The Next Generation and Social Media’s Role in Financial Advice

A version of this article originally appeared on Morningstar.com on August 18, 2021.

A recent incident on TikTok shows just how easily, and willingly, the next generation will call out bad behavior.

Last month, an advisor’s racist comments that had been documented by her staff went viral through a series of videos on TikTok. Following the news, LPL, the associated broker/dealer swiftly cut ties with the advisor. This is a clear example of a trend I’ve noticed in my work over the past few years: The next generation of employees will not stand for our industry’s entrenched racism and sexism, and many of our companies are not ready for the shakeup that’s at our doorstep.

First, the main issue: The screenshots of the advisor’s comments are awful, and that behavior, if true, is abhorrent. The racism in this incident is both clear and memorialized in writing so it’s easy to point to as an example. I suspect, though, that this behavior is more common than we’d like to think, and that racist attitudes in hiring practices are often disguised by rejecting candidates because of a lack of “culture fit." LPL did the right thing in cutting ties quickly- showing clients, employees, and advisors that the company doesn’t tolerate racist behavior. I imagine the decision would have been more challenging if the comments weren’t so clearly illegal and offensive.

Racism in hiring (and other areas of business) doesn’t usually show up so obviously, but I know it’s prevalent in financial services. Otherwise, how would our industry continue to be so overwhelmingly white? And though there’s been some progress, misogyny is also still quite prevalent. What is remarkable about this particular incident of racism is how it came to the public eye.

Which leads me to an additional lesson--one I’ve seen reflected in my work talking with women in finance, and one I also see at home with my kids and their friends. It’s a story about the next generation of the workforce. I don’t know the age of the whistleblower, but I’m willing to guess, because they are savvy enough to share with a TikTok influencer, that the whistleblower is younger than 30. And my guess is that the reporter who picked up the story from TikTok and brought it to industry news is also a young professional.

There are three factors that coincide and will absolutely shake up financial companies as a result. In fact, the shake-up has already begun.

Factor 1: Many younger employees have a lower tolerance for bad behavior.

Gen Z and younger millennial employees tolerate a far lower level of abuse and harassment than my generation does. They are keenly aware of equity issues and are likely to speak out about things they believe in. I’ve seen this pattern emerge in my work interviewing women for my articles. Because older generations of women broke down barriers just to be able to work in finance, most kept their heads down and tried to fit in. The next generations made more gains and demanded our right to take up more space. And Gen Z is building on that with minimal tolerance for the harassment and abuse prior generations accepted--or at least dealt with--as just part of the job.

Factor 2: Young employees are digital media natives, accustomed to telling their own stories, immediately and without the sanitizing power of corporate HR, compliance, or PR mediators.

Twitter started to gain popularity in 2007, Facebook in 2008. For reference, if you have a 25-year-old employee, they would have been in middle school around that time. Social media eventually evolved from a place to share personal posts to a decentralized and less-controlled way to find and share news. Combined with the ubiquity of cellphone cameras, anyone can find, film, and share news without passing through media or PR gatekeepers.

I asked Caitlin Cook, head of Community at Onramp Invest, 23 years old and active on social media, to share her thoughts. She said, "Social media is an equalizer; it puts power back in the hands of the individual. Everyone has a voice and information spreads more quickly than ever before. Younger generations that grew up with this technology recognize its power and have taken it upon themselves to harness it for good."

In this more-open media landscape, companies, PR executives, and traditional news outlets are no longer in control of what makes news in finance. Last month’s racism incident is not the first time that the combination of technology and social media sharing has made financial news. Recall that in 2020 Amy Cooper, a portfolio manager for Franklin Templeton, was caught on video threatening to call the police on a Black man out walking in Central Park, and Tom Austin, a venture capitalist, threatened to call 911 to report Black men working out in his building’s gym.

Because of their experience growing up in a culture of social media sharing, Gen Z and younger millennial employees are digital natives who know how to tell their own stories and are accustomed to doing so without gatekeepers, pushing content directly from their phones to the public. It’s what many of them already do daily in their personal lives--a drastically different media experience than most financial executives who might have had formal media training, professional PR guidance, and relationships only with traditional news outlets. Caitlin continues, “within traditionally gate-kept industries such as financial services, social media has allowed for an unveiling of information that might otherwise be swept under the rug. Younger generations are unafraid to use their online platform for what’s right, which will ultimately lead to a healthier and more transparent industry in the future.”

For another powerful example, read Essma Bengabsia’s Medium post about her time at BlackRock, which was self-published on social media, went viral online, and then was covered by the mainstream financial press.

When you couple the generational trend of low tolerance for bad behavior with Gen Z’s ability to tell their own stories using nontraditional media, you can see that finance companies need to pay attention and start listening to employees bringing problems to their attention. And even better--be proactive about building a representative workforce, a safe workplace, and a real community culture.

Factor 3: As a result, hiring practices need to catch up to younger expectations and mindsets.

So, what do our industry's harassment and discrimination problems mean for attracting and retaining talent? As I heard countless times in writing the Do Better Series, financial services companies' unresponsiveness to harassment complaints allows serial harassers to continue working--and harassing people--while the victims leave for (hopefully) safer places to work. Companies need to solve this problem quickly because people are a company's biggest investment and biggest source of value.

The solution here is for companies to listen, especially to young employees, women, and people of color. If an employee from one of those underrepresented groups is reporting harassment, the situation is likely already bad. Reports of harassment, racism, or other abusive behavior are often an indicator of a long-term pattern, which affected companies would be wise to get ahead of. Take the reports as a listening and learning opportunity. Then use that information to build a safer workplace, one where people want to work, and one that attracts top talent.

Younger employees have a different attitude toward illegal, harassing, and abusive behavior at work--and companies are wise to pay attention and adapt.