After civil rights leader Martin Luther King Jr. was assassinated on April 4, 1968, a series of racially charged riots took hold across the country.
At the time, David Demming had been working as a student teacher in the inner city of Cleveland while enrolled at Miami University.
“I was an intern teaching at East High School around the Hough riots in 1967 and a student teacher at Glenville High School prior to the riots in 1968 in Cleveland,” said Demming, who works today as a certified financial planner with Demming Financial Services Corporation in Aurora, Ohio. As a result of this early life experience teaching underprivileged youth, Demming carries a sensitivity and awareness about race that others may not have.
Through family connections, he departed to take a job at a financial firm where he obtained his securities license. Some 40 years later, Demming is more than comfortable advising multiracial clients about their finances.
“The payback is loyalty and referrals,” said Demming, who works with international, white, black and interracial clients. "Be honest and sincere without pretense around those who come from a different racial background."
Although a lot has changed for African-Americans since the civil rights movement of the 1960s, some would argue that skin color remains a barrier.
“Racial diversity is very high on the uncomfortable discourse list, which suggests that it needs more attention and conversation,” said Lazetta Rainey Braxton, financial advisor and chair of the Association of African American Financial Advisors. “This is one of the areas that we can embrace because it may give room to other diverse populations as well.”
Increased diversity can also contribute to a firm’s bottom line.
Companies in the top quarter for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians, according to a McKinsey & Company report.
Braxton led a webinar on October 25 titled "Staying Relevant in an Increasingly Diverse Environment" hosted by the XY Planning Network to help advisors who want the increased revenue that a diversified client base can bring but may feel ill-equipped to establish such relationships.
“Love has everything to do with why diversity matters,” Braxton told webinar participants. “What we're seeing in the 21st century, although we’ve definitely seen it before but even more so now, is marriages and unions that are producing biracial offspring, such as tennis star Serena Williams and her husband Alexis Ohanian as well as Prince Harry and his wife Meghan Markle.”
The potential for increased revenue cited by the McKinsey & Company report is significant given the changing demographics and the number of multiracial young adults that are expected to flood the workforce in coming years. For example, according to the U.S. Census Bureau, Americans who identify as biracial of white and black descent increased by 134 percent while those of white and Asian descent grew by 87 percent.
“When you have biracial children, oftentimes there is not only the integration of race but also the integration of wealth and culture,” said Braxton, who advises interracial married couples with joint assets to consider how inherited wealth will be transferred to their children. “It’s a legacy issue. If an advisor cannot speak to all those facets including culture, they will be left behind and won't be relevant anymore.”
Braxton’s tips for attracting a more diverse clientele included the following:
- Include photos of people of multiple races in marketing materials, such as websites and promotional pamphlets. “If you say diversity is important or that you want diversity, photos that show one homogeneous group doesn't speak to diversity so well,” said Braxton.
- Maintain relevancy by reading the top-selling books and viewing the top-selling films, such as Black Panther. Braxton says, “Cultural competency, like any competency, requires study.”
- Report racial prejudice that you hear or experience. “You can equalize all humanity for opportunity and access economically by reporting biases that prevent diverse populations from gaining employment, getting promoted or that prevent them from potentially earning what they could,” Braxton said.