♪ ♪ ♪ >> Multicultural millionaires are growing by leaps and bounds throughout the United States.

We welcome to "The Chavis Chronicles" Melinda Hightower, managing director of UBS Bank.

>> Major funding for "The Chavis Chronicles" is provided by the following.

At Wells Fargo, we are committed to diversity and understand our responsibility in supporting and empowering diverse communities.

Diversity and inclusion is integral to the way we work.

Supporting the financial health of our diverse customers and employees is one of the many ways we remain invested in inclusion for all today, tomorrow, and in the future.

American Petroleum Institute -- through the core elements of API's Energy Excellence Program, our members are committed to accelerating safety, environmental and sustainability progress throughout the natural-gas and oil industry in the U.S. and around the world.

You can learn more at api.org/apiEnergyExcellence.

Reynolds American, dedicated to building a better tomorrow for our employees and communities.

Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

♪ >> We're pleased to welcome to "The Chavis Chronicles" an outstanding leader in financial services.

Melinda Hightower, welcome to "The Chavis Chronicles."

>> Thanks so much, Dr. Chavis.

It's a pleasure to be here.

>> You're one of the few managing directors of UBS.

But, Melinda, tell us first something about your upbringing.

I understand you're from the Big D -- Detroit.

>> Yes!

Detroit born and raised.

So, grew up in Detroit.

My mother was -- worked for the city of Detroit.

She was head of labor relations, so that meant that she negotiated all of the union contracts for the city.

She had a team of lawyers working for her.

My father, in an odd twist, worked for Ford, and he was a member of the AFL-CIO.

So dinner conversation, let me tell you, was very, very energetic.

>> So you learned something about negotiations early on... >> Very early on, yes.

>> ...from your father and your mother.

>> I did.

>> And then you went to undergraduate at Cornell.

>> That I did.

>> Great school.

What did you major in?

>> So, I was focused on labor relations, and that's primarily because I was fascinated with the work that my mom was doing.

And so that -- I wanted to have negotiations and contract negotiations be a huge part of my work.

So I focused on that space.

>> How did you wind up now being a Black woman, managing director, of a global bank?

>> Sure.

Well, it's funny how I'm -- how I went to financial services because I grew up really not trusting financial institutions.

The way I saw it, they didn't have the representation that they needed.

And even when I would go with my parents or my grandparents to the bank, we always kept cash at home just in case something happened.

But it's really through law that I found a career in financial services.

So, I was a lawyer who worked on lots of corporate transactions.

And so part and parcel of that is, I was partnered right next to lots of bankers and financial institutions who were working on those same transactions.

And it was through that proximity that I got to understand them as people, and I began to trust financial institutions.

And it opened up a pathway that, when I was asked to join one, it made sense.

>> Tell us about the realities and the opportunities about wealth creation for Black American, for other communities of color.

>> The reason I'm so focused on wealth is that, for me, looking at Black millionaires, it's important to understand that they exist.

There's a significant number, and that population is growing by leaps and bounds.

So the data shows us that it's one of the fastest growing groups overall, and that when you look at it, Black and Hispanic wealth is growing at a faster rate than wealth overall in the country.

>> Really?

>> Yes, they're making money faster, often 1 to 1 1/2 times faster.

So when we see that, it's really the future of wealth, when you think about it.

When you think about the changing demographics in this country, wealth is being diversified just like the country is.

More women are holding wealth, more multicultural individuals are holding wealth, more younger people are holding wealth.

So the future of wealth is incredibly diverse, and it's part of what is driving all of the change that you see in financial inclusion today.

>> So the whole issue of diversity, equity, and inclusion is more than just a rhetorical concept.

>> Yeah, it's a business survival concept.

Right?

So, in the past, diversity, equity, and inclusion, or D&I, for shorthand, was -- you know, many would have considered it a "nice to have" or something that you would do after you accomplished all of your corporate goals.

That is no longer the case.

In order to be relevant in the future, you have to be able to serve your clients, and those clients are going to be diverse.

And so, from top to bottom, from the people that you have advising them, from the products that are in the field, from the executive leadership that you have, taking a look at solutions, they have to reflect the society in which we live.

Otherwise, those who don't make that move will be on the outside looking in.

>> And you're saying that phenomenon is growing.

>> It's upward, right?

So when we take a look at all people of color in the U.S., we estimate that there are about 2 million individuals who have at least $1,000,000 or more, and that is excluding their home, that primary residence.

That's the engine of wealth for so many of us.

So excluding your residence, we have about 2 million.

>> 2 million... >> 2 million -- >> ...persons of color?

>> Yep, that are millionaires.

>> Wow.

>> Yep, and that trend is -- >> That's a story that's not focused on much.

>> It isn't.

And I think that -- We focus on the racial wealth gap, and I think there is a racial wealth gap to be focused on within even multicultural millionaires, is what I look at them as.

Because when we take a look at racial inequities, they have really shaped the wealth journeys of multicultural millionaires.

And it shows up in a couple of different ways.

First, there's the traditional racial wealth gap.

But the second, when you look at it, we don't have as many multicultural millionaires as we should have.

And even the wealth that they control isn't the same level of wealth as their counterparts.

But there's a path forward, and I believe we ended up talking to a number of them -- more than 3,000 -- to find out what their journeys were and what the path forward was for each of them.

>> As I understand it, UBS conducted a major study about wealth creation, wealth management, financial literacy.

Share with us what you believe are some of the most important points, the most stunning point from that study.

>> Sure.

And I think there were things we knew and things that we were really surprised to see.

So, just in my experience, I was not surprised to see that real estate was king for many Black investors.

It has been a heralded pathway for so long.

What I was really surprised to see, even at the millionaire level, was the hesitancy around investing in the stock market.

So, we saw that, on average, when you look at someone's portfolio of wealth, only 26% of it for Black investors and 20 -- you know, roughly the same percentage for Hispanic investors -- were allocated to equities.

And that was really interesting for me because when you think about it, you only have to look back over the last 10 years.

If you had been invested in the S&P for the last 10 years, your return would have been in excess of 300%.

And there's not many places in the country where real estate is going to do that for you.

So I was really surprised to see the lack of diversification, you know, in terms of not putting all of your eggs in one basket, the lack of diversification into equities, especially for people who had achieved financial success.

Real estate is an incredible pathway to wealth, but it's also, when you look at really building generational wealth, you've got to branch out.

>> So you have direct contact with brothers and sisters from the community who are doing very well.

>> That's right.

And the stories that we heard from them were really inspirational.

And racial equity was a part of it, right?

So even though we know that there are Black millionaires that are out here creating wealth in any number of ways, they understand, too, that racial injustice exists.

For example, one in two experience discrimination themselves, and that's millionaires at the highest wealth levels.

You would think that they, of all people, would have equitable treatment, but that's not the case.

And so there's still a lot of work to be done on financial inclusion.

>> But I'm listening to you.

You're saying that being able to not only understand the truth, know the truth, but to debate the truth and resolve intellectually around it is very important.

>> I think it's critical.

We need to be rooted in historical context so that it will guide our solutions going forward.

And it's particularly true when we think about financial inclusion.

So when you think about the history of banking and financial services in this country and the history of wealth in this country, Black people have generally built wealth in spite of financial institutions, not because of them.

>> We had to overcome barriers and obstacles.

>> Absolutely.

And we've had to navigate them and chart our different paths to wealth.

It's the reason why I firmly believe that the primary source of wealth, it's less likely to be investments for Black people because financial inclusion was -- the system wasn't built for us.

And so you have to understand that in order to understand now, in this day and age, why people like my grandparents, people like me, grew up not trusting financial institutions.

So you have to understand the genesis of the trust gap in order to understand how to bridge it going forward.

>> That's a big job.

And I know you have an office in San Francisco and one in New York -- you're bicoastal.

>> Mm-hmm.

>> How do you keep up with all this?

>> Well, I have a large team that's working on it.

So, right now, we have a team of upwards of 100 individuals at UBS that are really focused on how to make our platform more inclusive.

And financial inclusion doesn't just start with us.

It's an entire industry movement that we're looking at.

And couple of the things that we're focused on when we talked to multicultural millionaires and we saw what the path forward was, we understood that, unlike the average millionaire who earns their wealth primarily through investments, multicultural millionaires and specifically Black millionaires have a varied path to wealth.

It's the real estate.

It's wealth being earned at work through the 401(k).

It's wealth being earned as an entrepreneur and, surprisingly, wealth that's coming through inheritance.

And that, for me, just personally was really interesting that this new set of millionaires had their wealth journeys jumpstarted by their families.

>> That's very interesting.

So it's very important for families to know that the family itself can provide an opportunity for wealth creation.

It's just not a sole individual.

>> That's right.

And I think that it's not just the wealth that you pass down, it's also the lessons that you teach.

So when you think about the fact that financial habits are really formed as early as age 3 and pretty much cemented by age 5 -- >> Really?

>> Yeah, you got to start early.

>> That early?

>> That early.

>> 3 years old?

>> 3 years old.

Kids are understanding money concepts, and we all know that even if you're not intentionally talking to your kids, they're observing you, and they're learning from looking at your experiences and how you deal with money and how you deal with wealth.

What is so interesting is that, that family money lessons, those are passed down.

When you take a look, for example, as Black people in real estate, 6 out of 10 Black millionaire investors use real estate as a path to wealth.

And when we asked them why, there were a number of reasons, but the one central one that stood out is because their family taught them about the value of owning property.

And that just goes to show those money lessons that you get early on are influencing decisions that we make as adults.

>> From your perspective, how are Black women doing in terms of wealth creation?

>> Well, I will say, just as a Black woman lawyer, it is an incredible time for us.

Black women are really part of this renaissance that we're having around Black wealth.

And their paths are incredible.

So, when you take a look at the wealth journey for Black women in particular, one in two have entrepreneurship really driving that wealth journey.

And a quarter of Black women have entrepreneurship as a -- as a primary source, the primary driver of their wealth.

So what you see is a pattern and a practice of Black women really taking control of their own destinies and moving the needle forward.

And it's incredible to be a part of that.

>> And then, how does the bank play a role in this, in terms of financial literacy, getting an understanding of the pathways, the various pathways, to wealth creation?

>> Sure.

So I think it starts on a couple of different fronts.

The first front that it starts with is just understanding the journeys of our clients, of Black people, of Black women, Black men, really understanding how they built their wealth so that we don't come to the table with any preconceived notions when we're having those conversations.

The second way it comes in is in the solutions that are on the table.

For example, Black investors are super, super focused on Black philanthropy, meaning giving back to Black cultural institutions, as well as investing in Black businesses.

So, as a bank, you have to think about that as you develop the solutions that you are offering to your clients.

You have to develop investment solutions that allow for investment into Black enterprises.

You have to develop philanthropic instruments that allow for support of Black charitable organizations.

So that's another thing that we think about is really on the services front.

And then, it really is -- our job is to foster conversations.

We talked about how it starts incredibly young.

And financial institutions are a part of that, really having that dialogue or assisting with that dialogue.

When you look at some of the advancements that have been made where you can now have banking accounts, for example, for children who are under age 18, that is one of the ways that you can start even earlier fostering that conversation and that wealth mind-set, and it's incredibly important.

>> How do you make sure that people not only use the right technology but overcome some of these gaps that we face?

>> I think technology is leveling the playing field.

So, before -- think about it -- you were really limited to the local options that were within your community.

And for many communities, there weren't many, if at all, you know, options that were on the table.

But now, through technology, you really could bank anywhere with any bank.

And that's so critically important because it really forces everyone to step their game up and to earn that customer loyalty and value.

The other way that technology is really changing things is through education.

So, for example, what comes to mind is an app called Goalsetter, which is founded by Tanya Van Court, African-American woman who used to work at Nickelodeon.

She is developing this in order to ensure the financial-literacy needs of Black children.

And as children learn, families are learning, too.

And that app covers basic concepts from banking all the way to investing concepts.

And so technology is really a tool that can be leveraged to further financial literacy, and we're seeing that really in real time.

>> We have a lot of inquiries, particularly on social media, about cryptocurrency.

>> Yep.

>> What's your perspective on cryptocurrency?

>> Look, I think that digital assets like cryptocurrency, there is a future in them.

But like all investment vehicles, everything in moderation.

You have to step back and think about it as part of your broader strategy for how you're invested.

So for assets like crypto, for assets like even real estate, you have to think about, "How much money am I allocating to this vehicle?"

And for me, it's really sort of part of that broader journey that's critically important.

How risky is it?

And is it offset by something else that I'm invested in that is less risky?

>> You shouldn't put all of your eggs in one basket.

>> That's right, that's right.

>> You have to have a broad, diverse portfolio.

>> Absolutely.

Diversification is key, not just in how you invest your money but also in how you earn it.

So when we talk to multicultural millionaires, we've found that they don't have just one way of earning money.

They earn money in any variety of ways.

And so multiple streams of income and wealth coming in and multiple ways of making that wealth grow with how you're invested.

>> Overall, the banking industry, financial-services industry, are you seeing that industry become more diverse?

>> It has been a long time coming and long overdue, but we are seeing more diversity over time, and we're seeing it at the top ranks.

You know, what used to happen with financial services is, you would have a ton of diversity at the early stages of careers, in junior roles, and people would then leave.

But now we're seeing it happen, sort of a sea change happen at the top from executives like the Thasunda Brown Duckett, who was with me at JPMorgan and is now at TIAA.

You're seeing her becoming more of the rule and not the exception.

>> We're going to see more multicultural brothers and sisters in the C-suites.

>> You're gonna see more people like me in the C-suite bringing our whole selves to work and really calling to question why we are not being more inclusive in the industry.

And I think it's important that those voices exist.

Quite honestly, I think I have been in financial services for a long time, and I was in law before that, both industries that are majority white industries.

So it's a lonely place being the only one in the room.

And you have these two competing concerns every time you step in, the first being that you have to work twice as hard, even coming in the gate.

And then the second thing -- >> Even with your background, you still have to work twice as hard.

>> Twice as hard.

And I think that's part of it.

You come in incredibly credentialed, so your success cannot be denied.

And then, the second piece of it is, is that there's really no margin for error, because if you fail, there's this pressure that everyone else behind you will have the door shut.

So with those twin competing concerns, excellence really isn't an option.

You have to be good every single day.

>> Tell us, from your perspective, the importance of getting an academic education.

>> I think it's foundational and essential.

I wouldn't be here today if I didn't have that foundation of how to think critically, of really doing so in a room of my peers, being challenged and challenging back.

That kind of thought process and that systematic approach to critical thought is something that honestly is invaluable.

And it's served me in good stead.

It's opened doors for me that I think other -- would previously have been closed.

>> What guidance would you offer to youth of America, but particularly to multicultural youth, about considering financial services as a career path?

>> It's still an incredible career path, especially when you think about the advent of technology.

We call it fintech.

It's an amazing career.

>> Fintech.

>> Fintech.

You can combine -- It's technology that exists within financial services.

So when you think about companies like Wealthfront, and that's basically a tool that allows you to go online, answer a few questions, and it will map on your investments for you.

So imagine being able to build that from scratch, having that be part of something that you've built from the ground up.

I think it's absolutely necessary for multicultural youth because your perspective is needed.

The questions that are being asked in order to build those solutions, we need to be at the table so that we are included.

And I can't tell you how many times that I've sat in on meetings and I go, "Well, wait.

What about this?"

And I'm operating from the perspective of a Black woman when I talk about that, when I'm questioning things as products are being built.

So I think it's an incredible career to be part of really something that's the fabric of this nation in financial services.

>> What is your greatest learning out of your career thus far?

>> I think my greatest learning out of my career is that when it's all said and done, you know, we are the product of our early experiences, right?

They really have so much of an influence on all of the decisions we make -- financial decisions, family decisions.

And so, for me, that was the biggest lesson learned.

We can expand our knowledge, but having that incredible foundation is critically important.

And it's part of the advice that I would give to individuals who are really thinking about their own wealth journey -- start early.

The earlier you start, the better off you will be because the biggest asset that you can have in building wealth is time.

>> Melinda Hightower, thank you for joining "The Chavis Chronicles."

>> Thank you.

>> For more information about "The Chavis Chronicles" and our guests, please visit our website at TheChavisChronicles.com.

Also, follow us on Facebook, Twitter, LinkedIn, YouTube, Instagram, and TikTok.

Major funding for "The Chavis Chronicles" is provided by the following.

At Wells Fargo, we are committed to diversity and understand our responsibility in supporting and empowering diverse communities.

Diversity and inclusion is integral to the way we work.

Supporting the financial health of our diverse customers and employees is one of the many ways we remain invested in inclusion for all today, tomorrow, and in the future.

American Petroleum Institute -- through the core elements of API's Energy Excellence Program, our members are committed to accelerating safety, environmental and sustainability progress throughout the natural-gas and oil industry in the U.S. and around the world.

You can learn more at api.org/apiEnergyExcellence.

Reynolds American, dedicated to building a better tomorrow for our employees and communities.

Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

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