Shrinking the wealth gap
Financial advisors of color also matter because financial advisors can play a part in reducing the racial wealth gap, said Olamide Ajibesin, managing director of transaction advisory services at Anchin Accountants and Advisors in New York City.
“There should be more people of color (Black, Hispanic, Asian, etc.) in financial services because this industry in particular has a significant influence on our socioeconomic progress, from macro-level principles like GDP to individual- and corporate-level decisions, such as businesses, entrepreneurship and overall wealth creation,” Ajibesin said.
“The racial wealth gap is arguably the greatest site of racial inequality in America. For every $1 that a white American has, a Black American has around 10 cents,” said Jacob Faber, associate professor at New York University, who researches how the distribution of people by race and class creates and sustains economic disparities.
Faber said that often people in communities of color are excluded from the primary financial tools used for wealth accumulation, such as affordable mortgage financing, credit and access to financial services and institutions.
“In terms of growing and inheriting wealth, people of color are far less likely to inherit wealth from their parents and when they do, it’s on average in far smaller amounts. And, at the same time, people of color are far more likely to have to financially support aging parents — so they are squeezed from both of those dynamics,” he said.
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