Racial Concordance in the Market for Financial Advice

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 drop out of the industry, this relation is mitigated among advisors located in more concordant communities