7 tips to help Black clients find multigenerational success

August 14, 2023 7:02 PM

Helping clients navigate life events like career changes, starting a family or planning for retirement is a complex, high-stakes situation no matter who you're working with.

But if your client happens to be one of the countless Black Americans who already feels overlooked or undervalued by the financial services industry, crafting a successful plan can be even more complicated without the right approach.

During the 17th Annual Conference of African American Financial Professionals in Chicago, Black advisors dished out tips for planners working with underserved families in an effort to better equip the industry to serve a populace it has long overlooked.

Organized by The American College of Financial Services, the annual three-day CAAFP gathering had the theme of "reclaiming Black wealth" and attracted nearly 1,000 registrants to the Midwest from Aug. 7 through Aug. 9.

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The goal of the event was to reinforce and elevate the conversation around how the financial services industry can inspire Black professionals and promote the advancement of underserved communities. Sessions were split into the categories of retirement, consumer connections, applied knowledge and niche markets.

The agenda coincided with the core mission of the CAAFP, which is to narrow the wealth gap and create sustainable, generational change.

Scroll down to see what advisors who led conversations at the conference had to say about the special considerations that should be taken when helping Black families pursue their money goals — and why the advice can have a positive impact on your entire book of business.

Define success

Andrew Tudor, chief wealth coach at Alchemist Wealth, said the generational wealth transfer has become one of the hottest topics in the culture. More Black people are having conversations about the importance of legacy, and there seems to be a greater embrace of financial education across generations.

Still, after so many generations of it feeling unattainable, simply defining generational wealth can be a tough task. So have that conversation with your clients and take nothing for granted.

"What does that mean to us specifically? Passing on a legacy is so broad that it's not actually a goal. So we really need to pin down what that means for you," Tudor said. "What would a successful wealth transfer look like for you? Can we think 40 or 50 years out about what you want your grandchildren and great grandchildren to know about you through the things that you pass down? I think one of the ways that we are just uniquely qualified to have this conversation is our own personal journeys."

Earn back damaged trust

Fatima T. Williams, a financial services professional with New York Life Insurance Company, said many Black and brown clients are walking into advisor offices with a lot of unseen but very justified baggage.

Even among the highest earning Black clients there may be leftover feelings of previous financial services interactions that turned sour. Times when those clients felt misunderstood, prejudged or taken advantage of.

Because of that, Williams urges advisors to cut through the sales pitches and directly acknowledge those concerns to create comfort in the room.

"It's about demystifying some of their prior issues they may have had with other companies, other firms, other banks. I've been there. I get it. We're not all bad. Let me tell you how I'm not a part of that," Williams said. "And just being intentional and walking through every confirmation from the client."

Angie Ribuffo, president and financial advisor at Raion Financial Strategies, said one commonality that she has observed is that mistrust in financial services exists because it's been passed down through generations.

Because of how common negative experiences can be for Black people interacting with financial services, there are plenty of war stories to swap whenever the family gets together.

"Many of my clients didn't necessarily experience it directly. But someone in their family did. So that's their story," Ribuffo said. "If I don't know that story, I can't level set for them. And I think that's one of the things that I've learned is that we have to hear their story."

Know your money story

On the importance of knowing a client's story, Ribuffo said pushing ahead without that understanding can create a scenario where advisors are talking at clients instead of with clients.

So keep the back and forth just that, and be willing just to listen as much as you talk.

"If it's conversational, I would start (a client meeting) off by asking what brought you here today. There was something pivotal that happened. Will you share that with me?" Ribuffo said. "Sometimes they're really hesitant. And I'll say that's okay. Let me tell you what I do and how I do it. And then I tell them my story and why I got into it. The why of why I do what I do I think is really important and will resonate with the clients.

"I'm not here, you know, to make sure that I'm top of the heap in my company or whatever it is. I'm here because I really want to help people."

Ribuffo said her story is that her husband is one of the reasons she decided to become an advisor. She said her husband is a New Yorker who grew up in the projects and struggled his whole life.

"His father died when he was 10. His mother had six children, and she couldn't work. And so she lived off of Social Security. And so he swore he was never going to do that," she said. "His story is what led me to want to help others."

Manage emotions along with money

Centario Grier, co-founder J & G Legacy Financial Group, said advisors need to understand that the Black community has a very emotional relationship with money.

So before you try to manage that money, take stock of the emotions.

"It's not logical the way it should be. So when I meet a client for the first time, there's a lot of emotions they'll display," he said. "Shame. Guilt. You hear embarrassment that they don't understand certain concepts or certain terminology. The first thing I do is let them know you're not supposed to know this. We as a community are not supposed to know and understand all this information. So first off, give yourself grace."

Once that is handled, Grier said advisors should be mindful of how overwhelming the formal financial planning process can be. Especially if your client is working with an advisor for the first time.

"They can be intimidated by us. I bring in someone and they see the suit. And it's like, listen, this is just my uniform. I'm here because I care. This is my passion. This is my purpose," he said. "So once they understand they can give themselves some grace, they can relax."

Another way to manage negative or overwhelming emotions is by grounding their aspirations with real world examples. Find ways to make it clear that their money goals are truly attainable, and it will give them something powerful to work toward.

"One of the things our people struggle with is if they've never seen proof that things actually work," he said. "So just connecting those dots, making sure they give themselves grace, giving them true stories that actually show proof that the things we're doing will work in time."

Help clients help themselves

Tudor said within the Black community, there is a strong desire for the high earners or leaders in the family to become unofficial caretakers for others.

They become the people in the family that get called wherever there is a crisis that funding can mitigate.

Because of that, Tudor said it's important to establish parameters around helping family members to make sure that their needs don't overpower a client's goals.

"We need a budget for how much family help you can afford, and that number has to come after we define what your goal is and what you need to do to get there. I find that one of the most difficult things in planning is opening the lines of communication up. And one of the ways we try to do that is offering it discounted because we were fee-based planners," Tudor said. "That part of it makes it just a little bit easier on the financial side. But it's still really hard. Guilt. Shame. I think pride is like right there."

Work backward to secure your future

As more Americans come to grips with the idea that they may never retire, Williams said she likes to get into the retirement conversation by working backward.

She said because of how much the idea of retirement has changed over the years, it's valuable to have clients lay out what their ideal situation is and chip away the obstacles until that dream becomes reality.

"A client says I want to retire at 55. Okay, let's do this math and work backwards, right? Let's talk about what it really looks like for you to be paying for certain things out of pocket or funding certain things for your family," she said. "And then I have people who are older who are like, I don't want to not do anything after 65 or after 70. Even my grandmother, who is 88, has her schedule. She goes to the grocery store, she goes here, she gets on the bus, she's active because she doesn't want to be home forever."

Ribuffo said very few of her clients come to her and say they want to retire because many believe they can't, nor do they see it as an end goal.

"A lot of them are more focused on their children, getting their children into college and paying for higher education. They say because I didn't do it, I want my children to do it," she said. "Statistically Black families are at a disadvantage when it comes to funding education. And they put their retirement goals on the back burner in order to fund their children's education. My question to them has always been, what's the plan for you when your children are out of the house and on their way on their journey? Now what happens? Because you've now backed off of all the things that you needed to do in order for you to get to whatever your endgame is successfully."

Bring in the family

There cannot be multigenerational planning without multiple generations. And Tudor says bringing other members of the family into the conversations is something that should be considered from the beginning.

"I think family meetings are essential. I found that one of the best ways to open that line of communication is to have an agenda that we share with the clients and say, we should bring your three children. And this is what we're going to go over," he said. "You start getting (children) involved with this … so they start being trained how to use money effectively, at an early age. And I think the parents can see the children learning and growing.

"We can be the teacher and the facilitator. I think it's extremely powerful. And it's traditionally only been reserved for family office level planning. And it doesn't have to be now with technology. We can bring them in, we can do it virtually across the country. And we can just start making this a family conversation instead."

Grier, meanwhile, drives the importance of family discussions home by making it clear that a client's assets won't follow them to the afterlife.

"We're all going to pass on. You can't take it with you. Your money, your assets, your wealth, it's only going to go to three places: Uncle Sam, charity or your family. Who do you want to get the least?" he said. "What I'm doing is getting them to understand whether you want to take time or not, your money is going to go somewhere anyway. Why not direct it where it should actually go?"