Cracking the code

Tiffany Gray is a hot commodity.

At 22, she is about to graduate from Delaware State University with a degree in financial planning (and a plan to earn her CFP credential immediately). She’s a woman. She’s Black. And she practices what she preaches: She’ll graduate debt-free, having worked her way through school.

She can hardly wait to start her career in a field that claims it can’t get enough new graduates just like her.

If it weren’t for DSU professor Nandita Das, Gray might never have discovered financial planning as a major and potential career.

Gray arrived on campus thinking she’d pursue law. Then she heard an energetic pitch from Das in a session intended to introduce freshman to fields they knew little about. At the very least, Gray figured, she’d gain personal finance skills that could help her guide family and friends. But soon into her first course, “I was sold,” Gray said.

Turns out, this is exactly the process that pulls Black college students, especially women, into financial advisory careers. Black culture positions financially savvy family members as experts and also assigns senior women as family authorities. The client-centric orientation of credentialed advisory practices dovetails neatly with the aspirations of many Black students, especially young women, to build careers that apply credentials to social missions. Suddenly, it all snaps into focus with the killer combination of authenticity and aspiration.

Currently, only three of the 100 self-reported historically black colleges and universities, or HBCUs, offer degree-granting financial planning programs, said Philip Dawson Jr., newly installed director of college and university relations with the Certified Financial Planner Board of Standards Inc. One of his priorities is to expand the number of all schools that offer formal financial planning programs, including both HBCUs and others with organically high proportions of Black students, such as Southern public universities.

Getting the profession on students’ radar is the key, he said. They discount financial planning as a potential major and career because they simply don’t know any financial planners — understandable when Black planners represent 1.9% of certified financial planners, according to just-released CFP Board data. By contrast, 5.4% of physicians are Black, as are 5% of lawyers.

Students can be forgiven for initially overlooking financial planning programs, in the opinion of Kimberly Watkins, assistant professor of financial planning, housing and consumer economics at the University of Georgia.

Historically, financial planning was buried in consumer sciences and similarly opaquely titled departments. “All of the programs have to do a better job to make it apparent that we exist,” said Watkins of the profession’s presence at colleges overall. Her department tweaked its name to formally install “financial planning” in its title. 

SEEDING A NETWORK

Even as students become familiar with the profession, they question their ability to build a practice, especially if success is mainly presented in terms of clubby networking. If building a practice is introduced in terms of tapping friends and family, students from modest backgrounds immediately count themselves out because they know that their friends and family don’t have enough assets to seed a network.

The profession does itself no favors by cultivating an upper-crust, exclusive image that is both culturally tone-deaf and off-putting to democratically minded college students. Today’s students don’t want to work only with affluent people whom the profession deems as having arrived, and they certainly don’t see how they can build a practice of clients whom they don’t relate to and don’t want to relate to, Watkins said.

“When you have AUM models that require $500,000 or a million in investible assets, that leaves a lot of people out of the mix,” she said. “That makes a lot of people think they aren’t included in the target audience for financial planning, because of those business models. We have to break through to let students know that there are different types of compensation models.”

All students who are the first in their families to go to college assume that they aren’t what the financial planning profession wants, Michael G. Thomas Jr., a lecturer at the University of Georgia, said. “This isn’t just a Black thing. It’s a socioeconomic thing,” he said. “My African American students who come from wealth, where they have social capital through relationships with doctors and lawyers — they don’t have an issue navigating this space. For those students who see the profession as something they want to pursue, but don’t, it’s because of their perception of themselves as working class versus working with those who are of a higher socioeconomic class.”

The light bulb goes off, though, when students realize that it’s professional skills and results that clients ultimately value, not country club connections. And the latest generation of students tends to be less constrained by old-line business models, Dawson added. “They realize that other young professionals have wealth that needs to be managed and they realize, maybe those biases aren’t so true.”

“I am very intentional about highlighting ways that current CFPs are working with clients,” Watkins said. “A lot of our students want their work to have a positive impact on others’ lives. We spend a lot of time unpacking myths [about the profession].”

What cracks the code?

At schools with rising enrollments of diverse financial planning students, the bull’s-eye is the immediate utility of basic financial planning skills. Typically, say professors, students take an introductory financial planning course thinking that they’ll gain some solid life skills for themselves and their families. When they realize the scope of planning, they are struck by the career possibilities.

That’s the angle that Nandita Das used to win Gray and dozens of others, mainly young women and many from underrepresented ethnic groups, into the financial planning program she directs at Delaware State. In the basic financial planning course that’s part of the program’s core curriculum, Das centers material around important financial decisions that feel immediate to students’ life goals. “I ask them, where do you want to buy a house? When?” she said. “I make it as practical as possible.”

Then she expands the relevance to students’ families. Suddenly, they’re applying their brand-new skills to scenarios that could have helped a loved one avoid a financial misstep, and a baby planner is born.

FAMILY CULTURE MATTERS

Black American family culture cuts both ways but can position Black young women for success in surprising ways.

Family expectations often complicate Black students’ pursuit of financial planning, Alex David, incoming chair emeritus with the Association of African American Financial Advisors and CEO of Stifel Independent Advisors, said. Black students often graduate with debt — and parental pressure to pay it off. That doesn’t square with the business model of many advisory firms, which often expect new graduates to take scant pay while spending time and money to earn advisory credentials and build a book of clients.

Students’ discovery of the profession needs to be matched with a compelling personal business case, David said. “It’s up to the industry to work in tandem with the schools to develop a better way for them to onramp with less variability in their income, so we can match what other industries are providing,” he said. “If there’s a starting salary with a tech company of $65,000 or $85,000, versus variable income, they’ll go with the salary.”

Tanya Taylor realized that the power that Black family culture ascribes to its women can fuel Black women’s career ascendence and used it to power her own midlife career transition. After a couple of decades wielding her CPA and MBA degrees at regulatory agencies, she opened her own financial coaching and financial services firm.

Black Americans are skeptical of financial institutions for good reason, Taylor said, citing systemic discrimination through lenders’ redlining and, just last year, systemic undervaluation of Black-owned houses. That’s why Black families turn to the most expert among them for financial advice, even if that person isn’t actually all that well-informed.

When young Black women combine technical expertise with their families’ inclination to christen them as go-to experts, they have a powerful career accelerant, Taylor said. “They realize they can start to change the trajectory of generational wealth in their community,” she said.

Gray is already flexing the influence that her community is eager to ascribe to her. She counsels other students and frames her own story as a savvy combination of bootstrapping and building on the solid platform provided by her college-educated parents.

“As women, you always want to support your community and family. You want to be that person others rely on,” she said. “In a lot of minority cultures, the women hold a lot of respect and authority. People look to them for guidance and advice. Being in that position to provide sound life and certified financial advice — it’s so liberating.”