A study produced by The American College Center for Economic Empowerment and Equality, titled Black Women, Trust, and the Financial Services Industry, bears this out. The study, which was conducted in 2021 and involved 3,500 middle-income Black women, found that 60 percent of participants had difficulty finding financial professionals or advisors they trust. Lack of trust was the second most cited reason for not accessing financial advisory services, just behind the services being too expensive. The study also found that discrimination is impacting the access Black women have to wealth-building tools—58 percent of study participants believe their racial identity affects how they’re treated by financial services professionals more than their gender. The research also underscores that the way the financial services industry engages with the Black community is often more transactional than advisory. That’s a lot to unpack. But one of the key takeaways is that there’s still much work to be done to narrow the wealth gap in a way that meaningfully benefits Black women in this country. But, as three Black women wealth advisors recently explained, these statistics do not have to define your money story. Here’s their advice for proactively engaging in wealth building—including finding a financial advisor you trust and making the most of that relationship—as well as taking steps on your own toward financial empowerment. Part of making that happen, however, involves Black women being able to connect with financial advisors they feel comfortable working with in the first place—a task that can be daunting for anyone, says Andrea Koryn Williams, a wealth management advisor with Northwestern Mutual. “Financial planning is really esoteric for anyone and when you’re dealing with a professional who speaks in a lot of jargon, it can be overwhelming,” says Williams. “It’s an obstacle for most people. And when dealing with people who are not from your community, it can feel like it’s difficult to get what you need.” The key, however, is to not let these challenges derail your efforts to find someone you can work with, says Dominique Broadway, an award-winning financial advisor and creator of the Finances Demystified Bootcamp. “Very often, as Black women, we are not targeted by financial advisors,” says Broadway, who focuses her practice on helping people realize their financial dreams. “However, don’t let this be an excuse not to seek out financial advisors.” “A board-certified CFP is going to be a fiduciary and must provide unbiased, comprehensive advice,” says Williams. She also suggests interviewing several professionals in order to find a professional who’s the right fit for you and your needs. Some of the questions Williams suggests asking when screening potential advisors include:
What is your philosophy around planning, risk management and investing? How often will we review my financial plan and goals? How do I pay for the services being provided? What happens when my circumstances change or if I have complex needs?
It’s also a good idea to ask for referrals from family members, friends from college, church friends, or other common interest groups. “While there is no one way to decide if someone is trustworthy, I would advise asking for feedback from those who have worked with this financial advisor and gone through their process already,” says Williams. Simmons, author of The Unlikely AchieveHer workbook and founder of BRAVE Consulting, a women’s empowerment firm, retired at 41 years old after amassing $900,000 in investments. She now focuses her time on working with other women, helping them to become financially independent. “When I changed my mindset from spending to saving to investing, everything changed for me,” says Simmons. “I shifted from fear to confidence with investing because I took time to educate myself.” As part of this effort, Simmons suggests learning all you can about retirement accounts, how they work, what the IRS contribution limits are, and how they reduce your tax burden. After that, says Simmons, start investing and know that no amount is too small when getting started. “Many workplaces offer tax-deferred accounts, but the vast majority of women are not taking full advantage of these benefits to build wealth,” says Simmons. An added benefit of taking the time to educate yourself about these topics is that you will be savvier and more well-informed when meeting with a financial services professional. “The best way to make the most of a relationship with a financial advisor is to know your goals and have some knowledge about the stock market and retirement accounts,” says Simmons. “One of the best ways for Black women to actively build wealth is to start understanding all of the ways that you can build wealth,” says Broadway, echoing a sentiment all three women emphasized. Williams dives a little deeper on the subject, explaining that there are multiple pillars to wealth and they include entrepreneurship, real estate, investing, and insurance. “Building wealth is not about picking one thing that will significantly augment your situation,” Williams explains. “It’s about being diversified.” It’s important to incorporate each of the pillars into your overall financial strategy (or as many as possible), to manage risk and make sure you’re not heavily allocated in just one of these areas. Real estate, says Williams, is a significant wealth accumulation tool. “Whether you’re purchasing a home for primary use or as an investment, appreciation and gains are almost inevitable if held long-term,” she says. As for investments and insurance, they work dynamically together to satisfy a well-balanced financial picture, says Williams. Investments work offensively to help you accumulate for goals, such as retirement, and insurance can help you plan for the what-ifs in life. “Black women should fund both insurance and investments at suitable amounts as determined by a financial professional,” she advises. “Most financial advisors are licensed in both insurance and investment and will not only be able to make a recommendation, but also help implement the strategies.” “No one is coming to save us,” says Simmons. “My best tip for those who want to build wealth is to make it your main focus. Educate yourself, spend money on things you value and cut in the areas you don’t. Pay off debt. Invest in your workplace retirement accounts. And put energy toward creating your own financial plan.”
