New mission for African American advisor trade group

With the changing demographics in the United States, the financial advice industry may finally be reaching the realization it needs to hire more African American financial advisors, a severely underrepresented group in mainstream wealth management.

Christian Nwasike is determined to be a big part of that push.

Nwasike, 45, is chairman of the board of the Association of African American Financial Advisors and a former financial advisor, who started his career in the 2000s at the old Wachovia Securities, which merged with Wells Fargo Advisors in the financial crisis. Nwasike currently serves as principal and executive managing partner at a consulting firm, Practice Management Consultants.

The Association of African American Financial Advisors, a nonprofit also known as Quad AAAA, has been around since 2001, but it's making a concentrated effort to raise its profile as an advocate for African American financial advisors and clients, with the goal of increasing both the number of Black financial advisors in the industry and the number of African American families who have a financial plan.

At the association’s meetings as recently as five years ago, fewer than 100 people attended. The group expects 1,000 industry participants at its annual meeting in Washington, D.C., this September. Quad AAAA now has 1,400 dues-paying members who are licensed financial advisors.

InvestmentNews spoke with Nwasike in June at a meeting in New York focused on recruiting young and potential advisors, as well as practice management training for experienced advisors. About a dozen major firms, from Merrill Lynch to Edward Jones, attended and were sponsors.

InvestmentNews: Why has the organization chosen this moment to emphasize outreach to Black financial advisors, after years of being a bit quiet?

Christian Nwasike: We're a sleeping giant trying to awaken. We found out there were over 50,000 Black African American financial advisors, and the goal eventually is to double that.

To reach them, we realized we needed help. So we brought in partners like a new public relations firm to come on board and listen. This was in the fall of 2022. Now, we’re able to publicly talk about the work we do, to attract new talent, new financial advisors into the industry, and then work on ways to retain that talent.

IN: You said the murder of George Floyd was a catalyst in the organization’s thinking, correct?

CN: After the murder of George Floyd in 2020, a lightning bolt went off. We don’t know if he realized he was using a fake $20 bill in that store, and then the cops were called. If he were from a majority ethnic demographic, I feel pretty confident what happened that day would not have occurred.

It is incumbent on us to support families with commonsense financial planning and try to avoid the simple mistakes from happening, like they do, with the murder of George Floyd.

IN: What’s an example of the group’s recent advocacy work in the industry?

CN: We met with the Securities and Exchange Commission at the start of the year and had an opportunity for some of our financial advisors to say to the commission that examinations were complex or complicated, and they didn’t understand the legalese of the paperwork.

Our members are really passionate about the work they do, and because of the certain demographic of clients they work with, many of them don’t have the legal teams and resources to farm out this kind of work. They’re one-man shops. We’re trying to make this information simple and actionable for our members.

IN: What’s the core of the organization’s work?

CN: There are 11.7 million African American households, and we believe every Black family deserves a financial plan that can serve as a road map for successful financial futures. Take Jackson, Mississippi, where we had our winter meeting. There are over 280,000 Black African American households making an average annual income of $35,000 to $46,000 per year, with about $6,000 in savings.

Those families don’t fit the profile of clients for the wealth management industry, but a lot of our advisors are independent or registered investment advisors and can work with those households. We are taking our message directly to communities of color where they need the help the most.

IN: What is the cost per year for dues for your financial advisors?

CN: It’s $375 per year.

IN: Do the advisors get leads for new clients from the organization?

CN: Going back to 2018, we have records of almost 20,000 unique IP address users looking for a financial advisor. They are high-net-worth, mass affluent and low-income clients and households.

We can send an advisor on average two leads per month. We’ve heard back from 10% that these leads have helped transform their practices.

IN: Some of the sponsors connected to your association and here at the meeting have been sued by their Black financial advisors and then settled with them for millions of dollars over alleged racial discrimination practices, such as disparities in compensation and holding people back in promotion. How do you deal with that history of discrimination in the financial advice industry in the here and now?

CN: There’s about $6 trillion in Black African American family wealth as of 2021, according to BlackRock, and we’ve shown that data to our partner firms in the wealth management industry. And while we talk about that, we also talk about how they treat Black African American financial advisors. That means the policies the firms create and how they at times can be limiting. No one organization is perfect, but they want to do better.