Why Wealth Building For Black And Brown Students Matters

Within the United States, there are huge wealth gaps along racial lines. According to The Brookings Institution, the median net worth of a white family is $188,200, nearly ten times greater than that of a Black family. The median Hispanic family’s net worth is $14,000. Although there are many historic examples of Black and Brown families working to establish wealth, systemic racism and other discriminatory practices at the local and national level have worked against the building of large-scale assets.

Building wealth and understanding how to invest and manage money is an essential skill that is often shared with children in wealthy families. To build wealth in low and middle-income communities of color, it is essential that young people are taught these skills and given opportunities to use them. With this idea in mind, Prudential Financial, in partnership with the Student Freedom Initiative (SFI) and Stackwell, is launching the Student Investment Program (SIP) to help build generational wealth for Gen Z students of color. The program strives to “address the racial wealth gap across marginalized communities, confront subsequent barriers to financial wellness for future leaders and advance Prudential’s core vision of helping better serve those disproportionally impacted by historical economic and social inequities.”

According to Sarah Keh, Vice President of Inclusive Solutions at Prudential, “The racial wealth gap continues to grow with each generation. One of the primary ways people build wealth is through investments, but historically, Black Americans are less likely than White Americans to invest in the stock market.” She added, “SIP will build investor acumen and confidence at a young age, which will lead to a better understanding and trust in the financial markets for the long term. With Prudential’s support, SIP will expand access to and utilization of this critical wealth-building pathway for Historically Black Colleges and Universities (HBCUs) and Minority Serving Institution (MSI) students.”

The multi-year partnership will also include grants totaling $500,000 to students attending 43 HBCUs and other MSIs within the SFI network. These grants will be distributed to participating students’ investment accounts over a 12-month period to encourage participants to sustain investment commitments, while normalizing positive wealth building behaviors.

Keh believes the SIP program is an important step in the company’s larger goal of diversifying the next generation of leaders, noting that “increasing representation in financial markets is essential to closing the racial wealth gap.” Prudential’s vision is to expand access to investing, insurance, and retirement security. The company will provide students with tools and capital to manage their financial futures, safeguard themselves against risks, and improve financial preparedness for the future.

Stackwell, a company that makes investing easier and is focused on building Black generational wealth, is partnering with Prudential. The SIP program will use Stockwell’s platform to provide students with investment education and support through its app and community-based engagements. According to Trevor Rozier-Byrd, Founder and CEO of Stackwell, “We will take a multi-channel approach to educating participating students in the SIP program through the delivery of in-app educational content, directed social media content and engagements, and virtual and in-person investment workshops and focus groups.” He added, “The cultural relevance of the education we provide will be critical as it will help [give] the students the context, tools, and information they need to increase their investor confidence.” An added benefit of the program, from Rozier-Byrd’s perspective, is that it will help to normalize conversations about investing and building wealth amongst students’ friends, families, and broader communities of color. This type of impact is exactly what Rozier-Byrd is hoping for with the SIP program.

The Student Freedom Initiative, founded by African American billionaire Robert F. Smith, is also a partner with Prudential. When asked how Gen Z is different and why the focus on this generation, Keith Shoates, CEO of the Student Freedom Initiative, shared, “There are two characteristics that uniquely position Gen Z to take advantage of this program. The first is that this generation grew up with computers, smartphones, and other tools that facilitate this kind of learning.” He believes that advancements in technology have allowed for the creation of platforms like Stackwell that can disseminate accessible financial information in ways that were not possible in the past.

The second characteristic is that “these students live in a vastly different nation from the one their parents grew up in, one with a broader realization that we must strive for diversity, equity and inclusion with an emphasis on addressing the racial wealth gap to reach equity across all levels of our society.” By providing $1,000 grants and financial acumen to the most affected generations of students attending HBCUs and MSIs, Shoates believes SIP will “empower individuals to take control of their financial futures and address one of the contributing factors to the wealth gap.”

Overall SIP is focused on leveling the vast racial wealth gap in the United States and bringing more opportunities to communities of color.