Building Trust from the Inside Out

The U.S. population is 13.4% African American; however, only 5% of financial advisors are African American. While Black employees at financial institutions represent 13% of all staff, Black representation among senior positions fell from 2.87 % to 2.62% during the years 2007 to 2018.

With a public that has grown weary of corporate America's lack of progress with diversity, equity, and inclusion, and new research pointing to Black Americans' lack of trust in financial service providers, the financial services industry needs a new plan starting from the inside out.

Financial services is essential to the economic growth of America. The services, products, and advice provided enable individuals and families to grow in financial knowledge, improve financial decision-making, and save and grow wealth. Lack of trust in financial services stemming from institutional bias is a primary contributor to the racial wealth gap in America.

The American College Center for Economic Empowerment and Equality conducted the Black Women, Trust, and the Financial Services Industry study in 2021, finding 60% of respondents expressed difficulty locating financial professionals or advisors they trust.Another study, conducted by Edelman in 2021, revealed that "the majority of Black Americans say they've experienced systemic bias and discrimination across all industry sub-sectors."

Financial institutions are awakening to the economic opportunity from building a relationship with Black America. JP Morgan has committed $30 billion to address racial inequality. Goldman Sachs has committed $10 billion to build trust with Black women. Citi and the Citi Foundation have already invested over $1 billion in their three-year plan to close the racial wealth gap.

Initiatives across the industry have launched with fervor focused on investing in Black communities, increasing access to financial education for Black Americans, and providing increased access to capital for Black entrepreneurs. Yet, solutions to address the lack of Black leadership within organizations are not as easy to find.

"Organizations need to look at their hierarchy from the bottom up," says Karim Hill, executive director for the Center for Economic Empowerment and Equality. "Building trust with Black America can only succeed if you are also committed to building trust with Black professionals within your organization."

In Spring 2022, the Center for Economic Empowerment and Equality will launch the first Black Executive Leadership Program, an innovative approach to executive education designed to open dialogue, identify gaps, and remove the obstacles to advancement for Black professionals within financial services organizations.

The Black Executive Leadership Program is about building trust between Black mid-level managers, the program's fellows, and white senior-level executives, serving as the program's sponsors. Black business leaders facilitate the program, and because they have lived similar experiences to the fellows, they can help guide discussions about racial bias.

Building trust requires three components; competence, sincere interest in the issues and concerns of others, and consistency in effort, meaning you need to want to build a relationship. The Black Executive Leadership Program builds competence with a rigorous curriculum, incorporating advanced behavioral, interpersonal, leadership, and technical financial skills. The forum allows sponsors to impart their wisdom regarding networking and leadership. In return, fellows feel safe to share their experiences, challenges, and perspectives as Black professionals in their organization.

Fellows are selected for their demonstrated potential to lead at an executive level and sponsors, for their eagerness to be a bridge towards change. Through connection and candid conversation, a relationship is born. Through greater understanding and acknowledgment of the issues, agreed-upon action is initiated. The desired outcome is lifelong connections between fellows and sponsors, career advancement for fellows, and meaningful and lasting organizational change.

"Critical to the program's success is ensuring connections last, and the wisdom shared grows and expands long term," explained Martha Fulk, PhD, program director for the Center. "It's about creating a community. Fellows are equipped with the means and platform where they can continue to network and share their experiences with other fellows long after they have completed the program."

Since the Center announced the development of the Black Executive Leadership Program, interest from the industry has been very positive. Truist Financial Corporation donated $500,000 to the Center for Economic Empowerment and Equality, with the first cohort’s in-person events occurring in Charlotte, North Carolina.

"The Black Executive Leadership Program has the potential to advance multicultural success in the financial services industry by serving as a pipeline through which up and coming Black professionals can gain the insight and support they need to advance their careers," said Fulk.

The Black Executive Leadership Program is part of the Four Steps Forward initiative developed by the Center for Economic Empowerment and Equality to narrow the wealth gap for underserved communities, beginning with Black America. Through research, course development, programming, and scholarships, the Center seeks to infuse a perspective of "do well by doing good" in the financial services industry, nonprofit organizations, corporate America, and government agencies.

Learn how you can get involved in helping to narrow the racial wealth gap and create economic justice for all here.