GUEST BLOG: What Can We Do To Increase Diversity? by Linde Murphy

July 19, 2019

 What Can We Do To Increase Diversity?

During his July 10, 2019, testimony before the House Financial Services Committee, Federal Reserve Chair Jerome Powell was asked "What more can you do as Chair to incentivize diversity within the Federal Reserve System?" In response he said:

We thank you for that question. We put a very high value on diversity. I strongly believe having diverse perspectives around the table leads you to better decisions and having a culture where people are free to speak and will be heard and that goes to all different dimensions of diversity. So we've had, I think, a lot of progress at the Fed. I think I would never say there isn't more to do. There's a lot more we can do. I think we're very focused on that as an organization. I would say in most of my career was in the private-sector. I saw that really successful companies, one of the things they do well is they do diversity well. Because you get better results with diverse perspectives. So we're strongly committed the to that.

Chairman Powell's July 10th comments on diversity in the financial services industry struck a chord deep in my soul.  His answer sounded good but lacked actionable steps to increase diversity.  Everyone seems to accept that we need more diversity in our industry, but no one has yet to propose a workable plan by which we can accomplish that goal.  

As a woman in the industry I have more than a passing interest in seeing diversity take hold. I believe that there is a simple change that can be made to attract and keep more women to the investment industry: Allow all persons to return to our industry, no matter how long they've been unregistered, if Continuing Education requirements are met.  

Women often are the ones who pull back on the career throttle due to care-giving for children or aging family members.  In most cases, this can last years.  I know many women who have taken time to raise children until they are of school age. That's 5 years out of our industry.  

What happens to your licenses if you leave the industry for 5 years?  You lose them.  ALL OF THEM.  It's hard enough to get a job after being out for family care for 5 years, and now the industry dictates  that not only are you starting below where you left, but you are starting even lower  because all licenses you worked so hard to get are now invalid.  You must get fully re-licensed in order to re-join the securities industry due to the rule commonly referred to as "Use-it-or-lose-it".  

You need multiple licenses to perform at the management level.  It's not just one exam to retake, there are multiple rep and principal licenses that would be lost.  It is a long process and a lot of work.  Work that's been done before.  But those individuals who took the time to care for family members are now penalized for taking that time.  Then again, if they don't take the time to care for the needs of others, they may be judged or criticized as too career oriented, lacking empathy and devotion to family.  
It is mind boggling that so many other industries allow you to keep your license and re-start your practice regardless how long your time away.  Of course, there are Continuing Education requirements to meet, but why can't we do this for investment professionals?

There is a review of the rule underway at FINRA and the CE Committee.  See "Regulatory Notice 18-26." I commend FINRA for taking steps to address this issue, but we've talked about this for years.  It's time to make a change and get this done.  While the comment period has ended, you can still voice your opinion.  Reach out to your local Regional Committee Members, the Small Firm Advisory Committee, the FINRA Board of Governors or contact FINRA Member Relations at and request they forward it.  

While I focus on women's challenges here, there are many men and women who have left the industry for one reason or another.  It's unlikely that they will ever return if required to relicense.  How much knowledge and experience are we losing?  How many qualified candidates don't even explore the investment industry due to these barriers to re-entry?  Too many.  Our industry is contracting and aging.  We need to attract and retain diverse representatives.  Making this change will make a difference.  

As a member of the Small Firm Advisory Committee and candidate for the Small Firm Seat for the FINRA Board of Governors, I am always available to answer any questions you may have or pass along your comments to FINRA.  Call or email me at 210-264-6297 or if you'd like to discuss further.    


Chief Compliance Officer
M.E. Allison & Co., Inc.


In 1999, Linde Murphy started in the industry on an equity trading desk in Chicago. Murphy has held positions in compliance, management, sales, operations and business development. Her licenses include Series 4, 7, 24, 27, 50, 53, 63, 65, 79 and Insurance.

Linde Murphy has worked at small firms for the majority of her career and fully understands how small firm employees carry a heavy load of everchanging regulatory obligations. In 2014, she attended the FINRA Institute at Wharton Certified Regulatory and Compliance Professionals on the Small Firm Scholarship. Murphy has spoken at conferences around the country on topics including supervision, anti-money laundering, fixed income markets, senior investors, the CMA process, exam challenges and suitability. 

Linde Murphy currently chairs the FINRA Small Firm Advisory Committee. She has served on the District 6 Committee, where she successfully petitioned for limitations on viewing personal information by former employers and fought for updating registration rules to end "use it or lose it". Her membership on the Regulatory Advisory Committee and the Fixed Income Committee provided valuable experience on rule formation and the importance of clearly explaining how potential rules negatively impact small firms' abilities to service clients. Murphy is currently a candidate for the Small Firm Seat for the FINRA Board of Governors.

NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of Blog