African Americans have played a crucial role in the finance sector since the nineteenth century. But while a handful of Black finance leaders have managed to find success in the sector, Black investors have historically faced significant challenges.
As a woman of color in the financial services industry, I’m acutely aware of the progress needed toward diversity. That’s why I’m a co-founder of the BLX Internship Program. Since 2020, the program has provided an entry point to the profession for Black and Latinx individuals.
In the wake of the Superbowl, it’s worth noting that the NFL has done well in this installment of Pathfinder Awards, since two recipients formerly played professional football.
This article highlights African American-owned wealth management firms, financial advisors, and related resources. It also emphasizes the importance of diversity, equity, and inclusion (DEI) in the financial planning sector.
The Importance of Black Financial Advisors
Finding a Black financial advisor matters to white allies, too.
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Braxton summed up in a single word why it’s also important for white allies to consider Black advisors: intentionality.
“If you’re intentional about being intentional and getting out of your comfort zone, then yes, you should open yourself up to other service providers,” she says. “That takes effort.”
Braxton says she’s had white clients who intentionally spend their money with her firm for social impact. She recalled yet another client who said (and who worried their comment might sound strange) that they wanted to work with a Black woman. And to both these instances, Braxton responded optimistically.
“There’s nothing strange about this,” she says. “What we’re building is an alternative that can only happen if there are clients who believe in what we’re doing.”
Braxton says some of her Black clients have expressed that a Black advisor may better understand small cultural nuances that could have big economic impacts.
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“That adds a degree of trust, that they understand where you’re coming from, will listen to you and then make suggestions according to that deep understanding,” Braxton says. “Often clients may wonder, ‘Who can help me? There’s not a lot of Black advisors, and there aren’t white advisors who understand what’s going on with me.’”
For such a client, the embedded trust and familiarity of having a Black advisor could mean the difference between seeking out financial advice and forgoing it. However, Braxton makes clear that this can’t be a blanket statement.
“I also know that there are Black clients who may not prefer a Black advisor,” she says. “They just want to be served well like any other client would be served.”
So the argument, she says, isn’t necessarily that we need more Black CFPs because that’s what Black clients are looking for. We need more Black CFPs so clients have options for any preference they may have when they start looking for an advisor, she says.
As the number of Black CFPs grow, so does their impact on families and communities seeking financial advice, CFP Board CEO Kevin R.
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“At CFP Board, we firmly believe that a diverse and inclusive profession will enhance the quality of financial advice and contribute to a more equitable society. Our vision is a financial planning profession that shares the diversity of our country.”
But this goes beyond just supporting Black businesses for social impact. As an African American, you may be thinking about hiring a financial advisor who understands your heritage, family priorities, and unique financial planning needs.
How to Find a Black Financial Advisor
The best place to start your search is the Association of African American Financial Advisors' Find a Financial Advisor tool. Once you fill out your contact information, you’ll enter your ZIP code and indicate any specialties you may be looking for, such as comprehensive financial planning, insurance, investment management, inheritance or taxes.
Beyond that, Braxton says it’s becoming more commonplace for financial planning firms to post pictures and bios of their advisors, and some are even offering details on the demographics and populations their advisors tend to serve most. When sifting through advisors, feel free to get in touch with the firm to ask if these details are available. It may also be helpful to look into financial planning networks and firms with an outward commitment to diversity, equity and inclusion.
Chris Woods, a member of the Financial Planning Association, says you don’t have to compromise on qualifications or personal preference in any way, shape or form to find a Black advisor.
Whether you're looking for a certain designation such as CFP, registered investment advisor or broker-dealer; years of experience; a particular payment model; or any other preference, he says, you’ll find a Black advisor who can meet that criteria.
“Qualified Black financial advisors are everywhere,” says Woods, who is a certified financial planner. “It’s just a matter of people searching for the advisor for them.”
Before hiring a financial advisor, it’s important to first consider your own financial planning priorities.
Before hiring an advisor, determine what services you need from them. Though most people use a financial planner simply to invest for retirement, this is only a small part of what many advisors offer. As you can see, financial advisors can help you with your entire financial picture, not just investing.
Finding the right advisor can help you minimize risk, maximize gains and take advantage of tax breaks while investing for your future.
Once you have a list of services you would like, review the fee structures financial advisors offer. If you are looking for a full-service advisor to manage all of your investments, consider searching among fee-based financial advisors. If you want to manage your money yourself, consider the flat fee and monthly subscription advisors for ongoing support.
Once you have chosen the services and fee structure you prefer, it’s time to contact a few advisors and interview them. What are all the ways you get paid? Interview multiple advisors to get a feel for who you want to work with.
Once you find an advisor (or two) you feel comfortable with, it’s always a good practice to check their credentials and the firm’s details.
Notable Black Financial Planners and Finance Professionals
As we celebrate the achievements and legacies of Black Americans this month, I’ve curated a list of six Black financial planners and other finance pros who have interesting stories to tell. Like me, the remarkable professionals below are doing their part to change the financial planning landscape.
- Dr. Preston D. Cherry: Recently named one of 10 to Watch in 2023 by WealthManagement.com, Dr. Preston Cherry is an innovative thinker in the financial planning profession. When he’s not promoting awareness of financial psychology and leading the Financial Therapy Association, he’s shaping minds at the University of Wisconsin.
- Lauryn Williams: A four-time Olympian and financial planner, Lauryn Williams takes discipline to a whole new level. She has an incredible life story. Known as the first American woman to earn a medal at both the summer and winter Olympic games, she has written a new chapter with her work in financial planning. Her practice, Worth Winning, is a modern planning firm focused on serving Millennials in a virtual format. Lauryn also works as a student loan consultant for Student Loan Planner. Her podcast, Worth Listening, is up to 150-plus episodes.
- Rianka Dorsainvil: If Rianka Dorsainvil’s face looks familiar, you might have seen her in the “I am a CFP Pro” campaign, on an appearance on CNBC, or at a speaking engagement at an industry conference. As co-CEO of 2050 Wealth Partners, she regularly offers her unique perspective on helping people make positive long-term decisions about their money.
- Chris Browning: When Chris Browning took his first finance classes in college, he realized the gaps in his financial knowledge and that other students felt the same. A lifelong passion for personal finance led him to create Popcorn Finance, an award-winning podcast that discusses money topics in the time it takes to make a bag of popcorn. He also has a call-in advice podcast, This Is Awkward, which covers topics like what to do when a family member pressures you to buy a house. You might have noticed Chris is not a CFP® practitioner like the others on this list.
- Brian Thompson: With a background as a tax attorney, Brian Thompson brings a unique skillset to financial planning. As the founder of Brian Thompson Financial, he specializes in serving LGBTQ+ entrepreneurs, especially those who are mission-driven. In fact, he started a podcast to help tell the stories of mission-driven entrepreneurs, aptly named Mission Driven Business. The episodes feature interviews with guests as varied as a New York Times columnist and the CEO of a global, LGBTQ-first streaming network.
- Chloé A. Moore: I can’t leave myself off this list because I want to connect with readers. Through my social channels, you can learn more about my passion for financial education and helping tech professionals through my practice, Financial Staples.
Qualified Black financial advisors are everywhere,” says Woods, who is a certified financial planner. “It’s just a matter of people searching for the advisor for them.”
Here are some other Black financial planners and finance professionals:
- Cedric Edwards, Financial Advisor at Stifel Independent Advisors
- Shawn Wooden, Financial Advisor, Vice President & Partner, Associated Investor Services
- Delvin Joyce, Financial Planner, Prosperity Wealth Group
- Rick Nott, Managing Director, Angeles Wealth Management
Black-Owned Investment Firms
Historically, Black-owned investment firms have faced systemic racism and a host of structural barriers that hinder their chances of success. The resilience of Black-owned businesses has stood the test of a global socioeconomic crisis.
Unfortunately, the old adage “it’s not what you know, it’s who you know” still rings as true today as ever. While most successful founders tap into the existing white-dominant investment networks to get their business off the ground, these very networks crowd out and systematically discriminate against African American founders. Plus, with the investment industry traditionally dominated by white males, Black founders can find their pitches fall on deaf ears.
Despite these challenges, it is possible to succeed as a Black-owned investment firm - as a few trailblazers are proving. Take Ariel Investments, for example. Founded in 1983 by John W. Rogers Jr., it was the first Black-owned mutual fund company on Wall Street. Since then, it has weathered the markets and grown to manage $15 billion in assets, inspiring other Black investors along the way.
Here are some African American-owned firms:
- Brown Capital Management (Baltimore, MD)
- Channing Capital Management (Chicago, IL)
- Banneker Partners (San Francisco, CA)
- Base10 Partners (San Francisco, CA)
- GenNx360 Capital Partners (New York, NY)
- Material Impact Partners (Boston, MA)
- The Vistria Group (Chicago, IL)
Here is a non-exhaustive list of other firms owned by underrepresented communities:
- Causeway Capital Management LLC (Los Angeles, CA)
- CHANGE Global Investments (Camas, WA)
- GlobeFlex Capital (San Diego, CA)
- GQG Partners (Fort Lauderdale, FL)
- Hardman Johnston Global Advisors (Stamford, CT)
- Himalaya Capital Management (Seattle, WA)
- LM Capital Group (San Diego, CA)
- Longfellow Investment Management Co. (Boston, MA)
- Westwood Global Investments (Boston, MA)
- Artiman Ventures (Palo Alto, CA)
- Aspect Ventures (Palo Alto, CA)
- Avance Investment Management (New York, NY)
- Crayhill Capital Management (New York, NY)
- Forerunner Ventures (San Francisco, CA)
- Hull Street Energy (Bethesda, MD)
- K1 Investment Management (Manhattan Beach, CA)
- Pharmakon Advisors, LP (New York, NY)
- Social Capital (Palo Alto, CA)
- Threshold Ventures (Menlo Park, CA)
- Alua Capital Management LP (New York, NY)
- Bracebridge Capital (Boston, MA)
- HG Vora Capital Management (New York, NY)
- Massar Capital Management, LP (New York, NY)
- PE Investments LLC (Boston, MA)
- Rose Grove Capital Management (Wellesley, MA)
- RTW Investments, LLC (New York, NY)
Demographics and Economics
Understanding the demographics and economics of the African American community provides a crucial backdrop for financial planning.
In 2019, 40.6 million people in the United States were non-Hispanic black alone, which represents 12.8 percent of the total population. Blacks/African Americans are the second largest minority population in the United States, following the Hispanic/Latino population.
In 2019, as compared to non-Hispanic whites 25 years and over, 87.2 percent of non-Hispanic blacks had earned at least a high school diploma, as compared to 93.3 percent of the non-Hispanic white population. 22.6 percent of non-Hispanic blacks had a bachelor’s degree or higher, as compared with 36.9 percent of non-Hispanic whites.
According to the Census Bureau in 2019, the average non-Hispanic black median household income was $43,771 in comparison to $71,664 for non-Hispanic white households. Census Bureau reported that 21.2 percent of non-Hispanic blacks in comparison to 9.0 percent of non-Hispanic whites were living at the poverty level.
In 2019, 55.9 percent of non-Hispanic blacks in comparison to 74.7 percent of non-Hispanic whites used private health insurance. Also in 2019, 43.5 percent of non-Hispanic blacks in comparison to 34.3 percent of non-Hispanic whites relied on Medicaid or public health insurance.
According to Census Bureau projections, the 2020 life expectancies at birth for blacks are 77.0 years, with 79.8 years for women, and 74.0 years for men. For non-Hispanic whites the projected life expectancies are 80.6 years, with 82.7 years for women, and 78.4 years for men.
Financial Planning: When to Seek Advice
You should strongly consider hiring a financial advisor if you have a significant amount of money available for saving or investing. But even if you don’t have a lot of money saved, many financial advisors and planners provide reasonable pricing options and valuable services you should consider, especially if you’re facing a significant life event.
You don’t need to fire your current advisor before beginning your search for a new financial advisor.
WSR Pathfinder Awards
Today we launch our third year of the invitation-only WSR Pathfinder Awards series, which honors excellence in executives and professionals from underrepresented communities in wealth management and the organizations that advance them.
As with past Pathfinder Awards, we examined potential candidates across the wealth management industry, searching for outstanding individuals who have demonstrated dedication to the industry, proven expertise with a strong track record, outsized influence and the ability to serve as role models for those who are considering or developing a career in wealth management. We also considered organizations that show leadership in advancing underrepresented communities, spearheading DEI initiatives that change the industry for professionals, advisors and clients.
In addition to spotlighting outstanding individuals and organizations, the Pathfinder Awards serve a second and critical purpose - to provide a platform for voices from underrepresented backgrounds and communities to address our industry about DEI concerns, so that we can improve as individuals and as an industry.
Organization Of The Year: The Association Of African American Financial Advisors
The Association of African American Financial Advisors’ (AAAA) mission is to increase the representation of Black/African American financial advisors and provide financial planning services to African American families. It addresses the underrepresentation of Black advisors and lack of financial planning for Black communities, advocating for Black advisors and clients with organizations such as the SEC, where it addresses the complexity of examinations and paperwork for advisors serving diverse communities.
AAAA has grown rapidly from receiving support of $150,000 in 2017 to cash and in-kind funding of $2.1 million in 2023, which was not only an increase of multiples over 2017, but nearly doubled its 2022 support of $1.2 million. The organization’s membership has also experienced strong growth, with 2,100 dues-paying members and 9,000 advisors in its network in 2023. The organization’s strategic partners include J.P.
Here are some receipients of the Pathfinder Award:
- Christian Nwasike, Chairman of the Board & CEO, Association of African American Financial Advisors
- Toussaint Bailey, Founder & CEO, Uplifting Capital
- Lazetta Rainey Braxton, Founder & CEO, Lazetta & Associates And Co-CEO, 2050 Wealth Partners
- Madelaine Brooks, Regional Director, Prudential Financial
- Devon Drew, Founder & CEO, AssetLink
The Association of African American Financial Advisors’ (AAAA) mission is to increase the representation of Black/African American financial advisors and provide financial planning services to African American families. It addresses the underrepresentation of Black advisors and lack of financial planning for Black communities, advocating for Black advisors and clients with organizations such as the SEC, where it addresses the complexity of examinations and paperwork for advisors serving diverse communities.
