Although they are more optimistic about achieving their financial goals, a study released this week by Prudential, entitled “The African-American Financial Experience,” found that African-Americans still hold fewer financial products, are more conservative investors and still do not really have relationships with financial professionals.
The study polled 1,500 African-American financial decision makers between the ages of 25 to 70 with incomes above $25,000, and used as its benchmark 500 general population financial decision makers. While it underscored growing affluence in the community and a greater desire to want to achieve financial security, the study also showed that most African-Americans feel they have not been sufficiently engaged by financial advisors.
“Nearly eight out of 10 African-Americans feel that no finance company has made a move to address their needs,” said Sarah Thompson, VP of global market research at Prudential. “Their trust in financial professionals is quite low, but the real barriers to using a finance professional also has to do with confidence and ‘making my own decisions.’ The perception that finance professionals are too expensive and not knowing how to choose or find a finance professional are also key.”
It is clear, though, that the community needs advisors, not least because the study also showed that only two in every 10 African-Americans are on track to meet their planning and saving goals in retirement. In fact, 60% of African-Americans surveyed have less than $50,000 in their company retirement plans and only 23% have more than $100,000. However, the study showed that most African-Americans have not met a financial professional they can relate to, and they don’t see financial firms reaching out to them, Thompson said.