Planet Money - Financial advising while Black

Episode Date: April 28, 2023

After a successful career in advertising, Erika Williams decided it was time for a change. She went back to school to get an MBA at the University of Chicago, and eventually, in 2012, she got a job at Wells Fargo as a financial advisor. It was the very job she wanted.Erika is Black–and being a Black financial advisor at a big bank is relatively uncommon. Banking was one of the last white collar industries to really hire Black employees. And when Erika gets to her office, she's barely situated before she starts to get a weird feeling. She feels like her coworkers are acting strangely around her."I was just met with a lot of stares. And then the stares just turned to just, I mean, they just pretty much ignored me. And that was my first day, and that was my second day. And it was really every day until I left."She wasn't sure whether to call her experience racism...until she learned that there were other Black employees at other Wells Fargo offices feeling the exact same way.On today's episode, Erika's journey through these halls of money and power. And why her story is not unique, but is just one piece of the larger puzzle.Help support Planet Money and get bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

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She went back to school, got an MBA at the University of Chicago, thinking, I don't know, maybe I'll take a management job. But while she was there... I just got fascinated with economics and the capital markets. And I excelled in those classes. And I was just like, I'm really good at this. I really enjoy doing this. And so that became my focus. Erica graduated in 2008. Not a great year to enter finance,

but she found a job at an insurance agency, the whole time knowing what she really wanted to do. She wanted to be a wealth manager, a financial advisor at one of the big banks, the person you go to to help with your investments and retirement accounts, the person who manages your portfolio. And then one day, one of those banks called her. Wells Fargo wanted to recruit her for that exact job in one of Chicago's richest suburbs. When they told me that they had an office in Deerfield, Illinois, for me, I knew that the commute over two hours one way would be worth having an office in Deerfield. I see. Just because it was like so fancy and so wealthy. Absolutely. The North Shore was where the wealth was held. And one of the first things Erica Williams notices when she walks into her new job.

I was the only person of color. She looks around and is like, okay, I'm the only Black financial advisor in this entire office. But she'd been in rooms like that before. And actually, it seems like things are going really well. Her boss greets her and shows her to her office, which is big and airy. Out the window, you can see the building where the Chicago Bulls practice. She's like, what? It is day one, and I already have one of the best seats in the house. For her, it was amazing.

But what it did for the other people in the office was here I was, the only person of color and one of a handful of women having one of the premier offices. Now, this is a top of the line professional working environment. Eliteville. La creme de la creme. But on the first day, it feels like high school. Erica says people literally just start talking about her in front of her. Who is she? How did she get that office? What is she doing here? Awkward, but okay. She starts getting situated. The day goes on and her co-workers

don't really chat her up. No one's like, oh, hey, you're the new girl or let's get lunch sometime. Nothing. I was just met with a lot of stares and then the stares just turned to just, I mean, they just pretty much ignored me. And that was my first day. And that was my second day. And it was really every day until I left. This doesn't feel great. But Erica doesn't know exactly what to call the feeling. And look, it's 2012. And at this point, Erica is a Black woman in her 40s.

She's experienced racism before. But this thing doesn't feel like it rises to that standard. I use the word unfair. I didn't use the word racist because they didn't call me the N-word or whatever. I didn't think of it as racism. They brought me into the branch. They didn't necessarily include me in all of the activities or whatever. I didn't see it as discrimination because I was indeed there. She's thinking, I'm new here. Maybe I'm doing something wrong. Maybe the problem is me. Eventually, Erica would learn that it was not just her, that there were other Black employees in other Wells Fargo offices who were feeling the exact same way.

Hello and welcome to Planet Money. I'm Mary Childs. I'm Erika Barris. So often, this is what racism actually feels like in the workplace. Not one big thing, but a lot of little things. Inside the banks, which control so much money and power, Black employees have started to talk about it. To each other and to the legal system. And a lot of their stories are like Erica's. Not one big accusation, more of a what just happened.

Over and over again. Which makes it hard to see the full picture. So today on the show, we zoom in on one person's journey through those halls of money and power as she puts her one piece into the whole puzzle. Erica had started her new job at Wells Fargo with a lot of hope. But that hope quickly started to fade. One disappointment? That big, airy office that she had on the first day? Yeah, apparently it was only temporary.

Then she got her real office. They put me into basically what was a closet. They just took everything out of that room and put a desk and a phone and a chair. And that was my office. And I was very, even more isolated. I didn't see anyone. But she's like, okay, I'm just going to get to work. Erica gets what is called a book of business. It is a list of existing clients of the bank whose money she is now supposed to manage. Every wealth manager has one. It's at the core of what they do. Basically, the more money you manage, the more money you make.

It was about $2 million, which to me seemed like great. You know, I can work the $2 million. In order to succeed, Erica has to do two things. Number one, maintain good relationships with the existing clients in that book of business. Manage the combined $2 million in their investment accounts. And number two is the big one. Add new clients to that book of business. I was hired under a program called The Sprint to 24. business. I was hired under a program called the Sprint to 24. And I had nine months to open up 24 accounts. Nine months, 24 new accounts. It was an entry-level training program. Erica said the

stakes felt very high. If I could not do that, then it was game over. Wait, what do you mean game over? Game over. You're out of here. Wells Fargo says you wouldn't actually get fired if you failed this program. There weren't supposed to be repercussions. But the job was to build a book of business, to bring in accounts. Erica and two former co-workers we talked to said Sprint to 24 felt like a test. Like, can you actually cut it here? To open that many accounts as a brand new advisor, you've got to know people.

And Erica, she's not rich. She knows people, but she doesn't know people. She hits up friends, family, old business school classmates, and some of them say, yeah, you can manage my money. But she very quickly exhausts her network. To get new accounts, she's got to be going to parties, moving in circles. She doesn't typically move in. So she's working all the time. Evenings, weekends, during her two-hour commute. The sprint is real. The clock is ticking. I had to open up 24 new accounts. The clock is ticking. I had to open up 24 new accounts.

Meanwhile, she's also introducing herself to all her existing clients. So when a client from her book of business wants to meet, Erica's like, yes, of course, come on in. She's in the waiting area. And as I come out, her mouth just drops when she sees me because she was not expecting me to be a black woman meeting her in this office. And she was visibly shaken. And she said, it's okay, it's okay, it's okay. And I'm like, of course it is. It's okay. I just wasn't expecting.

I said, I understand. I understand completely. And she did not want to go back to my office or meet anywhere else. We sat in the foyer of the Wells Fargo office. This is a what just happened moment. Erica can't for sure say that this has anything to do with race. It didn't come up explicitly, but also she knew. Didn't come up explicitly, but also she knew. I had other colleagues and other branches that were in the cohort for the training program. And it was maybe three of us total of people of color.

And they, we would joke and laugh about when clients see us for the first time. And it wasn't just me. They were experiencing those same things too. It's not great. Erica feels like no one at her job really wanted her around. Not just the clients, also her coworkers. She says she's heard that behind her back, some people refer to her as the Black woman, not by name.

So she doesn't really feel like she can go to anyone for help. And she feels like her bosses just won't understand. To be fair, it's obviously different, but this was an intense environment, even for the white people. So it wasn't a collegial type of atmosphere for them. It wasn't. It was more competitive. But, you know, they'd golf. They'd have conversations. They'd, you know, go out to lunch. They'd team up, you know. A few people were friendly to her, like the administrative assistants, the client associates, the CAs. They were super nice.

And one or two others. But overall, the office does not feel good. And then, she says, someone tells her they've heard some of her peers are getting paid more than her. Oh, how did you find that out? From the CAs. Right, because they know everything. They know everything. They hear it all. Did you talk to anyone about it? Did you say, wait, hold on, how did that happen? I did say, hold on, how did that happen? I sat with that for a while and I'm like, wow, you know, they lowballed me coming in the door. Wells Fargo tells us that trainee salaries did vary. They say that was based on location and experience.

Despite everything, Erica succeeds. In nine months, she opens those 24 accounts. She has finished the sprint. I was very proud of myself and very happy, and I was hoping to instill confidence. I was hoping that they would say, oh yeah, she's really doing it, and I'd like to help her. She's helping herself, but I'd like to help her more. That was the hope. That is not what happened. Erica was hoping she would end up on a team of financial advisors. Teams are a huge way that you can succeed in this job because they let you combine your accounts and combine your profits.

But teams weren't assigned. They happened organically. And Erica just wasn't ending up on a team, no matter how hard she tried. By the way, Wells Fargo tells us they can't comment on these office dynamics from a decade ago, and that according to their records, Erica did not make an internal complaint while she was there. She's now been in this job about a year. And around this time, she gets headhunted by another big bank. And she's like, maybe it'll be better somewhere else. Just the gravity of it all, it just felt heavy. Like, this is not worth

it. So Erica leaves this job. And then two things happen. Number one, she gets a letter from Wells Fargo saying, you need to pay us some money. That Sprint to 24 is technically a training program and you're supposed to stay on for a certain amount of time after you complete it. But Erica left. And Wells Fargo is like, uh, yeah, owe us $50,000 now. The cost of the training. I thought it was petty, but it was real. So I didn't know what to do. I was just like, that was a good punch. But then the second thing happens. The same day that she gets

that letter, she gets a call, one that will change how she sees everything that's just happened to her. It's from a law firm in Chicago. And they tell her, we've heard through the grapevine that we should talk to you. Because there's this guy. A Black financial advisor, just like you, in Washington, D.C. And he is suing Wells Fargo for racial discrimination. They ask her, what kinds of things have you experienced in your job? She tells them. And eventually, they're like, do you want to join this lawsuit?

Suing one of the most established banks in the country. Erica says, yeah, yes, I do. That's after the break. The whole time Erica had been feeling like something might be off, Lance Slaughter, this Black financial advisor in Washington, D.C., he knew something was off. Lance had been working in financial services since the early 80s. He'd been a financial advisor for more than a decade at another big bank, Merrill Lynch, where he'd been involved in a lawsuit alleging workplace discrimination. That suit was still in progress when he started working at Wells Fargo.

Pretty soon after he arrives there, he's like, oh. It was pretty evident to me what was going on. I said, I don't need to watch this whole movie again. I have to figure it out. I know the ending. I know the ending. I've seen this one before. After Erica joins the Wells Fargo lawsuit, she realizes that she and Lance, they have experiences that are straight up similar. As Lance is talking, Erica is like, that, that, exactly that. And I'm like, yeah.

Yes, what he said. I felt that too. What did he say? What were the things, if you remember, that he said? You know, so he's been in this business a lot longer than I have, right? I'm a newbie. And so he can speak to the long-term ramifications of not being able to team up immediately. So he's able to quantify that in terms of real dollars.

Lance is kind of the mentor Erica never had at work. He's ticking through the things she experienced, talking about them in real economic terms. Lance tells Erica, just like you, I was not invited onto teams. And he's like, not being on Teams cost us. And you know what else I think cost me? It has to do with the all-important book of business.

That list of clients that Erica got handed right when she walked in the door. Lance is like, once you've been in this industry a little longer, I think you're going to see that white financial advisors often get a leg up when it comes to the book of business. He felt like he kept seeing them get handed these really big books by other white financial advisors, like when they retire. There always seemed to be sort of a succession plan that was in place that I was not a part of. But that way, I was not open to, was not offered to be a part of. But Lance also says, despite everything, he'd done okay. And like Erica, some part of him also kind of felt like, who am I to complain?

There aren't a lot of people crying about a Black man who's successful in this business, but thinks he should be more successful. The only one crying about that is the Black man who's successful in this business but thinks he should be more successful. The only one crying about that is the Black man. After talking to Lance, Erica changes her mind. She used to feel like this wasn't racism, and now she's like, yeah, yeah, it is. You know, there's so much nuance to institutionalized bias. There's so much nuance to racism. I didn't know how to articulate and didn't know how to recognize those nuances. I do now, but at the time, I looked at racism as just straight up hostility and not the little microaggressions. Erica and Lance feel like they now have a name for this experience. But there's still a question. Was

any of this illegal? Was it workplace discrimination? The person making the case that it was is Lance and Erica's lawyer, Linda Friedman. She's a white civil rights attorney. And throughout the 2000s, she was hearing a lot of stories that sounded like Lance and Erica's. I didn't meet anybody during that time period who worked at any of these firms who was Black, African-American, and did not have a claim. When it came to gender discrimination, Linda was a pro, like the big boom-boom-room case. If you know it, you know it. If you don't, you can probably guess what the boom-boom-room was.

That case, that was Linda's. And back when Linda was suing left and right on behalf of women on Wall Street, she went before this federal judge who had written the original complaint for Brown versus Board of Education. We were resolving a claim of class-wide gender discrimination and harassment, and she asked, why not race? And I answered sort of glibly, because there are not enough Blacks working on Wall Street in order to be able to bring a class. You had to have a critical mass in order to even bring the class action. A class action is a lawsuit brought on behalf of a group of people.

And those lawsuits can lead to the really big settlements and the big attention. In order to file a class action, Linda needed to show 40 examples of discrimination. If 40 people testify that they've suffered the same kind of intentional harm, that will equal a class. But banking was one of the last white-collar industries to really hire Black employees. And when they did integrate, Black employees still weren't getting hired as wealth managers or financial advisors. For a long time, there weren integrate, Black employees still weren't getting hired as wealth managers or financial advisors. For a long time, there weren't enough Black employees to make a class. But by the early 2000s, there's been progress.

A couple of the big banks have actually hired enough Black employees in this kind of position. And when those employees get the feeling that something in their workplace is off, they start reaching out to Linda. Because suing banks is kind of her thing. Who are we talking about? Pretty much all of them. Merrill Lynch, which is now Bank of America, Wells Fargo, Chase, Morgan Stanley. Morgan Stanley and Bank of America, by the way, are NPR sponsors. There are several cases specifically about Black financial advisors at the big banks. Linda's firm filed a class action against Merrill Lynch in 2005. Lance was a class member. The lawsuit argues that these Black employees faced pervasive discrimination. Linda's case is that White financial advisors consistently got more help and support, while black financial advisors were left to make it work on their own.

That they were not receiving walk-ins, leads, referrals, that they could compete if it was only left to what they could do on their own. But it was almost like one of my partners described it as one person is walking on the sidewalk and the other one has the movable sidewalk, and so they pass you by. Linda also argues that thing Lance felt about the book of business was true. White financial advisors were often handing off their big books of business to other white financial advisors. Her team actually did a data analysis in the Merrill Lynch case to look at this. And so if you actually looked at the differences, the black brokers should have been regarded as more successful

because they were bringing more new money to the firm, whereas the white trainees were simply taking the assets that had already existed and transferring them from senior brokers to junior brokers through teams. She didn't do the exact same data analysis at Wells Fargo, but she says they saw a similar pattern there too. In 2013, her firm filed a similar class action against Wells Fargo. That's when Erica Williams got involved. As that lawsuit was playing out, Erica was working as a financial advisor at

another big bank, JPMorgan Chase. She's been told that at Chase, she's not going to have the problems she had at Wells Fargo. And in fact, her book of business from day one is $65 million, not $2 million. Though she did have a weird feeling again because she's getting placed at bank branches in Black neighborhoods. On the one hand, it's great. She's back in the part of the city where she grew up, the South Side. On the other hand, the South Side is less rich on the whole than where she was working before. If you pull up the zip code and do the demographics for the South Shore of Chicago, poverty. And that's where they're sending you. That's where they're sending me. To be a wealth advisor. To be a wealth advisor. What are you thinking at this point? You're like, you said it would be different.

Yeah. And it is different. I guess that's true. It was different. It's different. And look, this is complicated. There is a significant wealth gap in this country between Black families and white families. Erica was seeing that up close.

But not all of the neighborhoods she worked in were poor. And Erica does want to work with Black families to help them build wealth. If you don't do that, the wealth gap just keeps getting bigger and bigger. Still, her job is to manage wealth. Existing wealth. And the bigger the wealth, the more she gets paid. When she talks to Linda, Linda says this actually could also be discrimination. Her firm ends up putting together a lawsuit against J.P. Morgan, too.

Erica is one of the plaintiffs. The lawsuit claims that Black financial advisors were discriminated against because they got placed in poorer neighborhoods and didn't get support in other ways, too. Like not getting opportunities to be on teams. All three of these cases end up settling. The Merrill Lynch case settles in 2013, and the bank pays $160 million. The Wells Fargo case settles in 2017 for $35.5 million. The JPMorgan Chase case settles a year later, in 2018, for $24 million. The JPMorgan Chase case settles a year later in 2018 for $24 million. Erica and Lance wouldn't tell us exactly how much money they got from those settlements, but they did get paid.

Erica also didn't have to pay back that $50,000 in the end. Wells Fargo no longer makes its trainees pay those costs if they leave, and they ended the training program that Erica was a part of, the Sprint to 24, some years ago. We reached out to all three banks about all of this. None of them could talk about the specific cases, but Bank of America, which absorbed Merrill Lynch in 2009, said that this case was a long time ago now and they've made strides since then. Like they've formed internal councils to support people of color on staff.

Wells Fargo told us they've tried to do a lot on diversity, equity, and inclusion. They have an internal team working on it, and they have a third party doing a racial equity assessment. J.P. Morgan said they've done a lot of work on racism and equity internally, though they and Wells Fargo add that there's always more to do. Linda says that, yeah, the banks actually have gotten somewhat better in recent years. internally, though they and Wells Fargo add that there's always more to do. Linda says that, yeah, the banks actually have gotten somewhat better in recent years. But, of course, there are still problems. And she said one thing she hears from Wall Street a lot when claims about discrimination come up is basically these problems are not because of things going on internally in our

workplace. It is because of the way the broader world works. It's not our fault. It's society's fault. We're in the business of, you know, making money. And so we look for customers who have money. And it's not our fault if there's a wealth disparity in this country. And of course, there is a wealth disparity in this country. But Linda's like, what I'm trying to do is make the workplace a little more fair. People will ask, do you think after almost four decades, you've made a difference on Wall Street? And on a good day, I'll say yes. But on most days, I say no, but we change the

victims. And I think that's the truth. I think the legacy of Lance and the legacy of Erica is that people aren't leaving broken. They know what happened. You know, they know what ran them over. And they know it's real. And that is a lot. We should say a settlement is not an admission of guilt. Because these cases were settled out of court, no judge or jury ever weighed in on whether this was actually discrimination.

So legally, that question has never been resolved. Lance and Erica and all the other Black financial advisors involved have been left to reckon with what happened for themselves. Lance actually stayed in his job at Wells Fargo after the settlement. He's still there now. Like, literally, when we spoke on the phone, that's where he was. He's 71 now, and he's planning to stay in finance until he retires. He says it's pretty awkward and difficult to be the guy who sued his workplace. But he wants to see change in the industry,

if that's possible. It has not happened as I would have hoped. It has not happened as I would have hoped. Culture is very resistant to change. It's worth noting that Wells Fargo has gone through a couple of controversies involving race in recent years. And Erica, she did not stick around to see whether the big banks would change. She feels like they won't. It's all the same. They all seem to be working from the same playbook. What does that playbook look like?

That playbook looks like I need to have a more diversified rank of financial advisors, wealth advisors. So I'm going to hire more women and I'm going to hire more people of color. Check and check. But then what do we do to ensure their success? Nothing. Erica left JPMorgan Chase in 2016. Then she went to a brokerage firm and now she works in a part of the industry where people try to use investing to promote social good. She says she still loves finance. She just had to do it somewhere else. Today's show was produced by Alyssa Jong-Perry with help from Emma Peasley and was fact-checked by Ciara Juarez. And they all helped with reporting. Editing by Sally Helm, additional production help from Willa Rubin, and engineering by Big thanks to Mirza Baradaran, author of How the Other Half Banks and The Color of Money. And huge thanks to Emily Flitter, author of The White Wall, How Big Finance Bankrupts Black America.

She also broke a lot of the stories we cite here. Their books and conversations with them inspired this episode. I'm Erika Barris. And I'm Mary Childs. This is NPR. Thanks for listening. And a special thanks to our funder, the Alfred P. Sloan Foundation, for helping to support this podcast.