Three in five Black women expressed difficulty in finding financial professionals or advisors they trust, according to new research from The American College Center for Economic Empowerment and Equality (CEEE).
The research found that engagement of the Black community within the financial services industry is largely transactional—not advisory—and that Black women are less aware of the different types of relationships they can have with financial advisors and institutions.
It’s especially concerning given that Black women play a prominent earning and financial decision-making role in Black households and communities, the inaugural Black Women, Trust, and the Financial Services Industry Study reported.
The Trust Study, comprised of 3,500 middle-income Black women, also found that they experience discrimination and difficulty accessing wealth-building tools, with ‘lack of trust’ as the second most cited reason why this group is not accessing financial services.
The research sought to understand Black women’s unique financial, social, and emotional insights concerning their wealth journey, its linked impact on their families and communities, and what Black women want and need from the financial services industry to succeed financially.
The study provides “a reintroduction to Black women through their own words, in a narrative exploration with statistical significance, and explores new thinking around better serving Black women, their households, and their communities concerning their wealth wants and needs.”
Providing information about the questions to ask about savings, investing, and transferring wealth is an easy way to build trust and better relationships with Black women.
The research underscored three cultural norms critically important to Black women’s financial decision-making and relationships with the financial services industry.
Importance of trust in decision-making
- 60% of respondents expressed difficulty in finding financial professionals or advisors who they trust
- ‘Lack of trust’ was the second most cited reason after ‘too expensive’ for why this group is not accessing financial services
Priority of community/family rather than a focus on ‘rugged individualism‘
- 62.5% of respondents in higher-income households stated it was important to build wealth for the community
- 58% believe Black institutions can provide the tools to serve their needs
Value of interpersonal community and relationships
- Black women trust financial services professionals to a greater degree (~10% more) than financial services organizations – reiterating the importance of trust and personal relationships
- Black women (58%) are more likely to report that racial identity affects how they are treated by financial services professionals than gender
Other key takeaways
Emergency savings, retirement funds, and credit scores are top priorities for Black women – as well as major sources of concern
- Racial identity is significant for Black women in both their financial decision-making and their financial services institutions
- Black women do trust financial services, but they are more trusting of Black-owned institutions
“By creating greater access to applied financial knowledge and community solutions, [the college] strives to narrow the wealth gap and benefit society through generational financial literacy that empowers and educates,” the researchers said. “The financial services industry can complement these efforts with products and services specifically designed to help Black families create and sustain wealth-building practices.
Learn more about the Trust Study, the Four Steps Forward and the Center for Economic Empowerment and Equality at Equality.TheAmericanCollege.edu.