves and say: ‘You know what? It’s just not good enough,'” he said.
Lemkau said JPMorgan’s $30 billion investment will go toward new housing loans for Black and Latinx borrowers, affordable housing, mortgage refinancing, small-business lending, and philanthropic capital. She said the investment will provide an opportunity to contend with issues such as redlining, a practice in which institutions decline services to people in certain areas because of ethnicity or race.
The goal is to “build education, trust and a relationship” and reduce distrust of financial institutions, Lemkau said. Eighty percent of women want some kind of financial advice, but only about one-third have an adviser, she said, noting the disparity is “even more dramatic” for Black and Latinx households.