Changing trajectories: how financial planning puts Black folks on track


By Bria Overs,
Word in Black

It’s hard to know where to turn when seeking guidance on budgets, investments, purchasing a home, or even starting a business. The internet is a great and vast resource, but it has one major flaw — it’s unable to get a complete view of your finances.

Passing down financial knowledge is common in the Black community, yet there’s a potential danger in sharing incorrect financial advice that could put someone on the wrong path.

Certified financial professionals have the education, training, guidelines, and standards needed to give reasonable financial advice on various financial topics.

“When we think about that educational component, being able to instill the knowledge, tools, and habits that may not have come from prior generations allows us to change the trajectory of where we’re going,” says Gerald Grant III, a certified financial professional (CFP) at G Financial Group in alliance with Equitable Advisors.

With this in mind, the apparent differences between professionals, financial influencers, or “influencers,” and financial coaches become clearer. And it’s an important distinction: Influencers and coaches are not required to have credentials or the subsequent knowledge that comes with it.

“The reason there are licenses and regulations to get into this industry, as well as certain tests and designations, is because you’re governed ,” Grant says. “And there are rules you must follow when you’re on this side of the playing field.”

The consequences are severe if they don’t follow the rules and laws. 

Proper financial advice is vital for increasing financial literacy, boosting generational wealth, and being more prepared for retirement.

CFPs, CPAs, and CFAs — what are they?

Certified Financial Planners (CFP), on the other hand, can get a “holistic” view and are meant to “bring all the pieces of your financial life together,” according to the CFP Board, which upholds the standards for planners. 

Certified Public Accountants (CPA) can help individuals or business owners with all things related to taxes. Chartered Financial Analysts (CFA) are advanced investing and wealth management experts.

“Normally, people look for a CPA when they want tax advice or if they want something, like their nonprofit, audited,” she says. 

Davis notes that CPAs are an excellent option for small business owners looking for assistance with accounting and taxes. Clients could be partnerships, sole proprietorships, C and S corporations, estates, and trusts.

It’s possible to find a professional with all of these designations, but deciding who to work with depends on your individual financial needs.

A cost-effective alternative: financial coaching

Relying on financial influencers and financial coaches is tricky because many don’t have the certifications and professional expertise that a CFP® has. However, CFP®s occasionally recommend them for folks who don’t meet the firm’s client requirements or can’t afford their services.

Coaches have limitations in what they can do and provide because of the regulations and licensing requirements. However, some Accredited Financial Counselors have a certification through the Association for Financial Counseling and Planning Education.

Davis says there are scammers on TikTok and Instagram who offer bad financial advice and encourage their audience to engage in illegal practices. 

Earlier this year, ABC News reported France became the first country to regulate influencer marketing, making it unlawful to create paid content promoting financial products, including cryptocurrencies.

Researching what “influencers” recommend before acting on it or speaking with a certified finance expert can combat taking lousy advice.

What to look for in a finance professional

Finding a financial planner or professional to work with is easy. According to the Bureau of Labor Statistics, the United States has about 327,600 personal financial advisors.

Their services often come at a price, and as such, many offer free consultations or introductory calls to see if your needs are a good fit for their services.

Grant and Davis recommend asking the potential financial planner or coach some of these questions when considering working with one.

  • Who is your typical client?
  • How and why did you get into this field?
  • What are your personal finances like?
  • What is your money story?
  • What is the mission and purpose of your firm or business?
  • What are things we’re not thinking about or doing that we should be?

Grant also has things he recommends looking out for.

  • Are they asking you questions about your household? 
  • Are they asking you questions about your particular financial landscape?
  • Are they recommending different strategies without proper information?
  • Is this somebody who will have my best interest in mind? Or are they telling my what I want to hear?
  • Are they going to educate me on the options available?

“I would say it’s like going to the doctor,” he says. “I can’t give you a full prescription if I don’t know your needs.”

There needs to be a process for your financial professional to get to know you, where your finances stand, and where you want to go.

This article was originally published by Word in Black. 

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