Kimberly Stewart: Improving Financial Literacy in the Black Community

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Hello and welcome to Barron's The Way Forward. I'm Greg Bartalis, and my guest today is Kimberly Stewart, a financial advisor and president of the Black Empowerment Advisory Community Network at Ameriprise. Today we're going to discuss a number of things, but focus on the efforts she's undertaking to improve financial literacy in the Black community. Welcome, Kimberly.

Hi, Greg. Thank you so much for having me.

Oh, my pleasure. Um, We have a lot to talk about, an incredibly important topic. I'll let you take the ball and just kind of begin with where you want to take it and then we'll jump in.

Great. Great. I've been in financial services now for 30 years. Started my career at Schwab, you know, got all my industry licenses there. I went on to State Farm, Edward Jones, and I formed my own practice 13 years ago. I am fortunate that early in my career I found my passion and my purpose. And my passion and my purpose was simply this. Oftentimes people that look like me don't get what I know. And so it's important for me to be able to share and help my community understand financial literacy a little bit more and make sure that I'm continually educating the Black community. For me, it is important that if I've done my life correctly, financial literacy is no longer a foreign language. And so that's why I do what I do. That's why I practice. I have a practice in Orlando. I often joke that I'm going to spread financial literacy like pixie dust because I know the magic that can be created if we understand financial products, services, and the difference it can make in one's life. So that's what I've been created to do. I know that's my purpose and that's my passion.

I know it's incredibly important as well, but tell the listeners exactly why. I mean, bring in any numbers if you want, or just to really underscore the size and importance of the issue.

So financial literacy in the Black community is a huge challenge, and the reason it's been a challenge, there's the root cause. It can be boiled down to 3 things: information, access, and resources. Typically, we haven't had access to the information and/or the products and services to help us manage our financial resources better. So we tend to make financial decisions that aren't on par with sound financial practice. And so for me, it's important to be the deliverer of that information. I know for sure that we make decisions about money every day, all throughout the day. We can make those decisions based on ignorance, or we can make them based on knowledge. And my goal is to help the community make those decisions based on knowledge so that we that we can create generational wealth, that we can provide better lives for our families, that we can do things that, that impact us in a, in a very positive way. When you look at the net worth of a Black family, typically it is 10 times less than that of a white family. And the huge reason for that is we lack the tools and the resources to make good financial decisions.

Okay. And tell me about at Beacon, the financial literacy program. Tell me what you're doing, how you're implementing it, being received, etc.?

So we started Beacon. You know, there were several events that happened in the summer of 2020. And I, along with several advisors, reached out to the executive leadership team at Ameriprise because we felt that there was— we had to do something. We were in a very dark period and we felt like we had to provide some hope and some guidance. So to be quite frank with you, that's where the name came from. We wanted to be a beacon of light, a beacon of hope in our community. And so we came together, the Forum Beacon. You know, we wanted to create a culture a cultural shift in the industry, something that was for us and made by us. And so one of the major principles of Beacon is financial literacy. We know that we are the deliverers of this information. And so we created this curriculum to help address the needs of our community. There are 7 modules of this curriculum, excuse me, Earn, Save, Spend, Credit, Debit and Banking, investments, retirement planning, estate planning, tax planning, and life insurance. And the goal of that curriculum, or the two goals of that curriculum, are these, Greg. One, we want to meet people where they are from a financial literacy level, but two, we also want to meet them where they are financially.

And tell me about, with the seven items you just mentioned, are there any in particular that resonate or you get more immediate receptivity to, or Just, can you add a little color to that?

Certainly. I think they all resonate because the goals are twofold, as I just mentioned, to meet you where you are financially, but also to meet you where you are from a financial literacy level. And so if you're just starting out, say you just, you know, got your first job and earning a few dollars and you're really trying to put yourself in a position to be well financially, well then Earn, Save, Spend, because that talks about budgeting and cash flow and things of that nature. And then Credit, Debit and Banking, managing your credit scores. We know how important credit scores is. One of the One of the things I say to people all the time, cash might be king, but credit is queen. And so being able to manage that effectively at a young age is important. And then, you know, maybe as you progress through your stage of life, you're, you know, starting a family and things of that nature, then the investment and life insurance modules are certainly may resonate with you at that time of your life and at that stage of your life. And then certainly as you get in your higher earning years and you're accumulating and you're looking towards your golden years, you're trying to, you know, plot a course for retirement, then investments, You know, tax planning, retirement planning, estate planning, all of those things will be important. And so the goal is to meet you where you are. And so for depending on your stage of life and your level of literacy, one of those modules certainly can help you achieve your financial goals.

And tell me about the actual process of meeting someone where they are. Is it just kind of a deep dive conversation where you're just trying to suss out their level of knowledge and awareness of all that. And once you're confident in your assessment and you're like, okay, this is kind of where you are, let's talk to you, not at you or from above, right? Keeping it on an equal level.

Great point. One of the things that I try to employ whenever I meet with a client or a prospect is tell me your story about money. And more importantly than telling me your story, tell me your history with money. Because certainly in my community, we often haven't had wealth. We often, often haven't had resources. And so many of us are new to money when we get it. And that tends to cause, you know, some instances, some issues when we make financial decisions. Professional athletes are a perfect example. Many of them, you know, end up in a financial deficit after their career is over because they haven't obtained the knowledge to help make sound financial decisions. And so for me, it's meeting the client or the prospect where you are. Let me know what your history is with money. Let me know your story with money. How do you use money?

I think that's a really Great, smart approach because a lot of times, well, everyone has a story with money, right? Like everyone does. And unwittingly or wittingly, when they share that story, they will reveal more than they suspect. And you will go, aha, little detail there. Ah, I see that. Or I see a pattern. Hmm. You know, or what happened here? The arc changed suddenly and they're not even aware of it. So I think that's a really interesting approach because so often if you just are linear and use data points. It's kind of like a hodgepodge of facts and you're like, hmm, what ties this all together?

For those of us not in the industry, money is more emotional than it is technical. And so if you can understand the whys, why people interact and how they use money, then you can help them get to a better place. And so oftentimes I tell people, you know, people ask me, well, Kimberly, what do you do? Yes, I'm a financial advisor, but sometimes I think I'm a financial therapist. Because it's understanding how you feel about money, it dictates how you use money.

Well, and money is such an inherently, intrinsically charged thing, right? I mean, what is money? And like, you know, I kind of see it as coin to freedom, if you will, right? If you have enough of this stuff, you can sleep in till 3 PM every day. You're kind of like, hey, you could travel to Aruba, do whatever the heck you want. You know, of course it can be misused as a means to an end. Of course it can represent power and all that. But in a way it does represent freedom and options and the ability, in its best sense, to fulfill whatever dreams or ambitions you and your family or loved ones may have.

You're absolutely right. You know, I often kind of cringe when I hear people say money doesn't buy you happiness. What money does get you is freedom and choices. And certainly if you know how to use it correctly and leverage it correctly and manage it correctly, you can certainly have some level of happiness.

Yeah. And I think, right, it I don't know if it was Mae West or someone, she said famously, like, "Oh, I've been rich and I've been poor, and believe me, it's better to be rich." Something like that. I'm totally butchering that. But it is interesting that I think some people when they're younger, they often are unaware of how much money is coveted and fought over. As you get older, you see that. I see it in some ways almost like it's a tug of war. Like everyone needs X amount, and often, generally, people want more, right? Directionally. But people are— alone facing vast corporations that are— some are worth over a trillion dollars. They have the best lawyers, the best technology, the best of whatever money can buy, and they're trying to extract those dollars from your wallet, right? And it behooves you, it's incumbent upon you to arm yourself with knowledge and awareness because you only have yourself, right? But you don't have to be a genius. You don't need to be rocket science. You don't need to get a fancy degree. There's a lot you can do alone and with an advisor.

Exactly, exactly. I tell people that all the time. You don't need any of my licenses or any of my degrees to be successful financially. You know, one of the things that I like to say, if you read the front page of the Wall Street Journal, you don't even have to open up the entire newspaper, read the front page of it, you'll know more than most Americans. And so, you know, we have these little tiny things that we carry around all day, our cell phones. They're There's so much knowledge and information there that you can attain. You don't have to be a financial advisor to be well, to do well financially, because there's so much we have at our disposal at this point. So I agree wholeheartedly.

Yeah, I mean, I guess there are two tricky things. So in theory, right, on paper, it's kind of easy. Let's buy S&P 500 index fund, let it compound for 20, 30 years, touch it, leave it. Okay, that's true on paper. But in reality, real life often intervenes. There's, you know, healthcare calamity, whatever life will throw a curveball at you. It invariably will. You have that. And the other thing that I think is important, you know, is the behavioral dimension. I mean, that is almost eternal regardless of anyone's net worth. People get greedy at the top, they panic at the bottom. And that's also, I think, particularly where an advisor's value may manifest itself because you're providing that reassurance and the guardrails to say, hang in there, right? You know, like, stick with it, keep your eye on the prize, right?

It's funny, when the market is going down, I have, you know, clients that will call me and say, hey, and they already know what I'm going to say, which is, hang in there, we got to get through this. And sometimes they'll say to me, I just needed to hear you say that again.

Wow.

All right, I'm okay with that, Kimberly. We don't have to do anything because early— I'm fortunate and blessed enough that I've had clients that have been with me for years. And so early on when we went through the Great Recession, 2007, 2008, 2009, 2009. You know, this— there's this old analogy out. I told a bunch of clients, this is the time you're going to want to throw a brick through my window. I just need you to put a check attached to that brick because this is the time where we're going to see the results. This is the time where money is made. So it's oftentimes people just want to hear us say it's going to be okay.

So tell me what else, what's, what's happening, what's new, what any new emerging trends or things you're seeing.

Definitely. And so one of the things that, you know, we focus on at Beacon, we focus on several things. And so financial literacy, of course, is a huge component of why we came together and created this organization. And we wanted to make sure that we equip the Black community with the resources and the tools to be successful. You know, one of the things that is a major component as to why the wealth gap continues to widen is homeownership. Black people tend to lack lack the ability or lack homeownership. And so it was important for us to make sure that we educated our community because homeownership is a huge driver with net worth. It's a huge driver with creating generational wealth. And that's one of the things we want to focus on. We want to leave the world better than what we found it because, you know, it's hard to understand the importance and value of homeownership if you don't understand the importance and value of savings and credit. Because both of those are prerequisites to owning a home. And so we wanted to make sure that we gave the community the resources to make sure that they could make sound financial decisions and we could leave, you know, create a lasting impact. The other thing with the Black community that we wanted to focus on, certainly, whereas the financial literacy modules are considered, is life insurance, because we understand the importance of generational wealth. And having life insurance is one of the ways to pass down wealth and create a legacy. And so that's why the financial literacy module or the piece of our organization is so important because we want to educate our community to make sure that we can create a lasting impact. Think about it. Ameriprise has 10,000 advisors. Who better than us to do it? That's a sales force that is unmatched. And if we do this well and we do it even half well, Greg, we change the face of the industry and we change the face of the Black community for years to come. Talk about leaving a legacy. This outlives all of us. If we do it well. Another part of Beacon that we certainly wanted to focus on was an advisor community. I've been in financial services for 30 years. It is often a lonely place, especially when I go to conventions and conferences and things of that nature. Most of the time, I'm the only Black person there, and I've— many of my colleagues have had a very similar experience. So as a part of Beacon, we wanted to come together and create this cultural shift where we felt a sense of belonging. We felt a sense of we fostered each other, we, you know, helped each other grow and things of that nature. So I am very proud that in 2022, we, we completed something. We made history at Ameriprise. We held the first ever annual Black Advisor Summit in 125 years of Ameriprise existence. That had never been done. And so we came together in Washington, D.C. in 2022 and created this We created this force, and it was so great to see it. We had advisors from all over the country. We had our corporate partners there. We had an agenda that was jam-packed with great keynote speakers. We had informative sessions that allowed advisors to get information and knowledge to take back to their practices because we want advisors in the— we want, first of all, we want to retain the advisors that are currently in the industry, but we also want to be a beacon of hope to bring more Black advisors into the industry. You can't be You don't see. And so we've made it a point to make sure that we're intentional and we're visible and we're present in our communities because we want Black children to see that this is a viable career opportunity. Maya Angelou has this quote that says, surviving is important, thriving is elegant. We want Black advisors to thrive and we want them to grow. And so that's why Beacon was created.

The summit was last year in— this year in Chicago, right?

Yes. Yeah. Yes.

Tell me about that.

It was great too. So we were able to build off of the momentum from the first year. We increased the number of advisors that were there and we added something very special on the second summit. We had breakout sessions. So we had sessions where advisors were really able to hone in on the topics that were relevant to their practices and relevant to how they wanted to conduct and move forward with their businesses. So we talk about going forward, going forward. We certainly want to continue that trend, the energy in the room. This year was amazing. It was palpable. You could cut it with a knife. And so we want to continue that momentum. There is a thirst for what we're delivering. And what we're seeing is that advisors recognize the value and the importance of the network. And so we want to continue moving forward with that.

Is it fair to say that there'll be another one on tap next year? And if so, have you picked a location yet or that's to be determined?

Greg, I wouldn't have it any other way. So we've already picked the dates and the location for the next summit. It will actually be held in Minneapolis. Minneapolis, Ameriprise's headquarters. And so we're expecting, you know, phenomenal growth. Our goal is 100 Black advisors at the summit. And so we're pushing towards getting that, getting that number and getting, achieving that, that goal.

Well, thank you so much for joining me. I greatly appreciate it.

Thank you. Great conversation. Thank you for having me.

Thank you. My pleasure. Thank you. My guest was Kimberly Stewart. For more advisor-specific podcasts, please check out Barrons.com.

Podcast.

For The Way Forward, I'm Greg Bartalis.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.