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Industry Spotlight > Women in Wealth

Q&A with James R. Veal: A Role Model, Part 2

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Even as a youngster, James R. Veal liked math and science. So when he went to college, he majored in engineering. But as with so many young people finding their way in the world, a chance encounter changed his career plans. While in college, a friend introduced him to a stockbroker. Soon after, he realized how a career in finance could give him the chance to help people and build a profitable business, and so he promptly switched his major to business and finance.

“I liked it because it dealt with people,” he says. “I’m people oriented. And the idea of helping people financially as well as looking at this business as an entrepreneur, it felt better than being an engineer in a laboratory.”

So, 15 years ago, Veal started as a “rookie broker” at a small investment banking firm on Wall Street. He then went on to work as a financial consultant with a major bank as well as a number of independent broker-dealers.

Three years ago, he decided to strike out on his own and opened his own independent financial planning and investment firm in his native Philadelphia, JRV Wealth Management Group, LLC.

Today, he manages roughly $10 million in assets for his clients, 85 percent of whom are African-Americans. Predominately, his clients are boomers, seniors and senior African-American women.

Outside the business, Veal volunteers his time to teach courses on financial literacy at Temple University and at a local church.

In the second part of LifeHealthPro’s conversation with Veal, he outlines how carriers can recruit more African-Americans into the financial services industry and what other advisors can do to tap into this growing market.

SMA: What can the carriers and the industry in general do to reach this community?

Veal: They do a good job but I think they’re barking up the wrong tree. What they need to do is track down people like me, African-American advisors in the community, and partner with us to provide these classes, workshops, lectures, courses, etc. I think that kind of collaboration would be more effective than trying to go at the mass market.

SMA: What can the carriers and the industry do to recruit more African-Americans into the advisory ranks?

Veal: It’s a challenge. There are very few African-American role models in the industry who can mentor these rookies. However, the best way to find prospective advisors is by contacting African-American advisors. We are in the trenches every day and we come in contact with these intelligent people all the time. Some of these individuals are in our networks, they’re our contacts, our prospects, some are even our clients. So we’re in an ideal position to recommend and steer prospects to these major carriers.

SMA: How can other financial advisors tap into this market?

Veal: They have to come into the community. They have to come in and some do. They provide free workshops, financial seminars; some advisors even sponsor sports teams and community events. People have to see them. The more times they see them the more trust that they have in them. There are a lot of people in this community that don’t have much trust but I think if they have a presence on a consistent basis in the community, they will earn their trust.

But there’s a serious shortage of financial advisors in the African-American community. Actually there’s no competition for me. So, yes, we need more help because there are not many African-American advisors.

SMA: What selling strategies or products are proving successful?

Veal: From my experience the most effective strategy for African-Americans is participating in the retirement plans at work. The President has this new mission where you have to opt out of it instead of opting in. And I think that was so significant because a lot of African-Americans weren’t participating in the 401(k)s. So I think that strategy will help down the road, and more of us trying to provide financial literacy classes and courses will help them as well. And then we can find solutions to their problems and concerns.

In terms of products I do a tremendous amount of fixed indexed annuities. That works extremely well. I think they like the fact that they have the opportunity to do well and not lose the principal. And they like the idea that they have to hold it for a while to really reap the rewards but it’s pre-tax.

Life insurance is very important as well. A lot of the people in the African-American community were sold these $10,000 whole life policies back in the day. At that point I believe they were just for burial insurance. But they didn’t know. They weren’t educated and they’re still not. So what I have to do is educate them and let them know that, “Hey, you know what? The most important aspect of your life right now is to provide insurance for your family just in case something catastrophic [happens].” So life insurance has been huge and especially for wealth generation. Again, our community is not familiar with those terms. But I have to educate them on that so life insurance and fixed indexed annuities have been huge.

SMA: A large portion of your clients are senior African-American women. Why is that?

Veal: In my practice I’ve learned that women are much more interested, at least African-American women, in saving, investing, and talking about these concerns. They’re worried about outliving their money. They’re more conservative, they listen more and are willing to hire financial advisors. Men, on the other hand, tend to take things in their own hands. They invest more aggressively. They are not likely to divulge all their financial information when I ask. They don’t want to give that information out. I don’t know what’s going with that situation but I’m trying to do something about it.

I teach another class at a church that’s for women specifically called “Women, Wealth and Wisdom.” And it covers the importance of financial planning from a woman’s perspective because there’s a psychological difference between women investors and men.

I do have some other clients that are of other ethnicities and that’s starting to increase a little bit as they hear about me. But for some reason African-American women are the bulk of it.

SMA: Are there differences between working with your boomer clients versus senior clients?

Veal: Yes, there are. Seniors, my older ones who are already retired, they’re a bit more comfortable in retirement because they learned to save. They have less debt. Many of them don’t even have credit cards and most of them have these large pensions so they’re very comfortable. Whereas boomers today, some of them are in really deep trouble financially.

I have a lot of clients who are in deep trouble. Most of them have not saved. They haven’t invested properly. They think the companies are going to take care of them. Some of them have frozen pensions, which they’re only going to get a small proportion of that. These companies have handed off the responsibilities to the employees and they weren’t really knowledgeable about 401(k)s or retirement. So but they’re facing the inevitable that they may have to work a few more years to make up for these financial deficiencies. The real estate market and stock market [crash] and the recession haven’t helped. So a lot of money was lost and a lot of them have to find time right now to build up their portfolios. So it’s going to be a challenge for many who didn’t adequately prepare financially.