Financial inequality is a long-standing issue that can have a multi-generational impact. While there’s no easy solution, Prudential is tackling this problem from the inside out.
Today, just 1.8% of certified financial planners are Black, according to Prudential research. The typical profile of the financial services industry is dominated by white men, and while perhaps unintentional, their approach to hiring and recruiting has excluded those outside of this demographic, says Salene Hitchcock-Gear, president of individual life insurance at Prudential.
“It has long been the profile of financial services that white males have dominated that space, and for those people who understand the business and get involved in the business network, and then grow their firms and practices, they’re staying in those traditional spaces,” she says. “We really have to very deliberately go into environments where you can find those populations.”
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Prudential has recently partnered with The American College of Financial Services, an online university focused on professional training for financial practitioners, to get more Black individuals aware of career opportunities within the financial services industry, as well as recruit future advisers into the space.
This career awareness is a critical component to overall financial wellness for the BIPOC community. Just 28% of Black individuals use a financial adviser, and 64% would prefer to work with an adviser of the same race, according to research from Charles Schwab. This is an untapped opportunity for financial firms to get more business, while improving the financial lives of their clients, Hitchcock-Gear says.
“This is to really help us grow our marketplace — we across the industry have a lot of work to do to have more diverse customers,” she says. “Particularly for Black Americans, there is a stronger alignment and comfort level to talk with someone who’s a financial professional who may have similar life experiences, or they just might feel more comfortable talking about their finances, which can be highly personal and in some cases difficult. There are a lot of learnings that will allow us to do appropriate outreach in terms of bringing new people into the profession, but then also helping to sustain people once they get started.”
Prudential and American College will focus on connecting with HBCUs to highlight career opportunities. They also plan to offer educational resources to help familiarize college students with financial terms and concepts. One such program, Know Yourself Grow Your Wealth, taps into students’ attitudes around money, to help establish their own financial goals, as well as how those goals can benefit their families, too.
“From a role modeling standpoint, if you don’t know a financial adviser, you don’t know what those people do. You don’t know how to be one,” Hitchcock-Gear says. “We want to start to turn on a lot of light bulbs and help people understand not only what to do personally, but to see the benefit around how they can help others in their family and their communities.”
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The end goal is to continue to improve financial outcomes in underserved communities, a core value the organization has to connect and serve a broader customer base, Hitchcock-Gear says.
“This is not something we can do alone in order to make a difference,” she says. “We certainly want to grow our customer base, and look for new markets that we can have a positive impact on. But when we bring in the social aspect and understanding of the racial wealth gap, we really feel like we can approach this with an all hands on deck view.”