Building wealth is one instrumental part of financial planning, whether to accumulate savings or grow an investment account to move closer to a specific goal or lifestyle. Wealth creation is the steady build-up of income and assets over a period of time — but historically, the Black community has faced systemic barriers to building wealth.
In this compelling session as part of Ally Invest’s Digital Conference in June 2020, Lule Demmissie, president of Ally Invest at the time, and Anna N’Jie-Konte, founder of Dare to Dream Financial Planning, address some of the current inequalities in investing specifically and how investing can be more purposely employed to help close the wealth gap.
Let’s Talk: Wealth Creation in Black Communities
Over the years, systemic roadblocks have kept Black communities from wealth creation. For generations, Jim Crow laws, which enforced racial segregation from the late 19th century (after the Civil War) until 1965, were designed to suppress the financial prosperity of the Black community. From the 1874 Freedman’s Savings Bank collapse to the Tulsa Massacre in 1921 and redlining (made illegal in 1968), Black wealth continues to face monumental odds that have built-up over time due to historically discriminatory policies.
Today, this history hinders the Black community’s ability to build wealth, and certain policy changes of the ’80s and ’90s have exacerbated the gap. But with fair access to wealth creation opportunities, we can empower generations to build wealth.
Let’s Act: Empowering Wealth Creation in Black Communities
“Closing the wealth gap will require meaningful policy changes and more — but financial education, reducing the access barriers to investing, and inviting Black stories into the investing narrative can play an important part,” says Lule. “Investing will not close the wealth gap on its own, but participation in investing can be a part of that solution. We are keenly focused on removing the jargon from the market conversation.”
The fact remains that Black professionals are underrepresented in financial companies and services. Having Black representation in the company ranks of Fintech and traditional financial institutions can positively impact single generational wealth, as well as better shape services and products. Not to mention closing the wealth gap is good for everyone: It is estimated that addressing the wealth gap could boost the economy between $1 and $1.5 trillion by 2028.
At Ally, we’re committed to doing our part to help close the wealth gap and build a business that’s inclusive and welcoming to all. We’re focusing our efforts on building a diverse leadership team and broadening representation throughout the company, while also looking for ways to drop barriers to entry and engagement by meeting people where they are, which will help make investing and building wealth easier and less intimidating.
There’s a lot more work to do, and we firmly believe in putting in the effort.