How to find a BIPOC Financial Advisor or Planner

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The relationship between a client and a financial advisor should be based on trust. Clients need to feel that their advisor intimately understands their perspective, goals, challenges and overall financial situation. And starting with shared cultural experiences can help build that trust.

Black, Indigenous, and People of Color, or BIPOC, may find it easier to speak openly with a financial advisor who shares some heritage, as they may have faced the same unconscious or conscious bias in the financial industry. This could include the inability to access traditional debt options for small business owners, a lack of financial education, or financial responsibilities to families located in other parts of the world. Fortunately, it may be a little easier today than in decades past to find a BIPOC financial advisor, but the gap is far from closed.

Key points to remember

  • Finding a financial advisor or planner from your own ethnic background is easier these days.
  • While the majority of Certified Financial Planners (CFPs) are white, virtually all ethnic groups are represented in the profession.
  • There are organizations that represent VTCs from different ethnic groups.

While 83%, or nearly 77,000, of certified financial planners identify as white in the latest professional count from the Certified Professional Planner Standards Council, about 4%, or some 3,700, are of Asian descent or Pacific Islander; 2.7%, or 2,525, are of Hispanic or Latino descent; more than 1,656, or almost 2%, are black; and 0.2%, or 201, are American Indian or Alaska Native.

By comparison, the US population is about 76% white, 18.5% Hispanic or Latino, 13% black and 6% Asian, according to US Census Bureau data.

What credentials should a financial planner have?

A qualified financial planner can have three titles, but the first is the most important. He is a Certified Financial Planner (CFP). A CFP is a formal recognition of expertise in the areas of financial planning, taxes, insurance, estate planning, and retirement (as with 401(k)s). Owned and awarded by the Certified Financial Planner Board of Standards, Inc., the designation is awarded to individuals who pass the initial CFP Board examinations and then pursue ongoing annual training programs to maintain their skills and certification.

A better prepared financial advisor holds the Chartered Financial Analyst (CFA) designation. A CFA is a globally recognized professional designation given by the CFA Institute (formerly AIMR – Association for Investment Management and Research) which measures and certifies the competence and integrity of financial analysts. Candidates must pass three levels of exams covering areas such as accounting, economics, ethics, money management and security analysis.

If you have a situation that specifically deals with taxes and accounting, you may want an advisor who is also a Certified Public Accountant (CPA). A CPA is a designation given to professional chartered accountants. The CPA license is provided by the Board of Accountancy in each state. The American Institute of Certified Public Accountants (AICPA) provides resources on obtaining the license. The CPA designation helps enforce professional standards in the accounting industry. Other countries have equivalent certifications to the CPA designation, including the Chartered Accountant (CA) designation.

Tips to refine your search

As with any search for a financial advisor, start by verifying credentials. The National Association of Personal Financial Advisors (NAPFA) offers a checklist on how to evaluate any financial advisor:

  • Discuss with your loved ones what you want to accomplish by working with an advisor.
  • Create a list of advisors, compiled through word of mouth advice, professional organizations or lists.
  • Do your homework on your candidates and find a top three by reviewing websites and checking for disciplinary action. The shortcuts to do this are through the Financial Industry Regulatory Authority (FINRA) BrokerCheck and the CFP site, both of which help assess brokers.
  • Design a list of questions to ask candidates, starting by asking them about their approach.
  • Meet them in person, if possible, or by videoconference.
  • Make sure you trust their experience and credentials and are comfortable speaking with them.

To find a black financial advisor, you can visit the Association of African American Financial Advisors’ Find a Financial Advisor tool. You will need to enter your contact information, including a zip code, email, and phone number. In addition, you should think about what you need the help of an advisor for: comprehensive financial planning, insurance, estate planning, taxes, etc. If no black councilor is physically in your area, there is a virtual council option.

Or the XY Planning Network’s “Find an Advisor” feature can help you find a financial advisor by specialty, as well as ethnicity, language, and gender/identity.

You can also contact professional organizations such as the Native American Financial Services Association, ALPFA (Association of Latino Professionals for America) or the Association of Asian American Investment Managers (AAAIM).

What percentage of financial advisors are black?

Almost 2% of certified financial planners are blackaccording to the Certified Professional Planners Board of Standards, making them the smallest percentage of non-white planners available.

What is a Certified Public Accountant (CPA)?

A CPA is a designation given to professional chartered accountants. The CPA license is provided by the Board of Accountancy in each state. The American Institute of Certified Public Accountants (AICPA) provides resources on obtaining the license. The CPA designation helps enforce professional standards in the accounting industry. Other countries have equivalent certifications to the CPA designation, including the Chartered Accountant (CA) designation.

How can I find free financial advice?

In many major cities, you can now get one-on-one professional financial coaching for free through organizations such as the NYC Financial Empowerment Centers. Their advisors aren’t necessarily CFPs, but they can help with budgeting, debt management, creditor relations, accessing emergency resources, banking aids, and navigating taxes.

The essential

Having a financial advisor or planner who shares your culture can add a level of comfort to working out your current and future finances. However, it is important to do your due diligence first and assess their qualifications and experience before starting your working relationship.

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