There is confusion among most investors about what the term “wealth management’’ means or entails, and that confusion extends to investors from specific ethnic groups.

Many financial providers advertise wealth management services, but there are disagreements as to what services should be provided in a wealth management package. Despite those differences, many investors feel they know what “wealth management” means.

Spectrem’s Ethnic Segmentation Series report Advisor Relationships and Changing Advice Requirements shows that among three ethnic investor groups – African-Americans, Asians and Hispanics – African-Americans are far more familiar with the concept of wealth management. Eighty-one percent of African-Americans are familiar with the term “wealth management”. which is the same percentage of the non-ethnic investors studied in the Spectrem report.

Only 68 percent of Hispanic investors say they are familiar with the term “wealth management’’ while 71 percent of Asians state that they know of the term “wealth management.”

IN keeping with those previously stated statistics, only 17 percent of Hispanic and Asian investors say they are currently receiving wealth management services from their financial services providers. Twenty-one percent of African-American investors are receiving wealth management services, while 27 percent of non-ethnic investors are wealth management clients.

Interestingly, the kinds of financial providers providing wealth management are different depending on the ethnicity of the investor. For instance, 50 percent of African-Americans receiving wealth management services are getting them from a financial planning firm, while 23 percent are getting them from a brokerage firm.

But 41 percent of Asians receiving wealth management services are getting theirs from a brokerage firm and only 38 percent are receiving wealth management services from a financial planning firm. Approximately 15 percent of all investors are receiving their wealth management services from a bank.

Six percent of non-ethnic investors are receiving wealth management services form a mutual fund company.

 

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