Affluent Blacks — defined as those with annual household incomes of $250,000 or more or $1 million in investable assets — are slightly more likely than affluent non-Blacks (33% vs. 30%) to say their financial status in 2010 is worse than it was in 2008, according to Northern Trust. By comparison, affluent non-Blacks are slightly more likely than affluent Blacks (38% vs. 37%) to say their financial situation is better than in 2008. Six in 10 wealthy Blacks (60%) believe the recession has taken a worse toll on Black Americans than other Americans.
Affluent Blacks are more likely than non-Blacks to have investments in private businesses (35% vs. 24%) and commodities (21% vs. 18%). Affluent non-Blacks are more likely than Blacks to have cash holdings (71% vs. 61%), large domestic equities companies (53% vs. 41%), and municipal bonds (42% vs. 31%). Nearly four in 10 affluent Blacks (38%) plan to increase their cash holdings, compared to 22% of non-Blacks. Some 12% plan to increase their cash holdings by more than 25%.
Half of affluent Blacks (50%) seek investment information from a financial advisor. Other sources of information include:
• Financial websites (40%);
• Newspapers and magazines (38%);
• Company annual reports (33%);
• Equity analyst reports (33%);
• Friends and relatives (30%);
• Investment newsletters (28%);
• Television and radio (18%); and
• Other advisors (26%).
Affluent Blacks choose their financial advisors based on factors such as a trusting relationship (79%), understanding their needs and goals (78%), understanding the level of risk they’re willing to take in investments, and clear explanations of their analysis (75%). Only 36% choose a financial advisor based on his or her ability to relate to their racial/ethnic background.
Nearly for in 10 (37%) make most investment decisions themselves but regularly consult an advisor, whereas 16% only consult their advisors on special situations, and 16% make all their investment decisions without the help of an advisor. On the other hand, 31% say their advisor is their primary financial decision maker.
Source: “Wealth In Black America,” Northern Trust, Mark David Welch, SVP, 50 S. LaSalle St., Chicago, IL 60675; 312-630-6000; www.northerntrust.com. Price: Call for information.
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