LeCount R. Davis, 50 years an advisor and the first African American to earn the Certified Financial Planner designation, takes stock of opportunities for blacks in financial services and cuts to the chase: “We’re not welcome.” As for white investors’ attitude toward hiring black advisors, it’s “benign neglect — unconscious bias,” he tells ThinkAdvisor in an interview.
At 82, Davis has just released his autobiography, “One Step Back – Two Steps Forward: The Dance of My Ultimate Plan” (AuthorHouse-Jan. 6, 2020). “I pray that I can be a beacon of light for aspiring financial planners and advisors in helping our communities become better stewards in handling money,” he writes.
The industry pioneer and founder of the Association of African American Financial Advisors says his mission now is to prepare the next generation of black FAs for the long-talked-about diversity and inclusion movement that, as yet, has not materialized.
In the interview, he reveals why — at the same time, detailing his own “I Did It My Way” career path and what he calls “The Big Three” of financial planning.
Still serving fiercely loyal clients, Davis went on his own early, building a fee-only practice in the 1970s with help from a few important mentors. Well, they were more than a few, he says: they were “a village.”
He grew up in a poor neighborhood in Washington, D.C., but went on to earn a bachelor’s degree and a master’s, both in accounting from Southeastern University.
During those years, the industrious student worked as a clerk-typist at the U.S. Patent Office, then as an accountant clerk at the Federal Housing Administration. He also taught finance at Howard University and hosted a local financial TV program.
His first career job was at a small black accounting firm, King/Reynolds, in Baltimore. By 1970, he’d gained sufficient experience there and by way of a subsequent international job to launch his own financial and tax advisory practice. His client base: 95% African-American professionals.
ThinkAdvisor recently interviewed Davis, on the phone from his office in Potomac, Maryland. As a new solo advisor, he eagerly connected with D.C. movers and shakers. Not long thereafter, he became one.
Here are highlights of our interview:
THINKADVISOR: Do you still work with clients?
LECOUNT DAVIS: Yes, they just won’t leave — I’ve had clients for 40 years. They won’t let me assign their accounts to anyone. They say as long as I have control of my faculties, I’m their financial advisor. That’s the kind of business we’re in: If you strike up a relationship where the trust and confidence are there, it doesn’t go away.
You were the first African American to earn the certified financial planner designation (CFP), and you founded the Association of African American Financial Advisors (Quad-A). Are you optimistic that more blacks will be welcomed into the industry?
We’re not welcome. I’m not saying there’s a lot of hate. I don’t mean that. I’m just saying if we don’t take care of ourselves, we’re going to be in trouble.
My mission is to prepare the next generation of African American advisors for the diversity and inclusion movement that’s been talked about for years but that hasn’t [happened]. I’ve been hearing people talk about diversity and inclusion for years. Now the major firms are looking for ideas on how to improve upon [attracting] ethnic groups, especially African Americans, into the industry, which has changed and as a result, has slowed down progress.
What’s needed for blacks to become a significant factor in financial services?
For us to move [forward] as a race, we’re going to have to be involved in decision-making, like coming up with new products or how to reach certain [markets]. We’re far from that. Being hired for a job isn’t inclusion. They hired you — that’s diversity, not inclusion.
What else is needed for African Americans to move increasingly into financial services and up the ladder?
At one time, [the industry] said the problem was lack of education. They can no longer say that because at Quad-A, for example, everybody is well educated and has graduated from some of the best schools in the country. So now they’re saying, “You don’t have experience.” But you don’t get experience unless someone gives you the opportunity to get experience.
Broadly, what’s the attitude of potential clients who aren’t black toward African American advisors?
We’ve been given benign neglect — unconscious bias. It’s normal for people to do business with those they know and feel comfortable with. But [most] don’t know us and therefore don’t feel comfortable with us. They don’t care what university we went to.
Did you encounter racism when you were building your business?
No. The only time was when I was in the third grade. Kids were playing around throwing rocks in the playground, and they threw one that hit me in the back of the head and was embedded there. I was lying on the ground bleeding. My teacher took me to the closest hospital, but they weren’t taking blacks. They just removed the rock, patched me up and sent me to another hospital, which was the hospital for blacks. But I kept bleeding and bleeding. The doctor said that if it had been 20 minutes later, I would be dead because of blood loss.
Flash forward now, please: When you were starting out in the industry, some influential people mentored you. Tell me about that.
A village raised me. I had people who were behind me all the way. Had it not been for them, I would have had a tougher time. God was taking care of me anyway, but I know these people made it a lot easier.
Who were they?
The [late retired Air Force major general] Robert Ginsburgh was very important to me. [Post-military, a financial planning firm chairman.] After I became the first black to have a CFP designation, he said, “You got to the table because you passed the examination, but that doesn’t get you anything off the table.” He told me I had to identify my marketing base and then build on top of that.
What prospects did you target as your base?
African Americans because in D.C., there weren’t too many other people that were going to come to me to represent them. Ginsburgh, who was Jewish, even told me: “Don’t make my people part of your marketing base. We support our own. If you try to depend on us, your base will be weak.” He wasn’t being condescending; he was telling me to set realistic goals.
How soon before you built a base?
I already had clients from King/Reynolds [the black CPA firm where he became an FA]. My base consisted of 95% African Americans. They were professionals: doctors, lawyers, and high-grade federal government workers and contractors.
What else did Gen. Ginsburgh advise?
He told me that to bring in cash, I should have multiple income [sources]. So my secondary concentration and profit center was preparing federal and state tax [returns].
How financially smart were your clients?
They made money, but they did everything on a cash basis and spent everything they made. They weren’t retaining anything. They weren’t doing estate planning or transferring their money to the next generation.
Did you have any other significant mentors?
Alexandra Armstrong [chair emeritus of financial advisory Armstrong Fleming & Moore]. She protected me from the time I became a planner and, as the first black CFP, joined the International Association for Financial Planning [predecessor to Financial Planning Association]. She was president of the D.C. chapter.
How did she help you?
She [Caucasian] befriended me when I was the only black at the meetings and symposiums. People just ignored the fact that I was there. No one came over except Alex. She gave me her hand and has been with me all this time.
How did she help specifically?
She told me: “When you come in, come in like you’re supposed to be here. There’s no need for you to feel like you don’t belong.” She put me on several of her committees. After she stepped down, I became president of the D.C. chapter, the first black in the country [to head a chapter]. This is a white boys’ club, to tell the truth. Alex and Ginsburg seemed to run interference for me — they wouldn’t let anybody bother me.
Any other mentor that stands out?
Judge Lucy B. Warr, a [black] client at King/Reynolds. She taught me how to be a gentleman — how to carry myself. She’s been my client for 50 years.
Nowadays, do you find any resistance from prospects who are white?
My investment manager associate, in Alexandria, Virginia, who’s black, has a five-star mutual fund, but [white] people who aren’t in their comfort zone [with blacks] believe it’s riskier investing with him than [say] Vanguard, even though he’s investing in the same companies.
They feel that way just because he’s black?
What are some changes for which you’re preparing the next generation of African American financial advisors?
I’m telling them exactly how they should position themselves for what I see coming: changes in regulation, and also the industry is moving to zero commissions for online trading [among other changes].
What was your career path to becoming an independent advisor?
When [both partners at] King/Reynolds left the firm [Reynolds after King], Arthur Reynolds gave me all his clients and introduced me as his successor. That wasn’t a problem because I was doing all that work anyhow. So the clients already knew me.
Where did you go from there?
Arthur suggested me for a job that he turned down. It was for the American Institute for Free Labor Development, affiliated with the AFL-CIO. I became an economic development and financial specialist based in the Caribbean and South America.
How long did you stay?
In 1969, when I was in Quito, Ecuador, [the Institute] told me to pack up right away and go to Bogota, Columbia, where I’d be briefed on my assignment. I said, “I’m not going until you tell me who I’m going to see and what I’m going to do.” I wasn’t in the Army! But they wouldn’t tell me. So I felt it was time for me to leave the company and go out on my own.
When did you do that?
I took the next flight to Washington, gave in my resignation papers and set up shop.
What’s your basic approach to financial planning?
I’ve always put the client first. That’s nothing new to me. When they introduced [regulations concerning putting clients’ interests first], I wondered: “Doesn’t everybody do that?”
How important is it to have a financial plan?
People should never invest without a plan because you don’t know what you’re investing for. You’ve got to have three things in the plan: goals and objectives, time horizon and risk tolerance. I call them “The Big Three.” Unless you’ve got “The Big Three,” it’s like walking in the dark.
To digress: You have a very unusual first name!
Yes — so unusual that my grandmother refused to call me LeCount. I was named after the doctor who delivered me. That was his first name; normally, it’s a surname. My middle name is Roscoe. A big difference from LeCount! But it’s what my mama named me. So I don’t have a problem with it at all.
— Related on ThinkAdvisor: