One way to shrink the racial wealth gap may be by expanding access to financial professionals who Black Americans can identify with, while helping them to grow their money.
That’s the takeaway from Kamila Elliott, CEO of Collective Wealth Partners, who is about to complete her one-year term as the first Black board chair of the CFP Board, which sets and enforces standards for the certified financial planner certification.
“Having cultural sensitivity, understanding the burden of being the first person in the family to be financially successful, family responsibility, and the nuances of wealth with first-generation creators are why diversity within the financial industry matters,” Elliott told Yahoo Money.
The problem is that Black CFPs represent only 1.8% of all CFPs, even though nearly two-thirds of Black Americans would like a financial advisor of the same race, according to the Ariel-Schwab Black investor survey.
“There’s an inherent lack of trust with people of color when it comes to the financial industry due to a lack of financial literacy — making us easy prey,” Elliott said.
For instance, the Ariel-Schwab Black investor survey found that Black Americans are less trusting of the stock market and financial institutions than white Americans. And Black investors are more likely to trust social media to make investment decisions, especially those under 40.
“People still keep money in the house because they don't trust the bank, but turn to financial ‘influencers’ that aren’t held to any standards or accountability and no one is kicking the tires to see if this person is accredited or certified,” Elliott added.
There’s also a lack of access. Finding a financial planner to navigate investing is harder if an investor has smaller sums to invest. Now, with robo-advisors like Fidelity Go, it’s easier to start investing at a much lower threshold.
However, a robo advisor isn’t the same as a financial advisor or financial planner. A good financial planner develops a holistic plan that incorporates budgeting, estate and retirement planning, financial planning, and has a fiduciary duty to clients.
“The goal of the CFP Board is to serve the public by providing competent ethical planning and ensuring that CFP professionals are held to the highest standards,” Elliott said. “The CFP Board’s Let’s Make a Plan website helps consumers find a financial planner, including those that specifically want to help people starting off.”
The CFP Board offers resources to consumers, many pro bono, through its Center for Financial Planning. There’s also CFP Pro, which features young, diverse CFPs reaching younger generations.
The CFP Board is also working to expand its ranks of Black CFPs.
For instance this year, the CFP Board announced the LeCount Davis Sr. endowed scholarship for African American students and professionals who want to get CFP certification and practice financial planning named after the first Black CFP
“First, they said we didn’t have the education and wouldn’t consider graduates from HBCUs — historically Black colleges and universities — when most of the professors at HBCUs are Ivy educated,” Davis, who first became a CFP in 1978, told Yahoo Money. “Then they said, we didn’t have the experience, but we don’t have experience because they won’t hire us or give us an opportunity. The CFP endowed scholarship is to bridge the experience gap.”
To increase diversity in the field of financial planning, the CFP Board has scholarships that cover the course and test fees for the CFP exam and in 2022 gave over $500,000 in scholarships to professionals of color, Elliott said.
That should help more aspiring Black financial planners follow in Davis’ footsteps.
“My family was poor financially and I was the first in my family to graduate from high school,” Davis said. “When I received an athletic scholarship for college, the entire neighborhood gave me a parade send off because I represented their hopes and dreams. I was a product of the village and it made them proud.”
Ronda is a personal finance senior reporter for Yahoo Money and attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda
Read the latest personal finance trends and news from Yahoo Money.
Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn.
Earlier this year, in May, claims were made that Microsoft Corp co-founder Bill Gates owned the majority of America’s farmland. While that is false, with the billionaire amassing nearly 270,000 acres of farmland across the country, compared to 900 million total farm acres, a different billionaire privately owns 2.2 million acres, making him the largest landowner in the U.S. John Malone, the former CEO of Tele-Communications Inc., which AT&T Inc. purchased for more than $50 billion in 1999, has a
Many retirees plan to earn extra income to supplement their retirement spending. But how much can a retired person earn without paying taxes? The answer to this question varies based on your situation. Understanding the tax rules surrounding retiree income can … Continue reading → The post How Much Can a Retired Person Earn Without Paying Taxes? appeared first on SmartAsset Blog.
The SECURE 2.0 Act, signed by President Biden in December 2022, includes dozens of changes to provisions related to tax-advantaged retirement accounts. Among the most important changes is a provision, which took effect Jan. 1 of this year, that delays … Continue reading → The post Your Required Minimum Distributions (RMDs) Have Officially Been Pushed Back appeared first on SmartAsset Blog.
Three Motley Fool contributors have singled out DocuSign (NASDAQ: DOCU), Amazon (NASDAQ: AMZN), and Meta Platforms (NASDAQ: META) as prime candidates for comebacks. Jake Lerch (DocuSign): DocuSign really took it on the chin in 2022. Its shares lost 64% of their value last year as the company faced numerous challenges.
Even as Buffett's company Berkshire Hathaway has ventured into other sectors, it has always invested in banks.
It’s mid-January now, and 2023 is into full swing. The holidays are behind us, and the future ahead of us has yet to be written – and what better time than now to start setting up a stock portfolio to carry into that future. The key to success remains the same as always, finding the right stocks that are primed for gains and solid returns. Recognizing them is the trick. That’s where the Smart Score comes in. Based on TipRanks’ advanced AI algorithms, the Smart Score collects data on all of Wall
And how you can turn their financial success into your own.
I'm retired and living on Social Security and food stamps. I have all my money in two conservative retirement accounts. I cannot contribute any money to them. I plan on taking distributions in five years. What's the best course of … Continue reading → The post Ask An Advisor: I Live on Social Security and Food Stamps. Can I Protect My Investments in a Down Market? appeared first on SmartAsset Blog.
The following real estate investment trusts (REITs) all trade below their book value, and each one pays a dividend. If the Federal Reserve ever makes the pivot back to lowering interest rates, REITs such as these may be of interest to patient investors. While the wait continues for a change in the rate environment, an investor continues to receive a dividend. That’s the idea, anyway. It may or may not work out that way, but for those interested, here are the REITs: Medical Properties Trust Inc.
If you own a home or have been interested in buying one, you are aware of the sizeable U.S. residential real estate downturn. Sales numbers are dropping to their lowest rates since 2020, but interest rates continue to rise to around 6.5%. This scenario doesn’t mean investors should look to another option viewed as less volatile. Take real estate investment trusts (REITs), for example. REITs are not just a platform for investing in residential real estate, offering properties such as retail space
Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet's Quant Ratings, we zero in on three names. While we will not be weighing in with fundamental analysis, we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names. Greenbrier Companies recently was downgraded to Hold with a C rating by TheStreet's Quant Ratings.
The Chinese electric vehicle maker Nio (NYSE: NIO) was a favorite among investors at the height of the pandemic. This huge drop has caused many investors to ask whether or not Nio is a good stock to buy right now. To answer that question, let's take a closer look at what is going right for Nio right now, and what hurdles the company is facing.
Electric vehicles (EVs) are quickly becoming a key part of automakers' lineups, and a recent survey by KPMG showed that auto executives believe EVs will account for up to 40% of their new-vehicle sales by 2030. Investors might want to consider buying Ford (NYSE: F), while being very cautious before jumping in with ChargePoint Holdings (NYSE: CHPT).
Growth stocks aren't getting the positive attention from investors that they were even a year ago, but that could offer a moment of opportunity. For investors with a healthy risk tolerance level, you needn't turn to the crypto markets to find investments with compelling paths to delivering favorable financial and shareholder returns. Intuitive Surgical (NASDAQ: ISRG) has a simple yet compelling business model that has enabled it to put up stunning growth and deliver incredible returns to shareholders throughout the years.
Stocks were down big in 2022—and market watchers expect more of the same in 2023, at least at the start. Here’s how investors should invest to thrive in 2023, according to market analysts.
The Nasdaq Composite index's level has fallen 28% over the last year and trades down 32% from its high. For those willing it weather challenges in the near term, today's tough market conditions have actually made it possible to build positions in incredibly strong businesses at prices that leave room for impressive returns. With that in mind, read on to see why two Motley Fool contributors identified these two industry-leading businesses as great investment candidates that can be purchased at attractive prices.
The S&P 500 declined sharply last year, but historical data says the stock market could rebound in 2023.
While the stock market has performed abysmally over the past 12 months, there are plenty of stocks available at steep discounts. Three Motley Fool contributors were asked to identify dirt cheap stocks to buy in January. Here's why they chose Pfizer (NYSE: PFE), Teva Pharmaceutical Industries (NYSE: TEVA), and Vertex Pharmaceuticals (NASDAQ: VRTX).
Required minimum distributions (RMDs) are the amounts you must take from tax-deferred retirement accounts. Here’s how to avoid costly errors.
Real estate stocks got bludgeoned last year as higher interest rates weighed on their values. The average real estate investment trust (REIT) shed a quarter of its value last year, with some falling even further. One of the silver linings to falling REIT share prices is that their dividend yields rose.
