There are three negative misconceptions about the financial advice profession Keith Beverly and Gary Clement want to debunk in the African-American community.
“One, all financial planning or wealth management roles require you to sell; two, there isn’t enough wealth in the black community to both serve black clients and do well financially; and three, the firm culture won’t be conducive to your success,” said Keith Beverly, the founder of moXY Financial, a network of advisors that provides financial education to Generations X and Y. “There are others, but those are probably the top three.”
The CFP Board estimates there are approximately 1,200 African-American certified financial planners. Combined with the estimated 1,500 Hispanic CFP professionals, these two groups represent only 3.5 percent of 82,000 CFP holders.
Though the overall size of the African-American community in the U.S. made up 13.4 percent in 2017, some associations and advisors in the financial services industry feel the percentages for diverse populations inside the industry should look more like figures for the population at large. African-Americans made up 4.8 percent of personal financial advisors in the U.S. Bureau of Labor Statistics’ population survey in 2017. The CFP Board reported 6 percent of financial advisors are African-Americans.
To that end, national associations like the CFP Board and the Financial Planning Association have launched their own initiatives.
Beverly runs the “20 by 2020 Initiative,” a goal to help 20 African-American advisors become CFPs by 2020, with the help and support of Clement, the president of Clement Asset Management and a lead instructor at the Kaplan Schweser Certified Financial Planning Program. Outside, Beverly and Clement actively participate in their local community as educators and guest speakers, hoping to increase the visibility (and subsequently the awareness) of black financial advisors.
As both advisors perform outreach in communities, they bump up against comments and questions that highlight the misunderstanding between the financial advice industry and the African-American community.
The first misconception, that advisors have a requirement to sell, can be off-putting to prospects. The belief derives from entry-level financial advisor roles that require representatives to pool their networks, bring in revenue for a firm and then earn an income off commissions. Most people don’t end up hitting the required sales goals and that’s why there’s a high attrition rate in that area of the industry, said Beverly.
“There’s nothing wrong with selling,” said Clement. “But if you don’t have that experience that can be something that’s intimidating.”
The misconception that there isn’t enough wealth in the black community to be a successful advisor is founded on statistics of wealth as it relates to race, the belief that black advisors only serve black clients and the “perception that you have to have wealth in order to go into wealth management,” said Beverly.