Maybe the Workplace Needs Political Neutrality
As I perused a list of rules the British Royal Family must follow, one rule in particular jumped out at me. The Royals cannot express any political opinions. They cannot vote. They can't even speak publicly about politics or run for political office of any kind.
With companies around the country increasingly perpetuating political stances, I thought of how appropriate it would be for companies to take a similar stance to the Royals, by not taking political sides.
A political side we see being heavily pushed at companies is neither Democrat nor Republican, but rather Marxist. The teachings by Frankfurt School academics have evolved into Critical Race Theory, intersectionality, cultural appropriation, and a variety of other academic theories. These theories are disseminated through what you may be more familiar with in the workplace as Diversity, Inclusion, and Equity (DIE).
The Frankfurt School was founded in 1932 as a philosophical and sociological movement with the aim of developing Marxist studies in Germany. After the Nazi takeover in 1933, the Frankfurt School relocated to Columbia University in New York City. The main focus of the Frankfurt School has been Critical Theory, which is primarily focused on critiquing modernity and capitalist society. Failing to attract converts to communism due to capitalism's abundant material wealth, they instead focused on the cultural Marxism of Critical Theory, with the intent of perpetuating populace discontent. Critical Theory divides people via race, sex, and class, with individuals falling into either oppressed or oppressor roles. The many academics who were disciples of the Frankfurt School expanded on these theories in the 1960s and 1970s, putting them into action starting in the 1980s.
To be clear, the implementation of DIE being pushed at broker dealers and the workplace in general is a political stance (progressive leftism). A company is certainly free to impose these theories on employees but should realize there are repercussions to taking sides.
In my field of expertise, financial services recruiting, a financial adviser in a recent interview requested (as he put it) "an alternative firm that is less WOKE." His current broker dealer had required him and other advisers to attend a Zoom conference call that comprised Human Resources staff indoctrinating advisers in the intricacies of DIE. The adviser found this Zoom meeting inappropriate, insulting, and a turnoff, to say the least.
This is not an isolated situation. These DIE Zoom calls have been commonplace at the wirehouses (like Merrill Lynch and Morgan Stanley) for several years, where the advisers frequently refer to Zoom calls as "anti-white calls," but they are newer to smaller Independent Broker Dealers (IBDs). You see this trend in many industries, where large firms are deeper into indoctrinating DIE, small and midsized firms to a much lesser degree, if at all. Further evidence of the intrusion of these theories into IBDs is newly created staffing positions at broker dealers.
In 2020, we saw the first independent broker dealer to advertise a new hire under the title "First Chief Diversity Inclusion Officer." The primary role of this position was stated as "to ensure the corporate workplaces feel safe for everyone." This broker dealer is playing into intersectionality theories, heavily practiced on college campuses that mandate policing people's feelings because those individuals who are established victims (females, minorities, handicapped, etc.) are so very fragile. Everyone must walk on eggshells for fear that someone may say something offensive, which could trigger the oppressed and cause permanent damage to their psyche.
Life is hard, and humans are resilient, not fragile. Through all forms of adversity, we grow, learn, and become stronger...not weaker. Cocooning people from adversity impedes their ability to deal with life conflicts.
Polarization From CRT
Overtly taking political sides to push DIE theories can be polarizing to a large percent of your firm, especially in an industry like financial services, which has been historically heavily Republican because financial advisers are to a large degree cheerleaders for capitalism. Contrary to what some may think, a large percent of the population does not even know about CRT and other social theories.
In a survey done by the Institute of Policy Research, seven out of ten respondents said they were not at all or not very familiar with the concept of Critical Race Theory. When asked how well they think CRT describes how American society works, one in five respondents, or 21%, say it does; 35% say it does not; and 44% do not know. The authoritarian nature of this small percentage of CRT evangelists can be quite intimidating, as they are fervent in their beliefs and are quick to shout down those who disagree with their views with accusations of racist, misogynist, etc. If you need proof of this, just try to speak against CRT at a college campus.
A Politically Neutral Broker Dealer Speaks Out
We asked the CEO of a broker dealer we view as politically neutral several questions as to why he chooses political neutrality and stays clear of promoting DIE.
1. Why do you choose to be politically neutral in the operation of your broker dealer?
CEO: We have formally defined our ideal adviser, and nowhere in there does it mention a political party preference. Our aim is to hire advisers that are client-centric, kind and compassionate, maintain a culture of compliance, and are committed to the financial services industry. Personally, I don't know why a company or a celebrity chooses to make a statement on a highly divided topic. Regardless of which side of the fence you sit on with respect to things like guns, religion, or abortion, you will alienate half your customers or potential customers. Therefore, we have not issued any statements.
2. What are your thoughts with regard to the increased push of woke progressive politics toward broker dealers on topics such as diversity, inclusion, and equity?
CEO: We just hire the right person, whether it is an employee or adviser. If you do that, you'll find a workplace full of talented individuals with diverse backgrounds. We don't need to spend a lot of money and hire someone to create a DIE program to ensure we have a great group of diverse people. If a company really needs a board or individual to oversee a DIE program to explain right from wrong, it needs new executives. More than likely, though, it's just a bunch of virtue-signaling for executives to feel good about themselves and get their names in industry publications.
3. What are your thoughts on ESG (Environmental, Social, and Governance) investing? Is this something you encourage your advisors to incorporate into their investment focus?
CEO: We do not encourage advisers to incorporate ESG into their investments. We are completely open architecture, so we do not promote one investment style over another and have multiple platforms for advisers to choose from to meet their clients' financial plans and goals. Most advisers we speak to have ESG in their toolbox should a client have a desire to allocate some of his portfolio into companies that rank higher, but it's not common. The narrative is being pushed by the current administration and some media outlets, but in reality, most clients are more concerned about ensuring that their investments will fulfill their retirement hopes and dreams.
ESG was questioned not only because it is interlinked with DIE, but because it has been heavily pushed in financial services by Larry Fink, CEO of BlackRock, in his annual letter to CEOs, "The Power of Capitalism." Mr. Fink's sales pitch — "investing with his firm will make you rich and save the world" — is debatable, but what isn't debatable is that using customers' money to advance political objectives rather than their best financial interests is a cut and dried breach of fiduciary duty.
With the political climate increasingly polarized, attitudes toward those who believe differently can be harsh. These conversations can be disruptive to a harmonious work environment. What we should strive for is a neutral space where everyone works together to achieve the same goals.
Jon is the founder of the recruiting firm Henschen & Associates. Since 1999, Henschen & Associates has focused on recruiting financial advisers to independent broker dealers and RIAs throughout the United States.