Michelle Singletary's grandmother would hound her constantly as a young adult to view debt as a liability, not an asset, as she embarked on her wealth-building journey.
"'Are you still giving your money to the rent man?'" Singletary's grandmother would ask, every time they got on the phone.
The financial nudges ultimately bore fruit for Singletary, who just paid off her mortgage earlier this year and put all three of her children through college debt-free.
Achieving financial prosperity has been a long time coming for Singletary, the award-winning personal finance columnist at The Washington Post who authors "The Color of Money." Singletary spoke onstage to an audience of financial planners at the CFP Board Center for Financial Planning's Diversity Summit on Nov. 9 about how they can serve clients like her to build generational wealth in Black and brown communities that have historically been denied access to that opportunity.
She was joined by panelists Marla Bilonick, the president and CEO of the National Association for Latino Community Asset Builders; and Cy Richardson, the senior vice president for economic and housing programs at the National Urban League and chair of the CFP Board Diversity Advisory Group. Kate Dore, a CFP who is a personal finance reporter at CNBC, moderated the discussion, which frequently acknowledged that advisors who serve minority communities should do so with an understanding of what's held those communities back from attaining wealth.
The conversation came as nationwide, a large wealth gap continues to exist for Black and Hispanic Americans, which Dore referenced onstage. Data earlier this fall from the Federal Reserve found that Black American households had
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It can be easy to oversimplify the yawning racial wealth gap as a matter of numbers, but such discussions must instead add context, Singletary said. "They imprisoned us ... we were denied the path to wealth," she said, referring to the country's long history of Jim Crow, redlining and other segregationist policies that left scars upon the Black community's capacity to build wealth.
Because many from these communities have never known generational wealth or grown up with abundance, "There's fear of loss," she said. The risk of loss is greater for investors who are starting out with less to begin with. Yet the financial services industry sometimes believes those individuals are simply afraid because they don't understand the markets or investing, she said.
It took Singletary a while to get her own daughter to put money into a retirement account when she was a young adult, even though Singletary's household is highly educated and financially comfortable. "Put that money in or I'll put you out of the house," Singletary joked she would say.
"You have to address the fear of loss, not fear they don't know what they're doing."
Building a solution for these communities means facilitating in-depth economic advancement, she said. That means assistance on jobs, homeownership, and removing barriers to building wealth. "It has to be holistic, don't just give them a couple thousand," she said of support programs.
The field also needs to recruit more financial advisors from Black and brown communities who can then go back into those communities with their knowledge and better serve them, Richardson said. Currently, only
The field needs to identify young students who would be "unfulfilled" as doctors or lawyers and help them see the fit they could have as financial planners, for example, he said.
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Bilonick added that for Latino communities, often the immediate needs of food and shelter tend to be the ones getting attention from those who want to help — but long-term wealth-building for the community cannot be ignored.
One subtle way to boost equitable wealth-building is to lend more to small businesses owned by minorities, she said.
"The ability to have a conference like this" shows how far the industry has come in helping minority advisors "deliver sound advice to communities that look just like themselves," said Reginald "Reggie" Lillie II, the Houston associate market manager at Merrill Wealth Management, in an interview after the event.
Lillie, who has helped with Black and African American talent retention at Merrill, didn't catch the wealth gap panel but attended other parts of the diversity summit including part of a conversation on DEI work in pro bono planning.
