Needed: Financial Planning Services for Increasingly Affluent African-Americans

Windsor, CT, January 31, 2005 � Increasing income and buying power signals a growing need for financial planning services among the nearly 35 million African-Americans who account for about 12 percent of the U.S. population, according to LIMRA International.

“Buying power of African-Americans is outpacing that of the general U.S. population,” said Nilufer Ahmed, Ph.D., author of the LIMRA report Marketing to African-Americans. “Ownership of life insurance also exceeds that of the general population, while ownership of investment products tends to be lower than their white counterparts. We found definite interest among African-Americans in working with financial planners as advisors.”

LIMRA surveyed a large group of African-Americans aged 25-64 representing household income of at least $25,000. Among the findings:

  • Life insurance ownership among the population is high, but many may not have enough insurance.

  • African-Americans are more likely than the general population to be concerned about the adequacy of their savings and of the financial well-being of aging parents and relatives.

  • Like other groups, African-Americans express a strong preference for face-to-face meetings with a representative for financial advice.

The survey found that only one in four African-Americans has a professional financial advisor, suggesting an opportunity for financial professionals to serve the market.

“African-Americans are far more likely to be receptive to the professionals they feel they can trust: someone who represents a well-known company, is recommended by friends or relatives, and who is involved in local community development,” Ahmed says. “This means that time and effort are essential for success.”

LIMRA Contact: Howard S. Drescher, 860-285-7875, hdrescher@limra.com

LIMRA International is a worldwide association providing research, consulting, and other services to nearly 850 insurance and financial services companies in more than 60 countries. LIMRA was established in 1916 to help its member companies maximize their marketing effectiveness.