A greater number of Black and Hispanic investors are seizing the opportunity to work with a financial advisor, according to a recent study published by Minneapolis-based Allianz Life Insurance Company of North America.

The firm’s annual consumer survey found that 36% of Black Americans who participated in the survey reported that they worked with a financial advisor this year. This is an increase from the 24% the year before. Hispanic Americans are also showing more of an interest in financial advice as 42% reported working with an advisor this year, which is up from the 35% the year before, showing the outreach wealth managers have engaged in is bearing fruit and members of the Black and Hispanic communities are understanding the importance of financial advice, Allianz said.

As part of the survey, about 1,000 individuals participated with 375 responders being Black or African American, 400 Hispanic, and 359 Asian or Asian American, according to the firm.

Advisors have been making concerted efforts to reach out to the Black and Hispanic communities and that is encouraging them to seek advice. It is not the sole reason, according to Travis Walker, business solutions and diversity consultant at Allianz Life. 

Another factor may be how Black and Hispanic investors are organizing their own financial situations, including managing or paying down debt, Walker said. Once they accomplish that, then they start to look to the future. 

“When you get more of a relatively better turn to get your financial house in order then you have a little easier time venturing into things like this,” he said.

As part of the outreach, firms have been engaging with Black communities and hiring advisors from those communities. It is resonating with Black investors who said they were more likely to work with an advisor who had similar characteristics to them including age, gender, and race, the study found.

“A Black customer client or retiree can see that there’s someone like them that is knowledgeable in this area, that has the wisdom and expertise, then it just creates comfort for them,” Walker said. 

It does not mean advisors can only work with investors from the same race or culture, Walker said. Advisors who want to connect with Black or Hispanic investors need to reach out to them directly and listen to their specific needs and problems and address them.

Black and Hispanic investors may not always share the same goals as the population as a whole. For instance, 38% of Black and Hispanic Americans surveyed listed paying off credit card debt as one of their top three financial goals, while only 30% of the total population listed it as such. 

Only 36% of Black Americans who participated in the survey said that saving enough and making plans to live a comfortable retirement was also in their top three financial goals. Meanwhile, 45% of the rest of the population had that in their top three. Only 23% of the total population believe that leaving a family legacy is a top three financial goal compared to the 31% of Black Americans who said it was. 

“If you want to help people with their objectives, it would help you to learn what their objections are,” Walker said. “So, find out what's important and what's not [and] then be authentic in your approach.”

There are topics that Black, Hispanic, and Asian Americans want to discuss with their advisors, but have not yet been able to, the survey found. Those include paying for large, unexpected expenses, how current price increases will impact retirement plans, and trying to make the right decisions about healthcare and medical insurance.

“People are telling you what they want,” Walker said. “So, you can’t be stubborn and say I’m going to try this approach [because] this is what has always worked; you are going to have to tailor it.”

The fact that Black and Hispanic Americans are seeking financial advice has translated into greater confidence in their financial future, the study found. That confident feeling was felt across different groups. 

The survey asked the participants how confident they felt about financially supporting all the things they want to do in life going forward, Black, Hispanic and White Americans all reported an 80% confidence level. This represents a nine-point year-over-year increase for Black Americans and a five-point increase for Hispanic Americans.

“I was encouraged by the amount of confidence some people have with how they’re going to approach retirement and what that’s going to look like for them in the future,” Walker said. “That’s really heartening because I don’t think it’s born out of this optimism or delusion [but] by them working more closely with advisors.”