Financial services industry fails to earn trust of majority of Black women

The financial services industry is missing an opportunity to meet the needs of Black women.

Three in five Black women expressed difficulty in finding financial professionals or advisors they trust. That’s according to findings of the initial Black Women, Trust and the Financial Services Industry study conducted by The American College Center for Economic Empowerment and Equality.

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. This is an especially concerning finding given that Black women play prominent earning and financial decision-making roles in Black households and communities.

“Black women are aspiring for financial stability for themselves, but at the same time they want to use their economic power to build a better future for their families and their communities,” said Karim Hill, executive director of the Center for Economic Empowerment and Equality.

“The financial services industry has an opportunity to increase awareness of what is possible for Black women and their wealth with trusted advisory services, products, professionals and investments in advisor diversity and Black-owned financial institutions. The industry must begin providing trusted advice uniquely tailored to Black women who desire to better navigate the world we are living in.”

The research underscored three cultural norms critical to Black women’s financial decision-making and relationships with the financial services industry:

1. Importance of trust in decision-making. “Lack of trust” was the second most cited reason after ‘too expensive’ for why this group is not accessing financial services

2. Priority of community and family rather than a focus on “rugged individualism.” More than 62 percent of respondents in higher-income households said it was important to build wealth for the community. Fifty-eight percent believe Black institutions can provide the tools to serve their needs.

3. Value of interpersonal community and relationships. Black women trust financial services professionals to a greater degree than financial services organizations, reiterating the importance of trust and personal relationships. They also are more likely to report that racial identity affects how they are treated by financial services professionals more than gender

”Black women are gatekeepers of their families and communities, and many serve as the primary breadwinner and financial decision-maker of their households,” said George Nichols III, president and CEO of the American College of Financial Services. “The college is committed to evidence-based, data-driven indicators — like this inaugural trust study — that serve as an inquiry of what Black women need to succeed financially and an invitation to be part of an industrywide solution.”