Financial education critical when 'most relevant’: American College of Financial Services CEO

The American College of Financial Services President and CEO George Nichols joins Yahoo Finance Live to discuss offering financial education courses to college students and how financial service providers can build better relationships with Black communities.

Video Transcript

BRAD SMITH: And, everyone, switching gears here-- for the first time in its 95-year history, the American College of Financial Services launched a financial wellness consumer program. 19 HBCUs, or historically Black colleges and universities, they are part of the program. And the initiative seeks to add up to 25 HBCUs.

Joining us now with more is George Nichols, who is the president and CEO of the American College of Financial Services. Great to have you here with us today. First and foremost, let's talk about where this initiative is beginning and how it's getting involved within the HBCU programs, and particularly what drummed this up. Why is college the right time for this program and financial wellness consumer program to be inserted into that college experience?

GEORGE NICHOLS: Sure. First of all, thank you for having me. When we developed this program almost a year and a half ago, we created a new center for economic empowerment and equality. And the focus was, how do we help underserved communities on their journey for upward mobility and narrowing the wealth gap?

We wanted to start with Black America, given where the country was. And we created a program called Four Steps Forward. And in that, it was, how do we provide culturally relevant educational content for them to help them?

And one of the things that we found is in our research is most people start with the financial transactions. Well, how much money do you have? Our focus was let's go to college students who now have relevant financial decisions. Can I pay for my books? How am I going to eat? Am I going to go out and party over the weekend? What am I going to do when I get out of college and I have to pay off my student loans?

So now we have a point where people have relevance. But more importantly, we wanted to help them understand who they are, how they think and feel about money. Then we can actually help them with those major financial decisions as they go.

BRAD SMITH: And so I ask why college being the right time to add that program into either curriculum or as an add-on offering or service for so many collegiate students, because college itself is one of the largest investments that people are going to make into their education. And so where do you see this also having a role in the future, even at earlier points in education?

GEORGE NICHOLS: Yeah. You know, Brad, one of the things that you will find in this country is there is so much financial education and literacy material out there. I think the country's done a great job. The unfortunate thing is most people are not paying attention to it.

You really have to stop and think about when is it most relevant. And we have found that when you're getting ready to go to college or when you're in college, you do have to think about it. Am I going to be able to afford this? And whether I'm working with my parents or taking out loans on my own, now you are having to think about those decisions.

Well, also when you get in college, you have to make other decisions. You're going to be bombarded with credit card applications. You're going to be bombarded with things that you want to buy just to fit in on campus. Every one of those are really important touch points for you to make decisions.

If you don't know who you are, if you don't know how you think and feel about money, then you may make bad decisions that are only going to make a challenging situation worse. I'll tell you in my family-- I remember when I was growing up, you weren't allowed to ask my parents how much money they made. That was none of your business.

Well, it took me a long time to figure out, how do I feel about money? How do I think about it? What do I even know? And that was really the impetus about us creating this program.

BRAD SMITH: If you'd seen what I was wearing in college, I was hardly concerned about fitting in. I think you would just deduce from that. When we think about the numbers and the projections themselves, 15,000 juniors and seniors you're expecting to give out certificates to, and then what? How do we continue to track the narrowing of the wealth gap and the disparity?

GEORGE NICHOLS: Well, this is a self-paced virtual program. So what we do is we go to college campuses, HBCUs. We find ambassadors, people that are respected and trusted by their classmates. We train them, and then they go out and they train their classmates, their family members when they go back home.

And so the goal is that when the individuals are training, they, too, are coming in virtually. So we're actually going to be able to have information about them, and then we can push information back out to them so that we become that lifelong learning partner for them when they've got to make financial decisions, even about whether or not you want an advisor at some point in time.

But it's really about getting them in the system. And I want to share with you-- there's a couple of information that we've already been getting. We launched this about two weeks ago, and we've already had a young lady that says, you know what? I smoked cigarettes, and I've stopped, and now I want to get a savings account.

I had borrowed and bought a lot of stuff on Amazon, I'm sending it back and I'm going to make sure. I want to start an investment account. Well, as they make those decisions, the American College is there to be their partner with them to continue to answer questions and help them have a better feeling and understanding about their financial decisions and their values.

BRAD SMITH: George, while we have you, thinking about where there needs to be a better relationship, it's not just on the consumer side and who's the recipient of the services, it's the service that's being offered itself. Where have we seen improvements from some of the financial services players that have to have a closer relationship with multicultural consumers?

GEORGE NICHOLS: Yeah. Well, I think that as all of us were dealing with the national unrest, I really do think the financial services industry has been very, very focused on, how can it be more responsive and deliver the important things that the Black community needs? So one, awareness is there. They're putting forth efforts to do a lot more.

Many of them are partnering with the American College. I want to share with you just a little bit about a study we did on 3,500 Black middle class females across America. And what we learned is Black women play such a large role in financial decisions in the Black community.

So we wanted to focus our research on that. And I want to share just a couple of points that I think are relevant to the question you just asked. One is, Black females said, I want to trust the organization that I'm dealing with. Trust became a big issue-- not whether you're financially stable or how many ads you run, but trust.

The second component, though, was I want to see you in my community. I want to see you in my community advertising, partnering with Black-owned businesses and doing business with Black individuals. That is important. I want them to understand the linkage that in the Black community, it's important that not only I'm successful, my family has to be successful.

I want my community to be a part of that. And we believe that now, companies are listening. And they're trying to think about, how do we recruit more? How do we retain more? How do we partner with Black-owned banks? That is now coming out in play.