Hostname: page-component-78c5997874-94fs2 Total loading time: 0 Render date: 2024-11-18T18:55:21.022Z Has data issue: false hasContentIssue false
  • English
  • Français

The US Racial Wealth Gap and the Implications for Financial Inclusion and Wealth Management Policies

Published online by Cambridge University Press:  19 February 2018

DAWN BURTON
DAWN BURTON*
Affiliation:
email: dawnburtonsurname@yahoo.co.uk
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper contributes to debates on economic inequality and ethnic and racial dimensions of social policy by focusing on the US racial wealth gap and assessing in what ways the private wealth management industry has contributed to this gap and reinforced white supremacy. The combined effects of the private wealth management industry reproducing whiteness and the industry being embedded in whiteness act as a barrier to developing a wider understanding of the savings and investment behaviour of people of colour. The paper addresses the role of public policy in closing the gap for investment advice, whether it should become a direct provider, or a facilitator to encourage the wider engagement of existing market participants.

Type
Article
Information
Journal of Social Policy , Volume 47 , Issue 4 , October 2018 , pp. 683 - 700
Copyright
Copyright © Cambridge University Press 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Allen, M.P. (1987), The founding fortunes: A new anatomy of the super-rich families in America, New York: EP Dutton.Google Scholar
Asante-Muhammed, D., Collins, C., Hoxie, J. and Nieves, E. (2016), The ever-growing gap, Institute for Policy Studies and the Corporation for Enterprise Development: Washington.Google Scholar
Berkowitz, M. (2012), ‘The Madoff paradox: American Jewish sage, savior and thief’, Journal of American Studies, 46, 1, 189–202.Google Scholar
Blau, F.D. and Graham, J.W. (1989), ‘Black/White differences in wealth and asset composition’, National Bureau of Economic Research Working Paper No. 2898.Google Scholar
Birmingham, S. (1977), Certain people: Americas black elite, Little Brown.Google Scholar
Brimmer, A.F. (1988), ‘Income, wealth, and investment behavior in the black community’, American Economic Review, 78, 151–155.Google Scholar
Britton, D. (2014), Minority clients want culturally diverse advisory firms. Wealthmanagement.com. 8 January.Google Scholar
Bulmer, J.M.T. and Stotvig, S. (1997), ‘Corporate identity and private banking: a review and case study’, International Journal of Bank Marketing, 15, 5, 169–184.Google Scholar
Capgemini (2012), Trends in global wealth management: A high net worth client perspective.Google Scholar
Campbell, J.Y. and Viceira, L.M. (2002), Strategic Asset Allocation, Oxford: Oxford University Press.Google Scholar
Cassis, Y., Cotterell, P., Fraser, M.P. and Fraser, I.L. (2009), The world of private banking, Ashgate Publishing: Aldershot.Google Scholar
Charles, K. K., Hurst, E. and Roussanov, N. (2009), ‘Conspicuous consumption and race’, The Quarterly Journal of Economics, 124, 2, 425–467Google Scholar
Choudhury, S. (2002), Racial and ethnic differences in wealth and asset choices, Social Security Bulletin, 64 (4). Available at https://www.ssa.gov/policy/docs/ssb/v64n4/v64n4p1.html. Accessed 5/7/2017Google Scholar
Coates, T. (2014), ‘The case for repatriations’, The Atlantic, June. Available at: https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/. Accessed 5/7/2017.Google Scholar
Colby, S.L. and Ortman, J.M. (2015), Projections of the size and composition of the US population: 2014–2060, Current Population Reports, March, US Department of Commerce, Economics, and Statistics Administration, US Census Bureau.Google Scholar
Conley, D. (2009), Being black, living in the red: Race, wealth, and social policy in America, University of California Press: California.Google Scholar
Credit Suisse Research Institute (2014), Wealth patterns among the top 5% of African-Americans, Credit Suisse: Geneva.Google Scholar
De Bondt, W. (2005), The values and beliefs of European investors’, in Knorr Cetina, K. and Preda, A. (eds.) The sociology of financial markets. Oxford University Press: Oxford. 163–186.Google Scholar
Deloitte (2011), The next decade in global wealth among millionaire households.Google Scholar
Durand, R., Newby, R. and Sanghani, J. (2008), ‘An intimate portrait of the individual investor’, Journal of Behavioral Finance, 6, 4, 193–208.Google Scholar
Ely, R.J. and Thomas, D.A. (2001), ‘Cultural Diversity at Work: The Effects of Diversity Perspectives on Work Group Processes and Outcomes’, Administrative Science Quarterly, 46, 2, 229–273.Google Scholar
Farlie, R.W. and Robb, A.M. (2008), Race and entrepreneurial success: Black-, Asian-, and White-owned businesses in the US. MIT Press: Cambridge, Mass.Google Scholar
Frankfurter, G.M. and McGoun, E.G. (2000), ‘Market efficiency or behavioural finance: The nature of the debate’, Journal of Behavioral Finance, 1, 3, 200–210.Google Scholar
Glennerster, H. (2012), ‘Why was the wealth tax for the UK abolished? Lessons for the policy process and tackling wealth inequality’, Journal of Social Policy, 41, 2, 233–249.Google Scholar
Harmon, A. (2010), Rich Indians: Native people and the problem of wealth in American history, University of North Carolina Press: Chapel Hill.Google Scholar
Herring, C. and Henderson, L. (2016), ‘Wealth inequality in Black and White: Cultural and structural sources of the racial wealth gap’, Race and Social Problems, 8, 1, 4–17.Google Scholar
Treasury, HM (2015), Review of the Money Advice Service. HM Treasury: London.Google Scholar
Ho, K. (2009), Liquidated: An ethnography of Wall Street, Durham and London: Duke University Press.Google Scholar
Kempson, E., Whyley, C., Collard, S. and Caskey, J. (2000), In or out Financial exclusion: a literature and research review. Personal Financial Research Centre, Consumer Report No. 3.Google Scholar
Kendall, D. (2008), Members only: Elite clubs and the process of exclusion, Lanham MD: Rowman and Littlefield Publishers Inc.Google Scholar
Kijakazi, K. (2016), ‘Closing the racial wealth gap: Establishing and sustaining an initiative, Race and Social Problems, 8, 1, 136–145.Google Scholar
Lipsitz, G. (1998), The possessive investment in whiteness: how white people benefit from identity politics, Philadelphia: Temple University Press.Google Scholar
Lui, M. (2009), Laying the foundations for national prosperity: the imperative of closing the racial wealth gap, Oakland, CA: Insight Centre for Community Economic Development.Google Scholar
Martin, R. (1999), ‘The new “geographical turn” in economics: some critical reflections’, Cambridge Journal of Economics, 23, 1, 65–91.Google Scholar
Maude, D. (2006), Global private banking and wealth management, John Wiley and Sons: Chichester.Google Scholar
McDowell, L. (2011), Capital Culture: Gender at Work in the City, John Wiley and Sons: Chichester.Google Scholar
McElwee, S. (2015), Why disparate impact claims are essential to racial justice, Policyshop, 25th June, New York: Demos.Google Scholar
McKernan, S., Ratcliffe, C., Steuerle, C.E. and Zhang, S. (2013), Less than equal: Racial disparities in wealth accumulation, The Urban Institute: Washington.Google Scholar
McNamee, S. and Miller, R. (2014), The meritocracy myth, Rowan and Littlefield: Lanham, MD.Google Scholar
Meschede, T., Hamilton, D., Munoz, A.P., Jackson, R. and Darity, W. (2016), Wealth inequalities in Greater Boston: Do race and ethnicity matter? Federal Reserve Bank of Boston. February, Report No. 2016:02.Google Scholar
Nash, A. and Strobel, C. (2006), Daily life of Native Americans from post Columbian through nineteenth-century American daily life through history. Greenwood Press: Westport.Google Scholar
Natella, S., Meschede, T. and Sullivan, L. (2014), Wealth patterns among the top 5% of African-Americans, Impact Series Credit Suisse Research.Google Scholar
Nembhaard, J.G. and Chiteji, N. (2006), Wealth accumulation and communities of colour in the US current issues, University of Michigan Press: Michigan.Google Scholar
Nofsinger, J.R. (2005), ‘Social mood and financial economics, Journal of Behavioral Finance, 6, 3, 160–175.Google Scholar
Oliver, M. and Shapiro, T. (2006), Black wealth/White wealth: A new perspective on racial inequality, London: Taylor and Francis.Google Scholar
Olsen, R.A. and Cox, C.M. (2001), ‘The influence of gender on the perception and responses to investment risk: The cases of professional investors’, Journal of Psychology and Financial Markets, 2, 1.Google Scholar
Orton, M. and Rowlingson, K. (2007), ‘A Problem of Riches: Towards a new Social Policy Research Agenda on the Distribution of Economic Resources’, Journal of Social Policy, 36, 1, 59–77.Google Scholar
Peck, J. (2005), ‘Economic sociologies in space’, Economic Geography, 81, 2, 129–175.Google Scholar
Pak, S.J. (2013), ‘Reputation and social ties, J.P. Morgan and Co and Private Investment Banking’, Business History Review, 87, Winter, 703–728.Google Scholar
Pompion, M.M. (2009), Advising Ultra-Affluent Clients and Family Offices, New Jersey: John Wiley and Sons Ltd.Google Scholar
Prudential (2016), The African-American financial experience 2015–16. Prudential: Newark, N.J.Google Scholar
Roithmayr, D. (2014), Reproducing racism: How everyday choices lock in racism, New York: New York University Press.Google Scholar
Rowlingson, K. and Connor, S. (2011), ‘The ‘Deserving’ Rich? Inequality, Morality and Social Policy’, Journal of Social Policy, 40, 3, 437–452.Google Scholar
Rowlingson, K. and McKay, S. (2011) Exploring and tackling inequalities between rich and poor. Policy Press: Bristol.Google Scholar
Sayer, A. (2014), Why we can't afford the rich, Policy Press: Bristol.Google Scholar
Shapiro, T.M. (2004), The hidden cost of being African American: How wealth perpetuates inequality, Oxford: Oxford University Press.Google Scholar
Shapiro, T.M. (2017), Toxic inequality: How America's wealth gap destroys mobility, deepens the racial divide, and threatens our future, New York: Basic Books.Google Scholar
Shapiro, T.M., Meschede, T. and Sulliva, L. (2015), The racial wealth audit: Measuring how policies shape the racial wealth gap. IASP and Demos.Google Scholar
Shin, L. (2015), ‘The racial wealth gap: Why a typical white household has 16 times of wealth of a black one’, Forbes, 26th March.Google Scholar
Skinner, L. (2015), ‘What it's like being an African-American financial adviser, Investment News, 14 December. Available at: http://www.investmentnews.com/article/20151214/FREE/151219979/what-its-like-being-an-african-american-financial-adviser. Accessed 5/7/2017.Google Scholar
Spectrem Group (2015), Marketing wealth management to ethnic investors. Spectrem Group White Paper.Google Scholar
Sullivan, L., Meschede, T., Dietrich, L., Shapiro, T., Traub, A., Ruetschlin, C. and Draut, T. (2016), The racial wealth gap: Why policy matters. Institute for Assets and Social Policy, Brandeis University (Boston) and Demos, New York, NY.Google Scholar
Thaler, R. and Sunstein, C. (2008), Nudge: Improving decisions about health, wealth and happiness, Yale University Press: New Haven, CT.Google Scholar
Touryalai, H. (2016), ‘Our diversity problem’, Wealth Management, 1st March. Available at http://www.wealthmanagement.com/archive/our-diversity-problem. Accessed 5/7/2017.Google Scholar