Journal of Financial Planning: November 2021
WHO: C.W. Copeland, Ph.D., ChFC, CLU, RICP
WHAT: Assistant Professor, American College for Financial Services; financial planner, Innovation Partners, LLC; author, Overcoming Obstacles: Experiences of Black Financial Services Professionals
WHAT'S ON HIS MIND: “The numbers are increasing for minorities in the field. I don’t know if it’s because the largest population of advisers are older white males and they’re not recruiting more people into the field that look like them. I’m not sure, but it could be because minorities have made a decision that this is an opportunity for us in this field that we didn’t realize existed.”
Can you tell me about your inspiration to write this book and how you got started with the process?
Initially, I was looking at it from a standpoint of empirical research. What I was curious about was whether, specifically African Americans, their ability to transfer wealth was impeded by their ability to grow their practices. If I can’t build wealth, then I also can’t transfer wealth. I talked to advisers to find out what they’ve experienced. These are mostly advisers who have had 20-plus years in the business and have either stayed with their company or transitioned through multiple companies.
Was there anything that surprised you as you worked on your book?
Well, one of the things I found is a lot of advisers said that they didn’t have an initial target market of African Americans, but that ended up being the bulk of their clients, and then they decided that would be their focus because they weren’t getting traction from non-minority clients. I had that assumption, but I wasn’t certain about it. We could look at non-minority advisers and see that they have clients across the spectrum, but mostly minority advisers had minority clients.
There’s an anecdote in your book about a financial magazine that showed a picture of a diverse group of people and asked which of these is a financial adviser, and most people identified the older white man. How does that perception make it harder for this industry to change?
The question is, who do people feel have the credentials to help them? What they look like—whether male or female, minority or non-minority, or whatever those demographic issues are—should be less of an issue than whether they have credentials. Credibility should line up with credentialing. I actually have a Ph.D. in financial planning and am practicing, but I run the risk of not being able to get clients in other races. When you get to the wealthier minorities, they’re less likely to work with us. I can’t say it’s strictly because of race. Sometimes it’s because they want to work with big-name firms, and when they get to those types of companies, they’re not assigned to a minority adviser, which is fair. The company shouldn’t be directing minorities only to minority advisers. But if they only want to work with those big-name firms because of the name of the company versus the quality of the adviser, that’s a different thing. If you are a minority and you’re trying to bring in assets, and you only go to minorities to attain those assets and you’re not getting the wealthier minorities, you run the risk of not staying with the firm.
Are there any parts of the industry where you are seeing progress, or any changes you see happening that give you hope or encouragement that we’re making some progress?
I actually see it on the insurance side more than on the investment side. They hire a lot of people new to this industry, but they’re going out, finding minorities, and selling them insurance, which is a little bit different than people trusting you with their hard-earned money. From an insurance standpoint, people look at it as a product. You can go back and forth over term life or whole life, but it’s not an issue of “Do I trust what you’re saying?” but the product itself. That’s different from putting money into the market, and this person is having them manage their money and they’re losing money. People are becoming wiser to the fact that you need to put money in the stock market. There’s been a lot more education in minority communities about investing. People are starting investment clubs or listening to all the podcasts that are out there.
What advice or encouragement would you offer Black students or young people who are thinking about planning as a career?
That’s interesting because that was one of the questions I had for the advisers I interviewed. [They said] get into the business, get their credentials—as many as you can because it does seem as if minority planners have to have more credentials than non-minority planners to get the same type of attention. Then find mentors to help you navigate the business. Name recognition [of a big firm] might be good because business will come because of the name of the firm. A lot of planners have an entrepreneurial mindset and want to start out doing it themselves, and there’s nothing wrong with starting out independent, but if you’re starving, then you can’t stay in the business.
Make sure that your level of knowledge is where it should be to keep you competitive, finding people to give you guidance in the industry and maybe even specializing. Don’t try to be a jack of all trades. Maybe you are an insurance person, maybe you are an investment person, maybe you have a good network where you’re helping coordinate estate planning, maybe your niche is divorce. It could be that finding a niche is the way to go so that you’re not competing with everybody—you’re only competing with a smaller group of people who specialize in what you do.
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