Black entrepreneurship is generating significant new wealth, often among first-generation affluent households. For financial advisors, that shift is changing both how client relationships begin and how long-term wealth planning is structured.
According to James Thompson, head of Diverse and Multicultural Wealth Segments at Bernstein Private Wealth Management, the rise of first-generation wealth creators is pushing the advisory industry toward deeper, more personalised planning relationships.
“We’re seeing a growing shift toward ‘planning-first’ and ‘planning-focused’ relationships in wealth management,” Thompson says. “This means the relationship is starting with deep discovery and meaningful conversations around clients’ priorities and values, and not just ‘how much’ wealth they have.”
In an interview with InvestmentNews Thompson explains that many first-generation wealth creators build significant financial assets without the benefit of inherited wealth or established financial networks, typically starting from scratch and frequently with limited resources.
“As a result, advisors are investing more time in foundational planning to provide equitable advice and tailored solutions, addressing the critical questions that many first-generation wealth creators may not even know to ask,” he notes.
Many new high earners are building wealth without traditional advisory networks or family financial blueprints. Thompson says that without guidance, that success can quickly introduce financial risks.
“Building wealth often comes with significant complexity, making access to quality advice and planning critical,” he says. “Without proper guidance, wealth builders and creators may face five key challenges: wealth erosion, tax inefficiency, estate planning issues, excessive risk exposure and the emotional consequences of planning malpractice.”
The solution, he adds, is often broader than investment advice alone.
“Working with an advisor who can provide a comprehensive network of resources and professionals is crucial to helping new wealth creators and earners navigate both the benefits and complexities of their wealth journey effectively,” Thompson says.
Sudden wealth can also bring behavioural and emotional challenges that shape how clients spend, invest and support others.
“Advisors often see a tension between wealth creators’ desire to enjoy their success today and the need to protect their wealth for the future,” Thompson says.
Family expectations frequently play a role as well.
“Many clients feel pressure to support extended family or their community, which impacts their spending and liquidity decisions,” he says. “On the investing side, some clients may become overly conservative out of fear of losing wealth, while others take on too many risks.”
For advisors, guidance and structure become essential tools.
“Providing coaching and establishing a clear structure are critical to helping clients find balance and mitigate the potential for strained relationships,” Thompson says.
Despite good intentions, Thompson says advisors can miss the mark when working with multicultural or first-generation wealthy clients.
“Many advisors often assume that success looks the same for multicultural or first-generation wealthy clients and families as it does for their general client base,” he says.
In reality, those definitions of success are often shaped by unique experiences and barriers.
“These clients often have distinct definitions of success shaped by their unique backgrounds and experiences,” Thompson says. “The reality is these clients have had to overcome significant barriers to access and advice, which influences their financial goals and priorities.”
To address that gap, advisors need deeper discovery and more tailored strategies.
“Even with the best intentions, advisors need to recognize and honor these differences by engaging in deep discoveries to truly uncover what success looks like to each client,” he says. “By doing so, they can tailor resources and strategies that align with the clients’ specific wealth journey and needs.”
“This personalized approach is what we feel is an equitable approach to wealth management that supports and empowers first-generation and multicultural clients.”
For retail investors building wealth through entrepreneurship, name-image-likeness (NIL) opportunities or social media income, Thompson says the most important step is building a structured financial foundation early.
“Regardless of the source or amount of income, we believe wealth creators must first assess their needs and circumstances by carefully evaluating their goals and priorities, assets, potential investment vehicles, and risk appetite,” he says.
That process helps shape key planning decisions.
“This foundational process helps determine planning strategies around taxes, protection, investments, and allocation,” Thompson explains.
Establishing that structure can also prevent a common psychological challenge that comes with rapid financial success.
“In our view, taking this approach can help new wealth creators avoid ‘sudden wealth syndrome,’ where individuals feel overwhelmed and unprepared to manage an unexpected windfall of wealth,” Thompson says. “By establishing a clear understanding and plan early on, wealth creators can better steward their newfound resources and make informed decisions for long-term financial success.”
As wealth creation becomes more diverse across industries and communities, Thompson expects advisory firms to compete in new ways.
“Wealth creation is becoming more diverse across industries, geography, and backgrounds,” he says. “Firms will compete less on investment performance alone and more with the breadth of planning and client experience they offer. Success will be measured more on outcomes and not output (pure performance play).”
Advisors who can deliver personalised guidance will have the advantage.
“Advisors who can make the necessary planning resources accessible and deliver the knowledge mentorship required to address the complexities of their client’s wealth planning needs, influenced by their experience and subjective definition of success, will have a growing and long-term competitive advantage,” he says.
For advisors seeking to build trust with emerging multicultural high-net-worth clients, Thompson says one quality stands above all others: advocacy.
“Advisors need to selflessly champion an unwavering commitment to address the gaps afforded by one’s experiences and advocate for the emerging wealth creator’s desire for community building, supporting their families and changing the trajectory of wealth, impact and influence across generations.”
For many of these clients, wealth is about more than individual success.
“These creators think beyond personal fiscal success,” Thompson says. “They are redefining what it means to be wealthy and reshaping the future of the ultrahigh-net-worth landscape.”
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