Picture a market with close to $1 trillion in annual spending power, a growing demographic of more than 42 million people, increasing education levels and salaries, and 9 million baby boomers that are expected to retire within the next 20 years. Who are they? If you guessed the African-American market, you’re right.
This is a target market to be reckoned with. The fact that many of them are ill prepared for retirement means that there is a huge opportunity for advisors. 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?” My mission here is to give you some information and tools to see if this is a niche market worth pursuing for your practice. But first, a brief snapshot of the African-American consumer.
There has always been an estrangement of sorts between the financial services industry and minority communities. It isn’t that nobody cares, but in many cases financial institutions have neglected to define the Black consumer as someone with a unique set of needs and concerns. As the number of minorities in this country continues to increase, industry leaders have started to project the impact this could produce for their bottom lines. Recently, I have noticed an increasing number of articles and news reports on the benefits of marketing to the minority markets.
Each year, a slew of studies and surveys report on the financial behavior of African-Americans. The results consistently conclude that respondents are highly interested, and that they need and want the services of financial advisors. Even though some Blacks are earning more money and pursuing advanced degrees, too few are creating strategies to help build wealth, savings, businesses, and generational wealth.
In part, this is because of the severe shortage of professional financial advisors working with this market. As a financial advisor who happens to be an African-American, there is not much competition in my locality, which is a problem. In fact, it’s an epidemic. There are just not enough available advisors to help African-Americans with their finances. This could be an opportunity for you.
Your secret weapon: visibility
I would like to share some marketing efforts that have helped me continue to build a growing and thriving financial services business. But first, I must say that reading, attending financial forums and conventions, developing a solid marketing plan, 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. That said, the one SECRET I have found that works best in this market — and in the financial services industry in general — is that 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.
Now, here are a few effective tactics that you can easily implement right away in marketing to the underserved African-American community:
- Teach a basic, 5-week financial education course at your local community college or university one night a week. This will give you the opportunity to share your knowledge with those who are interested in improving their financial understanding. You will improve your speaking skills, gain instant credibility and be in an excellent position 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 with the church you worship at or one in the area. Nearly half of African-Americans in a recent Prudential survey said they are interested in learning about investments through a faith-based organization. Church leaders are usually more than happy to have you come in and educate their congregation on the importance of money management and basic budgeting skills. These concepts are sorely missing in the African-American community. The objective is to build credibility, trust, honesty, relationships and to show them that you care. You have to first plant the seeds and the fruit of your labor will be rewarded in due time.
Commit to providing these workshops on a monthly basis. Do not forget, you are in this for the long term. 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. I have an office in town and it is a great opportunity to meet and speak with a good number of people at one time. Many companies are ideally located in town and it’s quite easy for them to drop by, have lunch, and find out 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. Before you know it, you may have to implement a pre-registration system to keep the seminars at a manageable number. That is a good problem to have.
- Help schoolteachers and educators with their employer retirement plans. Talk with the 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, hopefully they will then hire you to help them invest the rollover money. It may take some time to see any results, but it really works. You have to be very patient working with educators.
- Get involved in your community. Solidarity and concern for the financial well being of their community is very strong among African-American decision makers. Take the time to participate in community events, charities, art exhibits, and networking events. This market is 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 increasing efforts to connect are required in order to create long-term, mutually beneficial relationships.
The African-American market segment is one of the largest growing minority groups in America today. It is making tremendous gains in overall income and education. Financial institutions and marketers are devoting more attention to this demographic group and positioning themselves for market share. Financial advisors have an excellent opportunity to increase revenue by pursuing this severely untapped market. All you have to do is get out there and be seen!
For more exclusive coverage of the African-American market, see also: