People of color are drastically underrepresented when it comes to financial advising, both in advising and receiving these services. That means less access to the resources and systems that can make financial stability and generational wealth real.
Diversity in financial advising has historically been challenging. But it doesn’t need to be.
At the CUNA Mutual Group Multicultural Center of Expertise, in partnership with our Center for Advisor Excellence, we conducted research on financial advising and credit union members.
We learned that credit unions have the power to make a meaningful impact on how diverse populations build toward financial security.
Did you know that multicultural consumers are more interested in receiving financial advising services at a credit union? This means credit unions are in a unique position to reach the multicultural consumers of the future, and to break down barriers in the industry.
Here’s more detail about what we learned through our research:
• When multicultural consumers reach out to a financial adviser, they are more likely to do so through a credit union. They also consider the experience and recommendation of their credit union more important in deciding which financial advisors to use.
Additionally, they express more interest in joining a credit union than white consumers. In fact, 61% of all new credit union membership growth now comes from multicultural consumers.
• Multicultural consumers are, on average, almost 10 years younger than white consumers when they first reach out to a financial adviser.
Don’t miss the window for multicultural consumers. Waiting until the average age of consumers of the past to reach out to multicultural consumers is too late.
• Affluent Hispanic and African American consumers want their good fortune to improve the lives of others. Highlight investment opportunities that help these groups achieve their goals of community improvement and social responsibility.
• Many affluent bicultural Hispanic consumers think they don’t have enough money to invest. Make sure these consumers understand there are low-dollar entry points for investing and the opportunity cost of not investing.
• Affluent Hispanics and Asians prefer to work with fewer financial service providers. Focus on relationship-building and cross-sell opportunities when working with these consumers.
• Affluent bicultural Hispanic and African Americans see property and businesses as tangible signs of wealth. Highlight opportunities for investing in businesses and properties.
• Hispanics view personal finance as a family endeavor. Fifty-two percent of Hispanics stated they are financially tied to their families compared to 33% for non-Hispanics.
Multicultural consumers look to credit unions for financial advice and guidance. To be successful, credit unions need to invest in advisers who understand the experience and specific barriers multicultural consumers face as they work to achieve their financial goals.
Consumers want advisers they can relate to—advisers of their ethnicity who can relate to their values, motivations, and struggles. Investing in that wealth of experience is necessary to reach, support, and retain this market in the future.
Credit unions are privileged to be in a position to serve more multicultural consumers and to break down barriers in the industry. Don’t let that opportunity pass you by.
OPAL TOMASHEVSKA is director of multicultural strategy at CUNA Mutual Group.