On The Money

By Cliff Hocker

According to the 2005 African American Active Investor Study, a larger proportion of well-off black investors are young, female, and single, compared with other prosperous Americans.

The survey reports that affluent African Americans are 58% more likely to be women, 28% more likely to be single or never married, and almost two times more likely to have $100,000 in investable assets between the ages of 30 and 49. Whites are more likely to have $100,000 or more in investable assets between the ages of 60 and 75.

These savvy, business-minded women represent an untapped client group that asset managers can reach by targeting this group’s aspirations and desires to leave a legacy for their children.

“It’s our prediction that African American investors will represent one of the fastest-growing markets for the investment services industry,” says Mark Boles, executive vice president of Phoenix Cultural Access Group, a division of Phoenix Marketing International. The Los Angeles-based research firm conducted the study and is basing its forecast on proprietary research, census data, and information sources such as Target Market News.

Among affluent blacks, women are investing in 401(k) or 403(b) employer-sponsored plans at a higher rate than men as well as a trading or brokerage account. However, black men are 12% more likely to have stocks outside of an employer-sponsored plan.

Bole says that in the past, African Americans were leery of financial services advisers, but now investment companies can win their business by understanding their priorities and pitching appropriate products.

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