I was so glad to hear from many of you regarding my piece on the Racial Wealth Gap. Most of you were as surprised that the problem was as bad as it is and that these discriminatory practices still take place. But while the wealth gap itself feels insurmountable, there is hope. We can make real substantive change if we take the steps to remedy unfair policies and serve a more inclusive group of people. As we come to the end of Black History Month, I want to highlight some people of color that are doing just that — making change and giving hope.
A bit more bad news
I know, I know…this is a hope piece. But I want to start with some not so great statistics to give perspective on why what these people are doing is so great.
The financial advising industry has a diversity problem:
- 79% of the 434,000 financial advisers in the nation are white, even though whites make up only 63% of the U.S. population.
- African-Americans, Asians and Hispanics/Latinos make up 20% of financial advisers, even though they constitute 36% of the population.
- About 5.7% of advisers are Asian, 8.1% are African-American and 7.1% are Hispanic. And, according to the Certified Financial Planner Board of Standards approximately 23% of financial planners were women.
Until the financial industry becomes more inclusive, it’s hard to see how it can serve groups of people who have historically been left out. We need more diverse advisors, and that means the industry will have to increase its marketing, scholarships and grants geared towards people of color. Without a real effort across the industry, the growing racial wealth gap will hurt not just people of color but our economy as a whole.
Here are some people that are doing something about it.
Frank Paré is the first African-American president of the Financial Planning Association®(FPA®), the largest membership organization for CFP® professionals in the country. He’s been a force for bringing people from diverse races, backgrounds and gender orientations into our industry. In a recent piece in Financial Planning magazine, Frank noted that according to the CFP Board, the total number of African-American CFP professionals in 2017 was only 1,200 out of the approximately 80,000 CFP professionals in the country. That’s only about 1.5%, and it’s par for the course historically. As an FPA leader, Frank is tackling the question of how to make our industry more diverse and inclusive. He’s offered solutions like engaging leaders and students at Historically Black Colleges and Universities (HBCUs) to offer curriculum and degrees in financial planning. I love the concept of fully embracing the struggles we’ve had to make meaningful advancement forward. And I’m looking forward to see how Frank helps us do that.
Geoffrey Brown is the current CEO of the National Association of Personal Financial Advisors (NAPFA). NAPFA is the country’s leading association of fee-only financial advisors — highly trained professionals who are committed to working in the best interest of those they serve. The association provides support and education for over 3,200 practitioners across the country. As NAPFA’s second CEO and the first African American, Geof is responsible for leading NAPFA’s dedicated team of professionals while managing the growth of one of the key organizations in the financial planning profession. Like Frank Paré, Geof is in prime position to really shape the conversation around diversity and inclusion in the industry. In fact, just seeing African-Americans in leadership positions encourages others in our industry to strive to have an influence on the future of financial planning.
Lazetta Rainey Braxton is the founder and CEO of Financial Fountains. Her firm’s mission: to expand the number of wealthy households and to help these families preserve their wealth and pass it on. Lazetta’s own parents struggled to plan for financial security because there were no financial experts in the African-American community that they could turn to for help. She vowed to help families like hers by bringing financial expertise into the community. After working in various personal financial jobs, she passed the CFP exam in 2008 and started her own practice. Today she works with both high net worth clients and the mass affluent (those with investible assets from $100,000 – $1,000,000 and household income over $75,000). And she has a burning desire to help the industry embrace more female and minority clients. Lazetta was the past president of the Association of African American Advisors and helped run the group’s first conference in 2015.
Michelle Singletary writes the nationally syndicated “Color of Money” column for the Washington Post. In her column, she discusses a wide range of personal finance topics, as well as larger social issues like black wealth and the enormous economic impact of gun violence. Michelle uses her platform and influence to move us all forward.
Pamela Capalad is the founder of Registered Investment Advisory firm Brunch and Budget. I first met Pam at a conference in 2016 and was immediately drawn to her energy. She started her firm to focus on helping average people with their finances. She’s devoted her life to financial literacy and uses her knowledge to help people feel at peace and energized about their financial life. In addition to running her successful firm, she and her husband Dyalekt produce an amazing podcast where personal finance and racial economic justice intersect. They focus on topics like the racial wealth gap, net neutrality and how to protect your assets as an immigrant. And if that weren’t enough, she recently started Dead Day Job Army, which focuses on financial education for people of color on a sliding scale, as low as $50/mo. She’s developed a truly creative way to fulfill her passion of serving communities of color.
Rianka Dorsainvil is the founder of Your Greatest Contribution, a financial planning firm dedicated to changing the financial trajectory of Millennial and Generation Xers lives. Rianka was recently given Investment News’ 2018 Rising Star Award, Named Financial Advisor Magazine’s 10 Young Advisors to watch and has become the one of the new faces to CFP® Boards “I am a CFP® Pro” campaign. I believe Rianka’s visibility and the amazing things that she’s doing in her firm will inspire others to pursue this career as well.
I’m so excited about the people for doing what they can to be the change they want to see in our industry. I hope this representation can help bring change to the make up of the industry and whom we serve.