Wealth is Growing Fast in the Black Community- Merrill Lynch
Wealth creation is now happening at a faster rate in Black and Latino communities than the general population, new research from Merrill Lynch shows.
U.S. households earning more than $125,000—which Merrill defines as affluent—have grown by 53% since 2015, according to the three Merrill reports, which were released Wednesday. But affluent Black or African American households have grown by 65% in that time. Latino and Hispanic affluent households are the fastest growing group, with an 81% growth rate since 2015, according to the Merrill studies, which were performed by research firm Ipsos.
Many of the affluent Black/African Americans we spoke
to described feeling frustrated by media portrayals
perpetuating clichés about Black/African American
wealth. We heard that the diversity and breadth of
Black/African American wealth is often overlooked.
Some of the individuals we spoke to described this as
a narrative desert – a dearth of everyday stories about
Black/African American wealth. As a result, there is
a strong commitment on behalf of the Black African/
American community to tell different stories in hopes
that individuals within and outside of the community
can appreciate the full range of diverse wealth.
“We need to be very connected to growing segments in the marketplace,” says Andy Sieg, head of Merrill Lynch Wealth Management, Bank of America’s full-service brokerage, in an interview. “It’s not just a moral imperative, but a commercial imperative.”
Some advisors may not realize that the makeup of potential wealth management clients in 2021 is quite different than in previous decades, Sieg says. This research, which will be used in Merrill training programs as well as in client and prospect outreach, should help change that, he adds.
“Stereotypes die hard,” says Sieg. “We’d like for this research to be an eye-opener in terms of how strong the growth trends are.”
The research finds that each of the three communities studied tends to have its own set of priorities, which differs in meaningful ways from the general population.
“The complexion of wealth is changing, and it’s changing at a very fast pace,” says Jen Auerbach-Rodriguez, Merrill’s head of strategic growth markets, who led the research project, which combines academic research, surveys, and interviews in people’s homes.
For example, Black and African American affluent households showed a strong desire to give back to their communities. They often reported that they felt they had to work harder than others in order to get ahead and wanted to set up future generations to succeed, notes Auerbach-Rodriguez. She also says they tend to favor investing in businesses and real estate in addition to traditional investments.
Latino and Hispanic families said hard work, education, supporting their family, and making their family proud were top priorities. They were 35% more likely than the general population to list providing for family as top personal motivator, says Auerbach-Rodriguez. READ MORE
