Literature suggests that the use of a financial expert by Black households improves savings and investment behaviors. However, these households lack the financial knowledge and sophistication needed to select an appropriate financial expert. This admitted inability results in Black households relying on the recommendations of friends and family in selecting and hiring a financial expert. However results from this study suggest that Blacks who have successfully chosen a financial expert, i.e., are satisfied, are nearly two times (92 %) less likely than non-Blacks to refer their financial planner to others. Decomposition analyses indicate that over 80 % of satisfied Blacks should be willing to provide a referral yet only 50 % do. The largest significant component of the difference in referral rates is culturally based perception differences of the variables used in determining the net benefit of providing a referral.
AgarwalS., AmrominG., Ben-DavidI., ChomsisengphetS., EvanoffD.D.Do financial counseling mandates improve mortgage choice and performance? Evidence from a legislative experiment. Working Paper Series. 2009.
2.
AjrouchK., AntonucciT., JanevicM.Social networks among Blacks and Whites: the interaction between race and age.J Gerontol Ser B: Psychol Sci Social Sci.2001; 56(2): S112.
3.
AlconA.Financial planning and the mature woman.J Financ Plann.1999; 12(2): 82–8.
4.
AltonjiJ.G., DoraszelskiU.The role of permanent income and demographics in black/white differences in wealth:National Bureau of Economic Research; 2001.
5.
AndersonE.Customer satisfaction and word of mouth.J Serv Res.1998; 1(1): 5.
6.
BansalH., VoyerP.Word-of-mouth processes within a services purchase decision context.J Serv Res.2000; 3(2): 166.
BrownJ., ReingenP.Social ties and word-of-mouth referral behavior.J Consum Res1987; 14(3): 350–62.
13.
ChangM.With a little help from my friends (and my financial planner).Social Forces.2005; 83(4): 1469–97.
14.
CharlesK., HurstE.The correlation of welath across generations:National Bureau of Economic Research; 2002.
15.
ChristiansenT., DeVaneyS.Antecedents of trust and commitment in the financial planner-client relationship.Financ Counsel Plann.1998; 9(2): 1–10.
16.
CornwellE., CornwellB.Access to expertise as a form of social capital: an examination of race-and class-based disparities in network ties to experts.Sociol Perspect.2008; 51(4): 853–76.
17.
DatcherL.The impact of informal networks on quit behavior.Rev Econ Stat.1983; 65(3): 491–95.
18.
DeVaneyS., AnongS., YangY.Asset ownership by black and white families.Financ Counsel Plann.2007; 18(1): 33–45.
19.
DevineT., KeiferN.The empirical status of job search theory.J Labor Econ.1993; 1(1): 3–24.
20.
DrenteaP., LavrakasP.Over the limit: the association among health, race and debt.Soc Sci Med.2000; 50(4): 517–29.
21.
DunhanD., JohnsonS., WilcoxJ., HarrellG.Influences on consumer use of word-of-mouth recommendation sources.J Acad Market Sci.1997; 25(4): 283–95.
22.
FairlieR.The absence of African-American owned business: an analysis of the dynamics of self-employment.J Lab Econ.1999; 17(1): 80–108.
23.
FischerR., GerhardtR.Investment mistakes of individual investors and the impact of financial advice.2007. 20th Australasian Finance & Banking Conference 2007 Paper. Available at SSRN: http//ssrn.com/abstract=1009196 (August 23, 2007).
24.
FrenzenJ., NakamotoK.Structure, cooperation, and the flow of market information.J Consum Res1993; 20(3): 360–75.
25.
GaleW.G., ScholzJ.K.Intergenerational transfers and the accumulation of wealth.J Econ Perspect.1994; 8(4): 145–60.
26.
GatignonH., RobertsonT.An exchange theory model of interpersonal communication.Adv Consum Res.1986; 13: 534–8.
27.
GittlemanM., WolffE.Racial differences in patterns of wealth accumulation.J Hum Resour.2004; 39(1): 193–227.
28.
GotliebJ., GrewalD., BrownS.Consumer satisfaction and perceived quality: complementary or divergent constructs?J Appl Psychol.1994; 79(6): 875.
29.
GrableJ., JooS.A further examination of financial help-seeking behavior.Financ Counsel Plann.2001; 12(1): 55–74.
30.
HammerM., GudykunstW.The influence of ethnicity and sex on social penetration in close friendships.J Black Stud.1987; 17(4): 418–37.
31.
HarrisA.The economic and educational state of Black Americans in the 21st Century: should we be optimistic or concerned?Rev Black Politic Econ2010; 37(3): 241–51.
32.
HarrisY., GorelickP., SamuelsP., BempongI.Why African Americans may not be participating in clinical trials.J Nat Med Assoc.1996; 88(10): 630.
33.
HaslemJ.The new reality of financial advisors and investors.J Invest.2010; 19(4): 23–30.
34.
HenrettaJ.Parental status and child's home ownership.Am Sociol Rev1984; 49(1): 131–40.
35.
HolzerH.Informal job search and Black youth unemployment.Am Econ Rev.1987; 77(3): 446–52.
36.
KatungiE., EdmeadesS., SmaleM.Gender, social capital, and information exchange in rural Uganda.J Int Dev.2008; 20: 35–52.
37.
KelleyH.H., ThibautJ.W.Interpersonal relations: a theory of interdependence.New York: Wiley;1978.
LovingA., FinkeM., SalterJ.Does home equity explain the black wealth gap?J Housing Built Environ2012; 27(4): 1–25.
41.
LusardiA., MitchellO.Financial literacy and retirement preparedness: evidence and implications for financial education.Bus Econ.2007; 42(1): 35–44.
42.
MarsdenP.Homogeneity in confiding relations.Soc Netw.1988; 10(1): 57–76.
43.
MarsdenM., ZickC.D., MayerR.N.The value of seeking financial advice.J Fam Econ Issues2011; 32(4): 1–19.
44.
MartinL.Debt to society: asset poverty and prisoner reentry.Rev Black Politic Econ2011; 38(2): 131–43.
45.
McKernanS., RatcliffeC., SimmsM., ZhangS.Do racial disparities in private transfers help explain the racial wealth gap?New evidence from longitudinal data.2011.
46.
MenchikP., JianakoplosN.Black-White wealth inequality: is inheritance the reason?Econ Inq.1997; 35(2): 428–42.
ShobeM., Page-AdamsD.Assets, future orientation, and well-being: exploring and extending Sherraden's framework.J Soc Soc Welf2001; 28: 109.
56.
ShortellS.Determinants of physician referral rates: an exchange theory approach.Med Care1974; 12(1): 13–31.
57.
ShumakerS., BrownellA.Toward a theory of social support: closing conceptual gaps.J Soc Issues.1984; 40(4): 11–36.
58.
TaylorJ., RogersJ.Relationship between cultural identity and exchange disposition.J Black Psychol.1993; 19(3): 248.
59.
TaylorR.J., ChattersL.M., HardisonC.B., RileyA.Informal social support networks and subjective well-being among African Americans.J Black Psychol.2001; 27(4): 439.
60.
Toussaint-ComeauM., RhineS.L.W., ChicagoF.R. B. o. Increasing participation in mainstream financial markets by black households.Adv Consum Interes.2001; 13(1/2): 24–9.
61.
WakilP.Explorations into the kin-networks of the Punjabi society: a preliminary statement.J Marriage Fam1970; 32(4): 700–7.
62.
WinchesterD., HustonS., FinkeM.Investor prudence and the role of financial advice.J Financ Serv Prof.2011; 67(4).
63.
WolffE.The stagnating fortunes of the middle class.Soc Philos Pol.2002; 19(01): 55–83.
ZinovievD., DuongV., ZhangH.A game theoretical approach to modeling information dissemination in social networks, in Proc. IMCCIC-2010, Vol. I, pp. 407–412, Orlando, FL, April 2010.
