U.S. Bank seeks to narrow wealth gap, boost African-American finances

U.S. Bank seeks to narrow wealth gap, boost African-American finances
The key for financial advisors seeking to tap into the widely underserved black community is to be culturally sensitive.
JUL 17, 2024

Following the death of George Floyd, U.S. Bank decided to look for ways to economically uplift the African American community and narrow the wealth gap. It didn’t have to look very far, according to Scott Ford, president of wealth management at U.S. Bank.

“U.S. Bank is headquartered in Minneapolis and George Floyd Square is a mile and a half from the office. We can see it from the buildings,” said Ford. “So we went on a listening tour and engaged community leaders and business leaders.”

Ultimately, the team found that the African-American community needed greater access to financial information and resources. As a result, Ford said they launched an overarching strategy called Access Commitment to focus on individuals and businesses in those underserved communities.

Ford, who grew up in a middle class household on Long Island, says home and real estate ownership is one of the biggest ways African-Americans can increase their wealth. He cites a statistic that black Americans have a homeownership rate of approximately 45 percent versus 75 percent for the white population in the country.

“We did a building black wealth insight study a couple of years ago, and homeownership was one of the most important things to the black community, especially those who were affluent and trying to build wealth,” said Ford. “Increasing homeownership and using real estate as an investment vehicle, not just to build wealth, but to pass along intergenerational wealth to subsequent generations.”

When it comes to the biggest financial mistakes made by members of the African-American community, Ford says first and foremost is not having an emergency fund. It's a danger not unfamiliar to other communities in America, but one that he calls “pervasive” in black neighborhoods.

Another financial risk often found in black communities, according to Ford, is overwhelming debt loads.

“Most people don't realize that across all Americans, more than half could not come up with $500 in the event of an emergency. So what happens? The hot water heater breaks, you get an unexpected expense, and then you end up running up a lot of credit card debt,” said Ford.

In terms of investing, Ford says he always encourages people to contribute to their work retirement plans and take advantage of any matching programs. He adds that it's especially vital for African-Americans who “have generally had less information about how those programs work.”

Finally, for financial advisors seeking to tap into the widely underserved black community, Ford says the key is to be "culturally sensitive" because a high percentage of African-Americans have at some point had a difficult interaction with banks or bankers.

“A lot of our research has shown us that there's a general distrust of the financial services community. So just be sensitive to that, be aware of that when you go into the conversation,” said Ford.

African-American market remains untapped for financial advisors

Latest News

Carson Group deepens Colorado presence with Arvada advisor deal
Carson Group deepens Colorado presence with Arvada advisor deal

The Omaha, Nebraska-based RIA's latest acquisition expands its Rocky Mountain footprint after two prior Colorado deals last year.

Slow advisor transitions are costing RIA firms money and talent, and the industry is starting to act
Slow advisor transitions are costing RIA firms money and talent, and the industry is starting to act

Operational drag between an advisor signing and accounts going live is emerging as a competitive liability for wealth management firms.

M&A on course for second-highest year ever as megadeals surge and AI complicates the deal equation
M&A on course for second-highest year ever as megadeals surge and AI complicates the deal equation

Bain says companies face a "winner's paradox" as AI transformation collides with complex integrations.

Rumor confirmed: Corient expands with European acquisition
Rumor confirmed: Corient expands with European acquisition

Deal lifts global assets to roughly $523 billion under management.

What wine culture can teach investors about decision-making
What wine culture can teach investors about decision-making

Choice anxiety, prestige bias, and the temptation to make selections based on outsourced confidence are just some of the parallels between investing and the world of wine tasting.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.