To help diversify its workforce, Charles Schwab’s corporate foundation is establishing a $3.5 million endowment to support Black college students pursuing careers in financial planning.
Any Black student majoring in financial planning is eligible to apply for the two-year scholarship program. Students accepted will get approximately $20,000 in scholarship funds, $10,000 for their junior year and $10,000 for their senior year. Recipients will also be encouraged to apply for internships at Schwab, “which could help inspire a future career in financial planning,” the company said in a statement about the endowment announced Monday.
“This endowment is designed to have a long-term impact on creating career opportunities for Black employees in the industry and enhance the diversity of financial planning majors. In working closely with universities near our employment centers, we believe we can help open new possibilities through financial assistance, mentorship, professional development, and industry experience,” Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation, said in the statement.
Weeks after the death of George Floyd in May, protests continue across the country calling for justice, an end to systemic racism, and support of the Black Lives Matter movement. Last month, some financial advisors were frustrated by the amount of time that passed between Floyd’s death and a public condemnation of racism by advisor organizations, which hold themselves out as advocates for minorities in the profession. Several companies and organizations issued official statements immediately or shortly after.
Meanwhile, the protests also reinvigorated calls for financial services companies to become more inclusive and diversify their workforces. The wealth management industry is failing to attract enough students and young professionals to replenish its overwhelmingly white, male workforce. An “unconscionably low” number of certified financial planners are minorities and women.
In hopes of changing that broadly and within their own walls, some companies, including Schwab, have created scholarships and contributed to other philanthropic funds.
At Schwab, 32% of its 21,800 employees are minorities; 68% are white, 13.1% are Asian, 9.9% identify as Latino, 6.2% are Black, 2.3% are multiracial, and 0.5% are other races or ethnicities. According to the company, 25% of managers and 14% of officers are minorities. Women represent 38% of employees, roughly the same percentage throughout management levels.
“Our record of inclusion and levels of diversity are positive in many areas in which we operate. Our efforts are widespread and include supporting Employee Resource Groups, and extending Schwab’s appeal as an employer and provider of financial services across diverse communities throughout the country,” Schwab President and CEO Walt Bettinger penned in a recent letter.
In the announcement about the new endowment, Schwab-Pomerantz said it is important that Schwab’s employees reflect the people and communities they serve.
“To help make that a reality, we need to encourage more underrepresented students to choose a career in financial services. We believe programs like this scholarship endowment can help by creating educational opportunities that can break down barriers and open up new possibilities,” she said.
Schwab also recently contributed $500,000 to fund scholarships at Bethune-Cookman University, North Carolina Agriculture and Technical State University, and Prairie View A&M University, three Historically Black Colleges and Universities or HBCUs.
Together, Charles Schwab and the Schwab Foundation donate about $7.1 million annually. Last year, 2,844 nonprofit organizations were recipients. Chuck Schwab, the founder and chairman of the namesake company, and his family have a foundation separate from the corporate foundation.