NY1 continues its coverage of Black History Month with a look at the specific financial needs and experiences of the African-American community. NY1's Tara Lynn Wagner filed the following report.
When it comes to making financial decisions, it's not all about the dollar. From ethnicity to gender to sexual orientation, each community has different money needs.
"Unless we understand what those needs are, we can't serve the communities," says Michele Green, vice president and chief diversity officer at Prudential Financial Inc.
Prudential's signature research series looks at the specific financial experiences of women, African-Americans, Hispanic-Americans and the LGBT population. They found that African-Americans tend to be more confident and more optimistic when making financial decisions than the general population. They also feel more prepared to make those decisions, even though they are doing so without professional guidance for the most part.
"When we looked in this study at the number of African-Americans who had a financial adviser, the number was very few," Green says. "It was less than 20 percent."
Green says that without the help of financial advisers, the community falls back to low-risk products they know and trust. African-Americans are only half as likely to have investment products like IRAs, stocks and bonds, which are key to building wealth, but more likely to have life insurance.
It reflects another finding: the role that caring for family, and even extended family, plays in the African-American financial experience.
"As an African-American woman, I know personally that as your finances improve, you want to help your family members along the way with you," Green says. "So what that means is, you're incurring debt and expenses not just for yourself and for your immediate family members, but those outside of your immediate family."
Another part of the problem is a lack of outreach by the financial services community. Regardless of their income level, the survey found that African-Americans are 13 percent less likely to be contacted by a financial adviser than the general population.
Green says that tapping into this community with growing affluence is easy and starts with showing up in the right places, starting with faith-based institutions.
"We have a great opportunity there to access the community, to educate the community and quite frankly, to build trust," Green says. "We need to show up, be involved, build that trust, educate, and then perhaps folks will start to use our services and products in a way like never before."