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Victims of domestic abuse
may find their abuser also
has damaged their financial
life.
Reasons why those who are
widowed keep their
advisors, switch advisors or
become unadvised.
with more than $130,000 for the average white household. In fact,
MORE
e African-Americans have known for years that when
America gets a cold, we get pneumonia. This statement
especially holds true when it comes to the growing retirement crisis.
While Americans in general are severely underfunded for
retirement, black Americans in particular lag even further behind.
According to The Ever-Growing Gap: Without Change, African-
American and Latino Families Wont Match White Wealth for
Centuries released in August 2016 by the Center for Enterprise
Developments Racial Wealth Divide Initiative, the average black
household has less than $20,000 in retirement savings compared
almost 75 percent of African-Americans have less than $10,000 in
retirement savings, compared to just 48.6 percent of white
Americans.
Multiple factors contribute to this wealth gap. They include reduced
homeownership in the wake of the biggest recession since the 1920s.
This is particularly important given that housing equity makes up a
substantial portion of wealth for so many. African-Americans were
especially devastated by the foreclosure crisis and the effects of
underwater mortgages. As a result, significant wealth was lost in our
communities due to the Great Recession.
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Also troubling is the fact that more than half of African-Americans
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plans. Even when these plans are made available, blacks not only
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When it comes to retirement security or more appropriately called

retirement insecurity the data is startling. In a report issued by
the Center for Global Policy Solutions (CGPS) addressing the
retirement dilemma of African-Americans, the authors state that
more than two-thirds of African-Americans are considered liquid-
asset poor. This means that blacks do not possess sufficient assets to
make ends meet. Further, 83 percent of African-Americans lack the
resources needed to last throughout their lifetime, even with their
shorter average life expectancy.

African-Americans also rely on Social Security benefits for a greater

percentage of their retirement income than whites do. Social
Security represents 100 percent of retirement income for more than

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Helping African-American Clients Bridge The Wealth Gap | InsuranceN... http://www.insurancenewsnetmagazine.com/article/helping-african-amer...
36 percent of blacks. This leaves many black retirees living at or
near poverty levels.

What can the financial services industry do to help close the racial
wealth gap? First, it is important to understand that the racial
wealth gap is not entirely due to a lack of financial education or poor
financial choices on the part of blacks. It runs much deeper. Decades
of discriminatory policies and practices have contributed to the
current financial state of African-Americans and other minorities.
Some of these discriminatory policies exist to this day. We simply
cannot plan our way out of this situation.

New York Lifes African-American Community Empowerment Plan

represents an example of what our industry can do to help close the
racial wealth gap. In an effort to change the financial future of
families through inheritance, agents within the organization have
committed to generating $50 billion of life insurance protection in
the African-American community. By providing at least $250,000 of
coverage for 200,000 families, the company is well on its way to
reaching the $50 billion goal sometime this year.

The tax-free proceeds received from the insurance policies can be

used by the beneficiaries to make a down payment on a home,
provide startup capital for a business venture or pay for college
tuition, thereby minimizing student loan debt.

Additionally, increasing the number of African-American financial

advisors also can contribute to better economic outcomes for black
communities. More

African-American advisors would help rebuild the trust that has

eroded over the years and place a greater emphasis on the
importance of working with an advisor. The American College of
Financial Services has launched an African-American Diversity
Scholarship aimed at doubling the number of black financial
advisors from the current rate of about 8 percent over the next 10
years.

While it will take generations to close the racial wealth gap, these are
steps in the right direction. The financial services industry must
work alongside other thought leaders to dismantle the systemic
policies that have had and continue to have a negative financial
impact on black and other minority communities.

Jocelyn Wright is the chair of The State Farm Center for Women and Financial
Services at The American College. Jocelyn may be contacted at
jocelyn.wright@innfeedback.com. (#).

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