Those are some of the results of a new survey commissioned by The Smiley Group and Nationwide, a major financial services company.

The survey found that African Americans are more likely than the general population to think their financial situation will improve in the next year, but few are taking the necessary steps to help themselves:

• Fewer than half reported being proactive about their financial future
• 3 in 4 do not have a written financial plan
• Nearly 1 in 3 don’t know where to start when it comes to financial planning
• 7 in 10 don’t think they need an investment professional (of those who don’t currently have one)

“It’s one thing to be positive, but it’s another to be practical, proactive and prepared to weather this difficult economic climate,” said Tavis Smiley. “This survey reveals the critical need for an honest assessment of our financial status so that we can be sure that we are taking the steps necessary to safeguard the future for ourselves, our families and the next generation.”

An opportunity for investment professionals
While a majority of African Americans (52 percent) are confident in their ability to make savings and investment decisions on their own, the survey highlights several areas where they may benefit from working with an investment professional.

“For many African Americans, there is clearly a disconnect between how financially prepared they think they are and how prepared they are in reality,” said Brad Davis, vice president of Nationwide Financial Services. “There are definitely some areas where they may need help, and it’s important for them to know that they don’t have to go it alone.”

According to Davis, the survey points to three key places where investment professionals may be able to help:

Balancing short-term financial needs with long-term goals

• The survey found that 64 percent of African Americans list either paying their rent/mortgage or paying monthly expenses as their most important financial goals (compared to 59 percent of the general population). However, only six percent of African Americans indicate that saving for retirement is their number one goal.
• Investment professionals may be able to help by providing financial strategies that allow clients to meet their short-term needs without sacrificing long-term savings goals such as retirement and saving for their children’s college education.

Improving financial literacy

• Only 11 percent of African Americans say they would go to an investment professional for help if they were having financial problems. However, 69 percent of those who do not currently have an investment professional say they would be interested in obtaining financial information from one (53 percent of the general population expressed the same interest).
• The survey shows that, in general, many African Americans are hungry to learn more about financial topics and seminars may be one of the most effective ways for investment professionals to reach this group (60 percent of African Americans say they would be open to this format compared to only 37 percent of the general population).

Helping facilitate family dialogue around finances

• The survey found that, similar to the general population, 33 percent of African Americans rank not having enough money as one of the topics they are least comfortable discussing with family members. Many also admit to taking actions to avoid the conversation, including screening calls, lying and even cutting off a relationship.
• There is an opportunity here for investment professionals to help guide family discussions around finances and ensure that everyone is on the same page.

“We’ve got to be a part of the national dialogue about how to get beyond this economic crisis,” adds Smiley. “The more we are all empowered with information, tools and resources, the more we all can contribute to making America as good as its promise.”

Nationwide has partnered with Tavis Smiley since 2008 to promote economic empowerment and financial literacy.

“Nationwide shares Tavis Smiley’s passion about empowering people with information and resources that can help them plan for a brighter future and protect what matters most to each household,” said Davis. “This study is encouraging because it says that, despite the economic downturn, there is a strong desire in many households to seek out guidance and information to overcome the immediate financial challenges and plan for long-term dreams like college and retirement.”

This national, online survey was conducted in January 2008 by the Blackstone Group. A web panel was used to collect national data for a total of 1,200 respondents split into two sample groups. General Population, ages 18+ (n=600) and African American, ages 18+ (n=600). The survey has a margin of error of +/- 4 percent.