3 tips to close the wealth gap for Native and Indigenous people

November 29, 2023 6:43 PM

Indigenous and/or Native American wealth management experts.png — Indigenous or Native American-identifying wealth management experts, L to R: Valerie Red-Horse Mohl of Known; Anthony Williams of Galene Financial; Emmanuel Eliason of Eliason Wealth Management.

Valerie Red-Horse Mohl, the founder of the first Native American-owned investment bank on Wall Street, keeps tabs on what she believes is "the largest list of Indigenous fund managers in the country."

These fund managers are individuals who outperform the market, said Red-Horse Mohl, now the co-founder and president of New York-based financial services firm Known.

"But they really lack for marketing, because no one knows about them," she said.

The lack of visibility for successful Native American and Indigenous fund managers who in turn often help scale Indigenous ventures, to Red-Horse Mohl, is symptomatic of a broader problem in the industry: The long-impoverished communities they come from are becoming wealthier and savvier with money but remain overlooked by Wall Street. The resulting lack of engagement and support can hamper tribes from creating generational wealth and restoring the abundance that was historically taken from them by the American government.

But for financial advisors who want to grow their business, as younger wealthy Americans become increasingly diverse, Native Americans and Indigenous people may soon land on their radars if they aren't there today.

Entrepreneurs like billionaire Chickasaw tribal member and businessman Tom Love, who passed away this spring, have shown that some Indigenous Americans in recent generations have begun ascending to the ranks of the ultrahigh net worth. According to tribal publication PowWows.com, the wealthiest Native American tribes today include the Shakopee Mdewakanton Sioux Community in Minnesota, whose casino and resort businesses help each member earn as much as $1.08 million a year, and the Navajo Nation, whose net worth is reportedly around $2.5 billion.

Indigenous-identifying Hollywood actors are increasingly sought-after for roles in television shows and movies like this fall's Scorsese epic "Killers of the Flower Moon," which now attempt to portray Native Americans more accurately for an audience that demands better representation, creating avenues for Native celebrities to enter the ranks of the high net worth. Red-Horse Mohl herself has been an actress and filmmaker, who now makes documentaries for PBS about Native lives.

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"I think what we're seeing now is really a renaissance," Red-Horse Mohl said of Native American tribes. While many remain mired in poverty, today a significant number of Native Americans have gotten closer to economic "self-sufficiency," she said. Through her involvement in economic development, Red-Horse Mohl has helped hundreds of tribes over the years. Casino management has helped tribes fund basic resources for their people, she said, but tribes are now getting into the more sustainable business of renewable energy.

The United States currently recognizes 574 Native American and Alaska Native tribes at the federal level. In addition, Indigenous people from around the world have immigrated to and settled in the U.S., bringing their own unique cultures and financial planning needs with them. While there is much diversity among the ranks of these peoples, in general they continue to suffer a large racial wealth gap compared with other Americans. According to the National Council on Aging, which cited the most recent available data it found from 2000, Native Americans not long ago only held around 8 cents in wealth for every dollar owned by a white American household, thanks to a long history of U.S.-imposed wealth deprivation.

Financial Planning spoke with experts who identify either as Indigenous or Native American, or both, for this story. Below are five tips they shared for advisors who want to begin working with these communities, to better understand their needs.

Move beyond the stereotypes

Red-Horse Mohl, who identifies as Cherokee-descended through her father, said much of Wall Street's mindset toward Native Americans has been shaped by harmful stereotypes, ignorance and prejudices that perpetuate the racial wealth gap.

"Because you don't see a lot of role models, Native people in the professional business, there is often an assumption that we are not as literate or we are not as intelligent. Can we be effective businesspeople?" she said.

Red-Horse Mohl recalled a moment in her decades-long career when she went on an interview and someone called her agent at the time, asking if she was an alcoholic, "'You know, because she's Native American.'"

She faulted American media for its history of poor portrayals of Natives, including in Western films that depicted them as "savages."

"You just don't see the media promote images of us as businesspeople, as CEOs, as chairpeople on the board. And we have so many very, very intelligent and smart and dedicated professionals. … Just know that Native Americans are really typically beautiful people that have a concern for both the people on the planet and the planet itself."

Planning for ‘seven generations’

A top concern of "most Native people that an RIA or an advisor will come into contact with" is creating long-lasting generational wealth, Red-Horse Mohl said.

"We're going to be looking at more than just, oh, I want to make some money tomorrow and the next month or the next year. We're looking at seven generations. We're looking at true preservation of capital and what that means to really think about our children and their children and their children. So it's really important for us to think about the preservation of generational wealth. And wealth to us doesn't always mean cash or money. It can be a lot of things that we're passing down to our children." Typically, there is also great care for stewardship of the earth's natural resources, she said.

For this reason, Red-Horse Mohl's Known firm focuses on impact investing. It serves a range of wealthy clients, including "founders, family offices, and large asset owners" who often care about generational wealth and environmental, social and racial justice, beyond short-term returns, according to the firm's website.

"Their financial life, a lot of times, is intertwined with so many other aspects of their life, especially extended relationships, community relationships, social connections and other causes," financial advisor Emmanuel Eliason, who is an Indigenous member of the Nzema tribe in Ghana, West Africa, said in an interview of Indigenous clients. Eliason is the president and CEO of Eliason Wealth Management, an RIA based in Centennial, Colorado; he serves native tribal members such as the Akan, who are expats in the U.S. from across Africa.

"The way a typical client may view it: This is my wealth, this is my balance sheet, my cash flow, my family, okay, my kids legacy, maybe some other things, and that's it. Very few interconnections. Of course, people are now thinking about social impact and some other things that go beyond their personal needs. But for a typical Indigenous person we work with, that external force is very, very prevalent. … Dig deeper, and then allow them to share their heart and where they really want to make an impact."

Understand a reluctance to invest

Throughout centuries of American occupation of lands formerly belonging to Native tribespeople, the U.S. government has made hundreds of documented promises to honor treaties with tribal nations that it seized land from and forcibly displaced the original residents of — only to break nearly every one of those treaty promises. The original wall built on what is now Wall Street itself was erected to keep out Native Americans and the British from the then-Dutch settlers.

Understandably, considerable mistrust persists of American institutions such as wealth management firms. Financial advisor Anthony Williams, co-founder of Houston-based Galene Financial which offers securities and advisory services through LPL Financial, identifies with the Northern Arapaho Tribe in Wyoming. He said among tribe members, he often notices "a lack of trust" in traditional financial institutions and "a lot of people put their money under the mattress."

The hard part is to help such individuals go from cash to investing, he said, and to do that, "trust is the biggest thing" for an advisor to build. "It comes with you educating yourself" about each tribe and getting to know its members and their history, he said.

To help overcome some reluctance or hesitation to engage in financial planning, Eliason said he's created a free resource online for any individual — including Indigenous people — to create their own financial plans.