Brokerage firms say they are trying to hire more women and minorities to sell to the growing number of prosperous people in these groups.
To recruit such employees, many companies are using targeted help-wanted ads and building closer ties to minority professional associations.
"There is definitely more diversity now than back in the 1980s or 1970s," says Brent Watson, a financial adviser at Merrill Lynch & Co.
But the actual number of women and minorities working in brokerage firms is still small.
In a notable confession of the industry's flaws, Joseph Grano, president of PaineWebber Inc., admitted, "We have not done a good job as an industry in this regard, though there have been many attempts, and lots of money thrown at the problem.
"We have a hard time in attracting minorities," he continued. "And part of that is not being able to show them a pattern of success."
With U.S. demographics changing, the securities industry has a vested interest in improving its mix of employees.
The Securities Industry Association estimated there are some 800,000 largely untapped investment customers in women-and-minorities market. The trade group, along with the National Association of Securities Professionals and the Securities and Exchange Commission's Securities Industry Committee on Equal Opportunity, is wrestling with the diversity problem.
At an SIA meeting in November, the group's diversity committee discussed opportunities in the new investor market and offered to show firms how to tap it with marketing, product development, recruitment, and other strategies.
PaineWebber has several initiatives under way. Each business unit has its own diversity plan, and the company as a whole has a program to recruit promising female and minority graduates.
The firm also has plans for satellite offices in minority neighborhoods.
For its new branch office in Flushing, N.Y., home to many affluent Asian-Americans, PaineWebber expects to quickly expand from four full-time brokers to as many as 15. Nearly all will probably be Asian-American, it said.
McDonald & Co., based in Cleveland, has also aggressively pursued women and minorities through community-based organizations and professional associations such as the National Black MBA Association and the National Society of Hispanic MBAs.
The firm has 36 employees who are members of the Hispanic MBA group, which pushes for equal opportunities for young finance professionals in what it calls "an often hostile environment."
Despite these efforts, some diversity advocates are critical of the industry's record in hiring women and minorities.
LaMonte Owens, a Philadelphia recruiter specializing in minority candidates for jobs in financial services, said he is "still talking after 30 years about diversity recruiting. Obviously, someone is not serious."
Mr. Owens said he blames the sluggish pace of change on a lack of commitment from some corporate leaders. He also said consolidation has affected the hiring of women and minorities.
"Everything is on hold due to restructuring and downsizing," he said.
Howard University, a predominately black college in Washington, has long played host to brokerage firms scouting top recruits. But Rufus Robinson, Howard's assistant director of career services, said less prominent black schools do not attract the kind of attention that Howard does.
"There are some (firms) that will only come to Howard," he said.
At least one academic study argues that the recruitment of minorities and women contributes to the bottom line in very real ways.
In a recently published article, Professors Stacy R. Kole and Glenn MacDonald of the University of Rochester's William E. Simon Graduate School of Business said they had found that businesses profit when employees and customers share personal characteristics.
"People of similar types communicate at a lower cost," because it takes less time to make a sale, Ms. Kole said.
Of course, this model can also be applied to shared characteristics aside from race and gender, Ms. Kole said, such as alma maters or parenthood.
Kevin Carter, director of diversity and business development at McDonald & Co., said the industry itself has to better communicate its appeal to hesitant job seekers.
"Our principal job is to show what it's like to be a securities professional, and the excitement of that," he said.
Merrill Lynch's Mr. Watson said his company likes to hire candidates who have come up through the ranks of respected sales-training programs at blue-chip companies like IBM.
New recruits then face training programs at the brokerage firms lasting about two years. New hires must also prepare for grueling licensing exams and make hundreds of cold calls a day to fill commission quotas.
Many female and minority securities professionals question whether working for brokerages in retail sales is the best way to further their careers.
In St. Louis, Eileen Dorsey said she is happy she chose to pursue a more independent career as a certified financial planner.
"The typical transaction-oriented broker is becoming a dinosaur," Ms. Dorsey said. "Investors are changing, and they want more of a relationship."