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Listen to this articleBy Evan C. Loving
Trevor Rozier-Byrd, Finance expert, founder and CEO of the fintech startup Stackwell Capital discusses underinvestment in the Black community and the future of Black wealth in the US.
Stackwell Capital is a digital investment platform striving to demystify the investment process and eradicate underinvestment within Black Communities. Founder and CEO Trevor Rozier-Byrd is a New Jersey native turned Boston transplant who began his career as a corporate transactional lawyer, focused on public and private securities. Before founding Stackwell Capital, Trevor held senior-level investment, finance strategy and business development positions at State Street Corporation. Now, he’s shifted his focus and passion to addressing what he views as one of the social justice issues of our time: the racial wealth gap.
Trevor will participate at The Finance Forum, presented by COLOR and Stackwell Capital. Sign up here and we’ll notify when the Forum is available on-demand.
Evan Cutts: Thank you for joining me for this interview. What can you tell us about Stackwell Capital?
Trevor Rozier-Byrd: At Stackwell, we believe that the racial wealth gap is the social justice issue of our time; it directly impacts every other material issue that we care about in the Black community. Think access to affordable healthcare, housing, quality education, food insecurity, issues, criminal justice reform, all of those things are directly impacted by a person’s access to capital or lack thereof. Stackwell is about being the conduit to the facilitation of these wealth-building conversations and the exchange of information such that we can better position more people within our community to achieve their long-term financial goals and objectives. If we can do that, I think that we will have greater autonomy, agency, power, and control to influence the things that matter to us.
Okay, great. I would love to hear you talk a little bit more about how Stackwell is working to eliminate the racial wealth gap.
When you look at the numbers and the history of the racial wealth gap, it paints a story that is getting worse with each passing generation. The data tells us that only about a third of Black families are invested in the market as compared to two-thirds of white families. There are a whole host of reasons, both systemic and otherwise, that have contributed to the existence of the racial wealth gap. At Stackwell, we’ve architected our solution to address and remove the social, emotional, and cultural barriers to entry that have resulted in under-investment in the black community.
Oftentimes people in our communities say “I simply don’t know where or how to start,” or they feel as though they lack a certain level of information or capital to begin the process. I know, based on my professional experience that many of those things could not be further from the truth. We aim to deliver a product that eradicates or demystifies many of those misperceptions.
For us, we’re delivering model investment portfolios to help get people started investing. Rather than downloading an app and having to decide between a universe of 10,000 listed securities, we’re making that decision for the user. For example, they to download the app, answer a series of investor suitability questions that will allow us to assess your risk profile tolerance and objectives over time. Then, based on our analysis of your answers, we’ll be able to point you to the portfolio that we think best serves your needs. From there, they make a monthly investment commitment of at least $10 and that’s it.
We aim to remove the stress and anxiety that comes along with making those decisions to make our app as accessible as possible. The investment minimum on our app is $10. We charge a $1 subscription fee, making Stackwell accessible to all people within our community up and down the income spectrum for people in the Black community. The other things that we do are we pair access to the markets and investments with financial literacy and investment education.
What inspired you to try to demystify the investment process?
It was a couple of different things. So, I was a political science and theology major in college; I had no business ending up in a finance career just on the basis of that alone. But my first job after college was at a law firm where I was supporting large fund sponsors that were bringing new products to the market. That experience was eye-opening for me and I wanted to understand how the markets actually operated and how to get involved.
At the same time, my best friends’ dad was a financial advisor and I was fortunate enough that he sat me down one night after work, and in an hour-long conversation explained to me the power of long-term passive investing. All it took for me was having somebody break it down and explain to me “Hey, I know this thing seems complex and hard to understand from the outside looking in, but you don’t have to make it any more difficult than it necessarily needs to be.”
What’s stopping us from going to the market and opening up a brokerage account and participating and getting the same access to returns as everybody else? The misperceptions I discussed earlier and systemic barriers have led us to feel as though the investment market is not a space for us. I do this because I believe more people in our community need to know that this is in fact a place that we should be in.
Thank you for sharing that. I think what is evident in your work is this through-line of empowerment and education. How does Stackwell differentiate from other digital investment platforms on the market today?
Yeah, we think about competition in two main ways: mainstream digital investment platforms and the Black affinity fintechs. As it relates to the mainstream investment platforms, we differentiate ourselves by architecting our solution to address and remove the social, emotional, and cultural barriers to entry that have resulted in under-investment in the black community. As it relates to the Black affinity fintechs, I believe we’re the only ones that are delivering sustainable investment solutions towards long-term wealth creation.
Now that said, based on our proprietary research, while there are a number of competitors in the market today, our actual biggest competitor is inaction on the part of the would-be consumers. So again, think about it like 65%+ of people in the Black community are not investing today. So how do we get them off the sidelines and into the market is really the question.
Well said. Moving our conversation backwards a little bit to the subject of mentorship, what do you know now that you wished you knew at the start of your career?
Wow. That is a…
It’s an oldie bit of goodie.
Yeah, it’s because there are so many things, right? The best piece of advice that I could give to somebody at any stage of their career is this: it is incumbent upon you to own your own career and your own outcomes. No one is going to be as invested in your future as you are. When I was able to learn that, it shifted my focus from trying to do anything other than acquire the skills that I felt were necessary to position myself for the opportunities that I wanted to have long-term.
Evan Cutts: That’s powerful. Really, locking in and honing in on your own vision for your future and the impact that you want to have. Can you tell us about Stackwell’s community involvement?
Community is actually everything for us; we are nothing without community. I think key to [solving] this problem is to break down barriers and normalize conversation in and around Black wealth. We can’t do that without the development of community and safe spaces where we can increase the flow of information around how this process actually works. We started a student ambassador program and currently have 25 college student-athletes across the country that have been activated in localized ways to have these conversations with their peer groups on their campuses.
Evan Cutts: What’s on the horizon for Stackwell? What should we be keeping an eye out for in the coming weeks and months?
Yeah. In the short term, there is going to be the full release of our app. We are currently in private beta testing with some early users just to make sure that the app is good to go and ready to bring on more people in our community. What I think you will see from us is continued engagement with the community and authentically showing up to be the support or the guide that people need to navigate the process of getting into the market. We’ll do that across a number of different dimensions and our goal and objective is to meet people where they are at within our community to bridge the trust gap that currently exists between them and banking and financial institutions in this country. We are focused on earning their trust by delivering products in honest and transparent ways that can help people build wealth over time.
