By Ashley Benkarski
NASHVILLE, TN — Merrill Lynch Wealth Management released the results of its recent study into the increasing number of affluent Black Americans and the ways in which they obtain and grow wealth.
The report, titled “Diverse Viewpoints: Understanding Affluence in the United States,” defines “affluent” as a household making $125,000 or more and found affluent Black households have grown by 65 percent since 2015 compared to 53 percent of the general population.
It’s common knowledge that Black Americans were locked out of generational wealth for centuries due to legal slavery and Jim Crow laws. When these practices became illegal other economic barriers rooted in racism such as redlining, the lack of access to quality education, good paying jobs and promotions, among others, filled the vacuum.
Cathy Bender, Vice President and Senior Financial Advisor at Merrill Lynch, explains the upward trend this way: “Recent events across America serve as a reminder of how far we’ve come, and just how far we have to go. Black Americans have a rich history of overcoming obstacles. We know that the Black community is more motivated and invested than other groups in supporting and creating legacy wealth for future generations of Black Americans. We’re excited to pass property to our children, to be able to financially support our family’s educational goals and career ambitions, and to provide our friends and community with the best opportunities for success.”
Examining the financial goals, motivations and challenges Black Americans
The data supports Bender’s claim on a local level too, as Black Americans in our community are twice as likely to be motivated by a desire for personal achievement and 25 percent more likely to be motivated by a desire to set future generations up for success.
“A lot has happened since we conducted this research in 2019 and the work is even more relevant and important as a result of events in 2020,” she continued. “There have been opportunities to increase net worth in the past year, thanks to investment growth and fewer opportunities to spend due to COVID-19 restrictions.”
Bender’s background in psychology provides a lot of insight to the data but it also helps guide her in navigating the relationships she builds with her clients.
Having trust and understanding with a financial advisor is critical, especially at a time when the majority of Americans are walking on eggshells when it comes to financial stability.
“For many Black Americans, the barriers to success in the corporate world have pushed us towards becoming entrepreneurs,” Bender said. The survey found that Black Americans were four times as likely to plan to start their own business compared to the general affluent population.
“In my role as wealth management advisor, I’m constantly looking for ways to understand the financial priorities and needs of the people I serve.”
“By supporting Black-owned small businesses, we can continue to narrow the gap, create financial independence and capacity for our Black communities and foster general wealth building.”
According to census data currently available, women account for just over half of the state’s workforce. Affluent Black women are four times more likely to have invested in a business they run and are often motivated by necessity, the survey found.
“Black women that are faced with job relocations, facing a long commute, or spending too much time at work and away from children are now going out on their own, creating small businesses, and turning their former employers into clients,” Bender continued.
She also noted that financial goals of the affluent Black community reflect the need to overcome barriers to building wealth, but many goals aren’t purely financial. Rather, the goals are “connected to combatting ongoing societal injustices and imbalances.”
“As our nation becomes more educated and understanding around the historic inequality and systemic racism in our country, we begin to positively shape our communities as a whole. Month-long celebrations like National Black Business Month encourage communities to get invested and financially support Black-owned businesses across our country,” Bender said.
“Prioritizing generational wealth provides families in the Black community the means to invest in their children, buy a house, start a business, relocate for new and better opportunities, and have greater participation in the democratic process,” she said. “For individuals in the affluent Black community, our legacy includes reaching back as we move forward.”