4 ways to grow your practice in the African American marketArticle added by James R. Veal on July 23, 2012
James R. Veal
Joined: January 28, 2005
Ranked: #186 (333 pts)
There is a severe shortage of professional financial advisors working in the African American markets. Here are four strategies to help reach this market.
With close to $1 trillion in annual spending power, a growing U.S. demographic of more than 42 million (according to the U.S. Census Bureau) with increasing salaries and college educations will see nine million baby boomers retire within the next 20 years. Would you, as a financial advisor, be interested in marketing to this group? You bet! Although a majority of them are ill-prepared for retirement, there is still a huge opportunity for advisors to cater to this demographic.
Who are they? Well, you’ve probably guessed it. It is the African American market. This is a target market to be reckoned with. It may make sense to incorporate this target market into your marketing efforts.
I receive many letters, emails and phone calls from financial advisors and insurance professionals across the country and the first question that they usually ask is, “How do you find clients in the African American market?”
These are financial advisors from all walks of life, and include African American advisors as well. So, my mission here is to give you some information and tools to see if this is a niche market worth your pursuing. But first, a brief snapshot of the African American consumer.
There has always been a disconnect between the financial services industry and minority communities. It isn’t that nobody cares, but in many cases, financial institutions have neglected to define these consumers as separate entities. As the number of minorities in this country continues to increase, some industry leaders have begun to project the impact this could have on their bottom lines.
I have recently noticed a lot more articles and news reports on the benefits of marketing to the minority markets. Each year, a slew of studies and surveys such as the Ariel/Hewitt Study of 401(k) Plans, The Nielson Company and the “Prudential Research Study report on the financial behavior of African Americans. The results from the studies consistently conclude that respondents are highly interested, and need and want the services of financial advisors and their products. Even though some African Americans are earning more money and pursuing advanced degrees, too few are creating strategies to help build wealth, savings, businesses and generational wealth.
There is a severe shortage of professional financial advisors working in the African American market. As a financial advisor who happens to be African American, I have come to see that there is not much competition in my locality, but that is a problem. There are just not enough available advisors to help African Americans with their finances. This could be an opportunity for you.
Reading, attending financial forums and conventions, marketing, acquiring designations, hiring a coach and all the other activities that will help us become better advisors are extremely necessary and important. They do help. But one secret that I found works best in the financial services industry is you simply have to be seen. The more people you see and the more people that see you, the more prospects you have the opportunity to convince to become lifetime clients.
Here are a few effective tactics that you can easily implement right away in marketing to the underserved African American community:
The African American market segment is one of the fastest growing minority groups in America today. It is making tremendous gains in overall income and education. Financial institutions and marketers are gearing more attention to this demographic group and positioning themselves for market share. Financial advisors have an excellent opportunity to increase revenues if they desire to pursue the African American market. It is a niche market that is severely untapped and waiting with open arms for someone to help them reach their financial goals. All you have to do is get out there and be seen!
- Teach an five-week basic financial educational course in the evening at your local community college or university.
It will provide you with an opportunity to share your knowledge and skills to those who are interested in improving their financial knowledge. In the meantime, you will improve your speaking skills. Teaching a class will give you instant credibility and a great chance to meet future clients. Most of my high-net-worth clients have been discovered via referrals from those who attend my classes.
- Offer financial educational seminars, workshops and clinics churches in the area.
Nearly half of African Americans in the Prudential survey said they are interested in learning about investments through a faith-based organization. Leaders of the church are usually more than happy to have you come in and provide financial education about the importance of money management and basic budgeting skills to their congregation. These concepts are sorely missing in the African American community.
Commit to providing these workshops on a monthly basis. Do not forget, you are in this for the long term. The objective is to build credibility, trust, honesty and relationships, and show them that you care. You have to first plant the seeds and the fruit of your labor will be rewarded in due time. Nevertheless, you have to be consistent with your seminars or workshops, and let attendees know it is an ongoing financial education class. People normally attend a financial seminar when they feel it’s appropriate and at the right time. You will fail miserably if you propose just a one-day seminar or workshop event at a church.
- Hold free monthly lunch-and-learn financial seminars to city employees in your office.
Many companies are ideally located in town and it’s quite easy for them to drop by for lunch. Provide a convenient opportunity to learn more about their employee retirement plans, Social Security and other financial strategies. As people get to know and like you, word gets around to their colleagues and friends and before you know it, you have to implement a pre-registration system to keep the seminars at a manageable number. That is a good problem to have.
- Help school teachers and educators with their employer retirement plans.
Talk with the school principals of local grade or high schools in your area and make arrangements to come in and speak with the teachers and staff about their 403(b) and 457 retirement plans. Most of them do not have any idea how they work. In addition, they do not know what investment options to choose, how much to contribute or how much they would like to have when they retire. Your job is to help them make these decisions. When they retire, they will hire you to help them invest the rollover money since you’ve been with them prior to retirement. It may take some time to see any results, but it works. You have to be very patient when working with educators.
- Get involved in your community.
Solidarity and concern for the financial well being of the community is very strong among African American decision-makers. Take time and participate in community events, charities, art exhibits and various networking events. They are searching for a partnership with an advisor or financial advisory firm they can trust, rely on and believe in.
Loyalty is earned through an ethical reputation, cultural understanding and demonstrated support for the community. Greater outreach, more initiatives to build understanding and increased efforts to find ways to connect are required in order to create long-term mutually beneficial relationships.
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