Written By: Stephanie Yates, PhD, AFC®, CFP®

In this session, a panel of presenters discussed issues facing financial counselors and coaches related to the racial wealth gap and what we can do to address it. The panel included:

  • MC Dyalekt, Pockets Change
  • Saundra Davis, Sage Financial Solutions
  • Yolanda Jackson, Force of Life Fayetteville
  • Darren Liddell, The Financial Clinic

The panel was led by Dedrick Asante-Muhammad, National Community Reinvestment Coalition. The session began with a discussion of the narratives that shape how we think about the racial divide. These narratives imply that the racial divide is a result of mis-steps that people of color have taken with their finances and in other aspects of their lives. Instead, many people of color find that segregation, disenfranchised communities and the tax system are at the root of their financial problems. Mr. Asante-Muhammad then quantified the racial wealth gap and showed statistics that also provided evidence that even after controlling for education, significant wealth disparity exists.

As the discussion expanded to allow the panel to weigh in on this information, several themes emerged. First, panelists offered that while it is important to understand the underpinnings of the racial wealth divide, it is also important not to blame individuals for where they are financially. Therefore, as a best practice, we must combine financial knowledge with cultural sensitivity. In fact, Mr. Asante-Muhammad explained that sometimes, people of color have to take a pay cut in order to move forward. That is, it may make sense for a client to accept a lower paying job in order to live in a safer neighborhood or secure better benefits. Yolanda Jackson advised that “As practitioners, we must come from a place of understanding and recognize that things do beat people down and then provide resources to help them take first steps to recover from the negative experience.” Darren Liddell chimed in that we should ask clients “What are your financial values, where do you want to be, and what do you need to get there?” This sentiment led to a second theme. As practitioners, we can’t make assumptions about our clients and must therefore allow them to be the experts on their own lives. We truly do not know someone else’s financial reality until they tell us. Saundra Davis suggests that we ask clients “When we’re successful, what will we have set up for your family and the people who matter most to you?” Finally, the panelists agreed that the way forward is through education. Dyalekt explained that we can “Create common understanding about money — about economic inclusion — not just sharing money we have but also education. Once we get ourselves right, we can also listen, share, and make change.” Much of that education can come about simply through education. Darren Liddell challenged the group by asking “Think about the last time you talked about the racial wealth divide. Challenge yourself to do so. Increase the conversation.” Yolanda Jackson added to this directive by commenting “Get comfortable talking about money. Educate yourself so you can educate your community.”

In essence, the panelists described the real differences in income and wealth across the races and suggested that practitioners must be aware of these differences in order to be effective in working with clients of color. However, practitioners must be careful not to make assumptions simply based on color. We must create safe spaces where clients can tell their story, listen without judging or making assumptions, and then educate so that we can help clients reach their goals. So much of the issue is about understanding. Saundra Davis reminded the group that “We will not coach people out of the racial wealth divide. We can help them cope with situations they face every day.”

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