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Racial Concordance in the Market for Financial Advice

Author

Listed:
  • Christopher P Clifford
  • William C Gerken
  • Tian Qiu

Abstract

We examine the role of race and racial concordance between financial advisors and their local community. We document significant differences in stock market participation based on community racial composition, as well as differences in the characteristics of communities served by minority advisors. Notably, minority advisors are more likely to serve racially concordant communities, which tend to be poorer. We find that racial concordance has only a modest relation with local stock market participation. However, while minority advisors are more likely to leave the industry, this relation is mitigated among advisors located in more concordant communities. (JEL G20, G50, D14, J15)

Suggested Citation

  • Christopher P Clifford & William C Gerken & Tian Qiu, 2023. "Racial Concordance in the Market for Financial Advice," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 12(4), pages 906-938.
    • Handle: RePEc:oup:rcorpf:v:12:y:2023:i:4:p:906-938.
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    File URL: http://hdl.handle.net/10.1093/rcfs/cfad005
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    More about this item

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G50 - Financial Economics - - Household Finance - - - General
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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