A Primer for Financial Advisors Seeking to Differentiate Their Practice

Before advisors can credibly and effectively add value to this underserviced segment they must understand some factual impediments to Black family wealth accumulation, forces that prevent the willing marathon runner from being fully prepared. Much of the challenge for Black communities stems from discriminatory practices — both historic and contemporary — such as redlining, general housing discrimination, and inflated interest rates. The cumulative, generational effect of these practices has helped lead to the median white family having 12 times the wealth of the median Black family. In fact, one in four Black households have zero or negative net worth. Even in families where one or more members has a professional degree, Black families have, on average, $200,000 less in wealth than their white counterparts.