Michelle Singletary’s grandmother constantly chastised her as a young adult to view debt not as an asset, but as a liability, as she set out on her wealth-building journey.
“‘Are you still paying off the loan, man?’” Singletary’s grandmother would ask every time they spoke on the phone.
The financial difficulties ultimately paid off for Singletary, who paid off his mortgage earlier this year and put all three of his children through college debt-free.
Achieving financial prosperity has been a long time coming for Singletary, the award-winning personal finance columnist for The Washington Post who is the author of “The Color of Money.” Singletary spoke on stage Nov. 9 at the CFP Board Center for Financial Planning’s Diversity Summit in front of an audience of financial planners about how they can serve clients like her to build generational wealth in Black and brown communities that have historically been underserved. Have been denied access to that opportunity.
He was joined by panelists Marla Bilonic, President and CEO of the National Association for Latino Community Asset Builders; and Cy Richardson, senior vice president of economic and housing programs at the National Urban League and chair of the CFP Board Diversity Advisory Group. Kate Dorr, a CFP who is a personal finance reporter at CNBC, moderated the discussion, which often acknowledged that advisors who serve minority communities should do so with the understanding that those communities receive funding. Who has stopped you from doing it?
Panelists discuss narrowing the racial wealth gap at the CFP Board’s 2023 Diversity Summit in Arlington, Virginia. L to R: Cy Richardson of the National Urban League and CFP board; Michelle Singletary of The Washington Post; Marla Bilonic of the National Association for Latino Community Asset Builders; CNBC’s Kate Dore.
The conversation took place across the country, a large wealth gap exists for Black and Hispanic Americans, which Dore referenced on stage. Federal Reserve data from earlier this fall showed that black American households had Their average wealth saw a jump of 60% From 2019 to 2022, however, their numbers still lag behind white and Asian American wealth. The average white American household was worth $285,000 in 2022. The numbers were $536,000 for the average Asian family (although among Asians, income inequality is greater), $44,900 for the average black family, and $61,600 for the average Hispanic familyAccording to the Fed, it also reflects a wealth advantage for Hispanics.
Read more: 7 Tips to Help Black Clients Find Multi-Generational Success
Singletary said it may be easy to oversimplify the racial wealth gap in terms of numbers, but such discussions should add context. “They imprison us and keep black people from wealth,” he said, referring to the country’s long history of Jim Crow, redlining and other segregationist policies that left scars on the black community’s ability to create wealth.
Because many in these communities have never seen generational wealth or grown up with abundance, “there is a fear of loss,” he said. The risk of loss is higher for investors who are starting with less money. Yet the financial services industry sometimes assumes those individuals are afraid simply because they don’t understand the markets or investing, he said.
It took Singletary a while to put money into a retirement account as his daughter became a young adult, even though Singletary’s family is highly educated and financially comfortable. Singletary joked, “Put your money in or I’ll throw you out of the house.”
“You have to overcome the fear of harm, not the fear that they don’t know what they’re doing.”
Creating solutions for these communities means facilitating deeper economic growth, he said. This means helping overcome barriers to jobs, homeownership, and wealth building. “It has to be holistic, don’t just give them a few thousand,” he said of aid programs.
Richardson said the sector also needs to recruit more financial advisors from Black and brown communities who can go back to those communities with their knowledge and better serve them. Currently, only Of all CFPs, 1.9% are black and 2.9% are Hispanic.According to data from the CFP Board earlier this year.
The field needs to identify young students who “wouldn’t be happy” as doctors or lawyers and help them find the fit as financial planners, he said.
Read more: Retaining diverse talent is hard – 3 ways to succeed
Bilonik said that for Latino communities, the immediate needs of food and shelter often get the most attention from those who want to help — but long-term wealth-building for the community can’t be overlooked.
One subtle way to promote equitable wealth creation, he said, is to extend more lending to minority-owned small businesses.
Reginald “Reggie” Lilly II, Houston associate market manager at Bank of America Merrill Wealth Management.
Association of African American Counselors
Reginald “Reggie” Lilly II, Houston associate market manager at Merrill Wealth, said “the ability to hold a conference like this” shows how much the industry is helping minority advisors “give good advice to communities that look like them.” Has come far”. Management, in an interview after the incident.
Lilly, who has helped retain Black and African American talent at Merrill, did not hold the wealth gap panel, but participated in other parts of the diversity summit, including part of a conversation on DEI’s work in pro bono planning. Was.