White Advantage,
Systemic Inequality,
and the Paths to Change
Stephen Dorsey delves deeper into racial discourse through conversations with insightful guests who have their own take on what’s at play. Because it’s time to Be Better, Do Better, Live Better, Together. Presented by Flatiron Wealth Management.
Andrew Sheppard
| S:2 E:3On this episode of Black & White, we welcome the CEO of Flatiron Wealth Management and Stephen's longtime personal friend and advisor Andrew Sheppard. Their discussion touches on the wealth gap, Andrew's background and history in East Asia, and much more.
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Stephen:
Hello, welcome back to Black and White, a rallying place where we come together to learn and hold everyone gently to account. A podcast for the ally in all of us. I'm your host, Stephen Dorsey. Black and White is recorded in Toronto, Canada, on the traditional territory of many nations, including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, and the Haudenosaunee and the Wendat peoples, and now home to many diverse First Nations, Inuit, and Métis peoples. My guest today is my friend and trusted financial advisor, Andrew Sheppard. Andrew is the managing partner of Flatiron Wealth Management, a truly independent wealth management firm based here in Toronto and operating in the US and Canada.
Now, I met Andrew more than 10 years ago when I realized I needed some financial advice and some direction, and Andrew and his team at Flatiron helped me set a course for a better financial future. One of the first things I said to Andrew is that my priority was focused on my young children and how I could set them up for future success by creating conditions for generational wealth, mostly foreign concept for my family going back generations. More recently in the past couple years, I sought Andrew's expertise as an advisor when I was writing my book Black and White, specifically to add perspective on the realities of generational wealth and the wealth gap that exists between BIPOC and non-BIPOC communities in North America, which I was researching and writing about in my book.
Through many discussions, Andrew helped me flesh out my ideas for action that could begin to remedy the generational wealth gap, a huge disadvantage for BIPOC people in our society. We'll get into that and more during our conversation today. You can't see him of course, but take my word for it, Andrew is a tall, good looking white man who also happens to be married to an Asian Canadian originally from New Zealand, Mun Chau, who is also a key contributor at Flatiron Wealth Management, and Andrew is also the proud father of three biracial children. We've discussed his family reality many times, especially in the past couple of years, and thought you'd benefit from his personal experience and perspective. Lots of ground to cover today, so let's get into this. Welcome to Black and White Andrew.
Andrew:
Thank you very much, Stephen. I sincerely appreciate you slipping handsome into the intro. That is... made my day. Let's do this.
Stephen:
I try and help my friends. I really wanted to take the time to say thank you to Andrew and the entire team at Flatiron for walking your walk, if you will, when it comes to demonstrating a commitment to diversity, equity, and inclusion, starting with sponsoring this podcast. And your support is allowing us to essentially have season two of Black and White and to continue our important conversations about historical and current truths and the important changes that need to happen to eliminate systemic racism in our society. So again, a big thank you to you, Andrew, and your team.
Andrew:
Yeah, that's great. We're very, very happy to be a part of helping to promote the conversations that you're having.
Stephen:
Amazing. So let's start on the personal front. As I mentioned Andrew's a white guy, I did say he was handsome, and for as long as I've known him, which is over 10 years now, he's someone that's always been upfront with his personal understanding of the privilege, or the advantage as I like to call it, that he's inherited simply because of his whiteness. Not to diminish Andrew's accomplishment as he's an extremely hard worker and he's really had a lot of successes that he's earned for himself. What I want to ask you, Andrew, to start from your own perspective on your lived realities around white advantage, perhaps we can look at it, George Floyd and post George Floyd, because there's been a big global reckoning, tell me from your perspective, when we talk about white advantage, and some people call it white privilege, what do you think about that? How do you see yourself within that context?
Andrew:
In preparing to come on to the podcast, obviously this is the central conversation that I thought that we would be having, so I put a lot of thought into it. It's a fairly new concept for me and it's a topic I've had to have conversations with friends about people who are more involved in the DEI space, in particular, my best friend, Mira Gambhir, who's got a PhD and she's operating in that space. She's very generous with her time and her thoughts around it.
And in thinking back, just kind of to recognize, there's a few things that I feel like I have had throughout my life. When you talk about an advantage, it's more things that I just don't have to think about. So growing up in Toronto, in Canada and being white, I never had to think about my whiteness. It was never something that came up. It was never something that I ever thought I would ever have to explain or make an excuse for, and I never saw it as a barrier. And then when I was 15, all of a sudden I was like six foot five. So that's another advantage for sure as far as being a tall man, tall white man walking into a room and never having to even consider those attributes to be anything other than a benefit for me.
Stephen:
Which is interesting by the way, because I'm six foot three and I can tell you walking in the room as a six foot three Black man, there is a reaction.
Andrew:
Right.
Stephen:
I've noticed all kinds of reactions. I'm not always saying negative, but I've seen people's reactions where they've kind of been surprised, because usually I'm the first or the only. Some people, maybe not so much in a boardroom, but walking down the street, I've seen some people who seem maybe a little bit frightened. So it's interesting.
Andrew:
Yeah. It's something that I'm aware of too, though. If I get into an elevator, to be honest with you, I'm very aware of the other person in that elevator, especially if it's a woman, just to make sure that I'm giving space and I'm as disarming as possible. So that's stuff that I'm aware of. But also when I walk into a room, I have no problem holding court and kind of establishing myself as an authority or somebody who has a joke to tell, and that's just something that comes very naturally to me. Having said that, I do have an experience of traveling outside of Canada. So I lived in different countries. In 1997, I went to Korea, I lived in Korea for a year, and that was crazy. And it was the first time that I was not... my being white and being tall... actually, I was just standing out and I was-
Stephen:
You were a giant.
Andrew:
I was a giant. And I mean would literally get groups of men walking down the street and they would stop me and they would say, "What is your fighting style?" This was a literal thing that happened to me while I was living in Korea, and I was like, "My fighting style?" I have no idea how to answer this.
Stephen:
That's funny.
Andrew:
But it was the first time when I landed and it was really like, "Oh wow, well, everybody's Korean and everything's in Korean and none of the rules that I was taught as a child matter here." They really just don't, they don't apply. And then from there I went to Taiwan and I was in Taiwan for nine years, and again... I mean I was hired to teach English and so my whiteness, you could say was an advantage because I was getting paid pretty well just to teach English. But at the same time, I mean, I wasn't part of the culture, I was always outside of it and just knowing that if I ever got into trouble that I didn't really have much of a leg to stand on. And then the next experience after that was I lived in a village of about three to four million people in China.
Stephen:
A village?
Andrew:
Yeah, exactly. And they didn't even speak Mandarin there. In living in Taiwan, I had studied Mandarin. So I have a ever decreasing amount of Mandarin that I'm able to speak. But when I went to [inaudible 00:07:25], which is a city just north of Shanghai, they didn't even speak Mandarin, and I was the only... I was by far the first time they'd ever seen a white dude. So they would hold their babies up and be like, "Look at this freak," right in my face. And they would gather and I was like, "Wow." So I've had experiences where my whiteness was completely mooted where there was not, and especially in China, I knew that if I ever got into trouble, if there was ever a dispute that it was never going to go my way.
Stephen:
Interesting.
Andrew:
That was... they knew where I was at all times, I was paraded around, and now I was making decent money, but it came with that price of just knowing that if anything ever happened, it was never going to go my way. And then I decided that that was not where I was going to build my life. I came back to Canada for a whole list of reasons.
Stephen:
Well interesting that you're describing the experience of Black people, people of color, Indigenous people in terms of always being the other in a white society. But you had a choice to leave, in some ways, to a place where you're back in the majority and feeling not threatened because simply of the color of your skin.
Andrew:
Yep.
Stephen:
Very interesting. So how do you see it here in Canada that you've made your life here in your family, you're a professional, you've done quite well, and then of course now we have this global reckoning on race. How's that informed your perspective on privilege, or white advantage as we've discussed?
Andrew:
Yeah, I think that... so my wife, Mun, who you've already mentioned, she's Chinese, she's Malaysian Chinese, she was born in Liverpool, so she's got that UK passport, and then she lived in Malaysia for a while and then she lived in New Zealand, so she considers herself a Kiwi. And her whole side of the family is Chinese. So my children have GaGa, who's my mom, and then they have Waipo who is her mother. And we've had these conversations with them just to understand being biracial, how do you feel, who do you identify with? It hasn't necessarily come up coming from them, meaning their peers haven't brought it up, it hasn't been a conversation at all, but we've just brought it up and they have a complete comfort around the idea that they've got Chinese and they have... they're white and they're Canadian and Kiwi, they see themselves as being all of these things all at once.
And there's no gap between Waipo and GaGa. And not only that, but looking at their peers and their classes. One of my favorite things is to drop my youngest son who's four years old every morning off at kindergarten and just seeing his class and it is diverse. There's legitimate diversity in his class. And so those are the things that are in my day to day that I see. And so then trying to reconcile that with other conversations is interesting because I don't necessarily see it, but then sometimes it takes a friend to point out that that's a privileged point of view.
Stephen:
Yeah. And also that you're the head of a biracial family, and we know that especially with COVID, there was this big backlash and basically increase in hate crimes against Asian Americans and Canadians. Of course the dumbass former president in the US calling it the China virus.
Andrew:
The China virus, yeah.
Stephen:
And I've talked to Asian Canadians about that and they told me there were moments where they felt threatened walking down the street and how people looked at them and talked to them and what they saw in the news and the higher level of occasions of violence. Did Mun ever talk about that? Did that make you worry about your children or that's something that didn't even touch your family?
Andrew:
In all honesty, that in particular didn't touch our family at all, and I don't know if it's just because of COVID, we were all staying inside. It was around a time when we weren't out and about that much to be honest with you. But I asked Mun about this, because I wanted to know, "Was there any impact or did you see any evidence of it?" And she shared with me, it wasn't that specifically, but she has definitely experienced pushback since moving to Canada. For example, when my kids were younger, they looked white. To somebody walking down the street, they wouldn't necessarily know they were biracial. So the amount of time she was mistaken for the nanny and having specifically white women, just to be honest with you, every single incident was a white woman coming up and yelling at her, screaming at her on the street because the children didn't have gloves on and, "It was too cold and you don't know how to take care of this baby."
Stephen:
Oh my god.
Andrew:
And it was something that she was like, "What is going on? This is my child." Not only that, I mean it was something stupid like she was literally taking the gloves off to wipe their hands, you know what I mean? It was none of this person's business, obviously. My wife was not doing anything incorrectly, but like the confidence to insert themselves into a situation that they had nothing to do with. And then other things like where she's at the gas station and she's nine months pregnant and it was an older white man behind her just screaming at her, "She takes too long, she doesn't know what she's doing, get back in your car." And she's just like, "What the hell is going on?" So those things she's sharing with me. And I was like, "Yeah, I see that." So you know what I mean?
Stephen:
Well, I know what you mean because like you my children look white. So I live in the west end of Toronto and when they were little, same thing happened to me, they thought I was the Manny and they're kind of looking at me pushing my kid and looking at me like, "Who is this guy? Should he have this baby? Is he taking care of it properly?" So it's really interesting the perspective. I mean, my neighborhood is primarily white, so I hear her, I know exactly what she's related to. And this is again, back to most white people don't have to think about it or have people impose on them.
Andrew:
Yeah. And just speaking to that, the last point is that it's so different when I'm with her, and when people don't think I'm with her and then I turn around and I am with her and all of a sudden the tone changes. Somebody comes to the door being very aggressive with her, and then I'm like, "Oh, how can I help you?" And I have confidence, tall white man, so I'm protecting my home.
Stephen:
Of course, of course.
Andrew:
And it's instant, the reaction is instant.
Stephen:
What have been the conversations you've had with your friends and neighbors and your community in regards to the issue of race and systemic racism as a biracial family and others who are not? What are people talking about in your circles and do you find there's polarization? I'm curious as to your personal experience in this, I guess we're heading towards the third year, of this global reckoning since the murder of George Floyd. What has been your experience over the last two years having these conversations with the people in your sphere?
Andrew:
So I would divide into three different kind of spaces where the conversations would happen. One would be professionally, because I'm the managing partner of a firm and we are going to be one of the largest firms in Canada and we understand that there's a responsibility that comes with that, to be leaders in this space and to be aware of it and conscious and representative of the direction that the population is heading. I mean, it would be silly just to not acknowledge that and make sure that we're prepared for that and that we're addressing it. So that's one space. The other would be, I mentioned Mira already, my best friend, and she's in the space and she's articulate and she's generous with her time, and so the conversations I have with her are a little bit more specific and focused.
But then the other would be just with general friends. And I'll be honest with you, starting with that, it's just not coming up in conversation that much. Meaning, I mean, it's horrible, the stories are horrible and you hear it in the news and you're like, "Oh my, my God, that is just brutal." And then it's... so it's like then to have those conversations with friends, it's almost like opening up a can of worms I guess, that nobody wants to open up. And then it's like, "Okay, well where do we go from here once it's open?" And then, I don't know. I don't know. It hasn't been happening, I would say, in general with friends where we're talking about these issues specifically.
Stephen:
Yeah. I like the, "I don't know," because I'm hearing that a lot and I think that was one of the... I guess the objectives of writing my book Black and White, which was to be prescriptive in some ways, which is going to lead us. And I want to touch more about the professional side, but one of the things that I want to pivot to now is one of the things that we've talked a lot about is the wealth gap between BIPOC and non-BIPOC people. And really it comes down to generational wealth, which you've been talking to me about this for the last 10 years.
One of the things when I was doing the research for my book that just struck me as crazy, but the reality is that in the next 25 years, there's going to be $63 trillion, this is a US number, so ours apparently... add a few zeros there, but $63 trillion will be passed on through generational wealth from one generation to another. And out of that, less than 3% to Black communities. Imagine that. It's crazy. So we're going to talk about that a little bit more. We're going to talk about why. We're going to talk about the impacts of generational wealth. And then we're also going to talk about some ideas that you and I have discussed over the last couple years that I think are quite interesting. So we'll come back with Andrew after the break.
Andrew:
Great.
Stephen:
Welcome back to Black and White. I'm Stephen Dorsey, your host. I'm here with my guest Andrew Sheppard, managing partner at Flatiron Wealth Management. Andrew, we're having a good conversation. I knew this would be good. We're really getting into it. Before the break, we were just talking about the generational wealth gap between BIPOC and non-BIPOC people in North America. It's huge. There's a stat... I was speaking to a group a couple months ago and I was saying to them that if nothing changed, everything, the status quo stayed the same, it would take something like 263 years to narrow that gap. You know what 263 years means? Never. It's like... So we have to do something about it.
But first, let's go back a little bit because one of the things that I think is important to do, and really this is part of my learnings from Indigenous people, is when we talk about truth and reconciliation, and we were just talking about Manny Jules, he was the former chief of the Kamloops First Nation. I said to him, "What does truth and reconciliation actually mean?" He goes, "Before you can reconcile, you have to acknowledge the truths." And I think, you were saying, we don't know what to do or we don't know, we don't want to have those conversations relating to another, but this is it. We need to go look at the truths. We need to understand the truths. If you're not aware of them, you need to become aware of them, want to be aware of them, and then come to an understanding, and then acknowledge them and then try and reconcile around those.
That's before you even get to the action to rectify the issues that we're talking about. One of the things I was... I'm just reading a lot of books right now, and one of the authors is Andrew Hunter and his book is called It Was Dark There All the Time, and he's really done a lot of study about enslavement in upstate New York and Southern Ontario in the 19th century, prior to slavery being abolished, and into that period. And one of the things that he was looking at was talking about, he calls it the racial wealth gap, we call it... I'm calling it the generational wealth gap. And he was talking about, you've probably heard of this, when President Lincoln was emancipating Black people, general Sherman actually had a bill or something of that, and basically it was that every formally enslaved Black person would get 40 acres and a mule. You're probably familiar with that term. And essentially that was... after Lincoln was killed, they basically set that aside.
And one of the things that's really interesting, because we were talking just earlier about this $63 trillion of generation wealth. So in that he talks about, and he says if they had gone through with it, Black people at that time in 1865 and after, it would've equaled close to $800 billion, of 1865 dollars. Imagine... I did the calculations, went into my little Google calculator, future value, and that would be close to $14 trillion today. Imagine that. Imagine what a different world that would be for Black people, and I assume people of color. Instead, Andrew, they didn't get that. Instead, the US government actually compensated slave owners $300 per slave, and then we know about all the other stuff. So we're talking about millions of Black people who had nothing because they were slaves, they didn't even have their own names, no culture. This is all the way back through the centuries and all the way up to now, Black people and people of color, Indigenous people were really left out of professional roles. They couldn't become doctors and lawyers.
And this is until the mid '60s of the 20th century. So just giving a little bit of context. And so what I want to talk about is this generational wealth gap and just give some context about that. So today, how do we remedy this? Because we know that the generational wealth gap has lots of implications. Tell me, traditionally when we look at creating generational wealth, what are the basics there and what is it that obviously firms like yourself do? Investing in financial planning was not something that even was discussed because it wasn't really part of the reality. So tell me a little bit about this generational wealth and how it's created, why it's important, and why we need to be looking at that as one of the remedies for systemic inequality.
Andrew:
Okay. Yeah, that was a lot.
Stephen:
Yes.
Andrew:
Okay. So to try to unpack what we do and the way that we would approach this generational wealth gap, and this all started with a conversation that we had where you just asked me, "What are your thoughts on this?" And this is my lens, this is my expertise, this is what I spend most of my day thinking about for my clients and just in general. And so as a certified financial planner, there are six areas that we take a look at when we're working with clients, and we want to be able to address those with every client. This is how we're creating wealth and we're finding efficiencies and we're essentially creating that generational wealth for them and their families.
So the first is financial management. So it's understanding how cash flow works, how debt works, having a literacy about it and making sure you're as efficient as possible so you're not bleeding out all of your money to fees and to just inefficiencies and not making smart decisions. That's a really important starting place. Making sure that you have wills and powers of attorney in place. These are just things to make sure that your family is taken care of. And if you don't have them, the rest of the planning is somewhat moot because I mean the plan goes beyond everybody sitting at the table. That's always something that we talk about.
And then the next thing is insurance. So the acronym that we use is FIITRE, F-I-I-T-R-E, that was when I was studying for my financial planning. So you want to be FIITRE after you've done it, that's what they used. Anyway, it's stuck so I guess it was effective. So the two Is, the first is insurance and next is investment. But insurance comes before investment because that's your risk protection, meaning number one, I want to make sure you never run out of money, but I also want to make sure that even if you get sick or hurt or you die, that you're going to be okay if you're sick or hurt, but also your family's going to be okay. Cause that is one of the biggest risks, especially if you're the main earner or just kind of relating this back, looking at some statistics that Catalyst put out, just looking at the average wage, people of color versus white and specifically women of color, 58.7% of all men that their average salary is, that's where it's sitting.
Stephen:
Versus white men?
Andrew:
Well all men.
Stephen:
All men, really? Interesting.
Andrew:
Yeah. Men of color is 79.2%.
Stephen:
Yes, yes, yes.
Andrew:
So no matter what we talk about, whenever I was looking up statistics so that I could understand what we were talking about, I wanted to make sure that I had an understanding of really what we're addressing, and every single one, regardless of who was doing it and what area it was people of color, there was a gap as far as earnings and wages, but women of color were always significantly less, almost equal... It's almost an equal jump down.
Stephen:
Yeah, it's crazy.
Andrew:
I mean if it's 80% for men of color, then it's like 68... it's another 20% drop. So without getting into that, because I don't know meaning that... the reason why that gap exists and how to address that specifically. What it does tell me is that they're the most vulnerable people. If something ever happens to them or if a partner passes away, or especially single mothers of color, are clearly the most vulnerable just based on that statistic.
Stephen:
Completely disadvantaged.
Andrew:
Yeah. So again, this is where that risk protection becomes really important for them and the success of their family.
Stephen:
And that's interesting because that is actually one of the first places we started together. We were talking about my children and we were talking about investing starting with their educational fund, and then you said to me, "And then we should get them insurance." I said, "What are you talking about?" So could we just touch on that a little bit? Because I had never heard of this before of actually getting insurance for young children and explain that to me because...
Andrew:
Sure. And this was something that I knew nothing about. I certainly was... first of all, insurance isn't that sexy of a topic, and then when I ended up getting into the industry, coming out of my MBA and deciding that I wanted to join a firm where essentially we're selling insurance and mutual funds, this was all a new concept to me, but this was probably the most attractive strategy that I saw for insurance. And I immediately did it for all my children as they were born. So I believe that when I sold you the first policy, I pulled out, Thea, my oldest daughter, I pulled out her policy to say, "This is what I'm telling you I think every single parent should do."
And so the idea is that you can have a whole permanent life assurance policy and one of the benefits, and it's called a participating policy, so you're participating in an investment pool that the insurance company is administering on behalf of all the owners of the policies. What it does is it issues a dividend, which is then used to buy more insurance inside of the policy. So it's all inside of the tax sheltering of the insurance policy. And it's a feedback loop in the way that the more dividends you earn, the more insurance you're able to buy, which means your dividend gets higher, which means you buy more insurance. So it has this positive tax-free feedback loop and it gives you some significant benefits if you own this policy. The first is that it ends up becoming an asset that you can borrow against, you can use it the same as collateral the same way that you use your house, except that you're able to use up to 90%.
Stephen:
Right. So you can borrow from it, as we talked before, you can borrow it by the time your kids need to go to school. They can borrow some of it to go to college or university. They can borrow if they maybe to help with part of the down payment on a home or if they're starting a business, et cetera.
Andrew:
Yeah. Yeah, exactly. So you have this completely separate asset that is growing and every year that new amount is locked in, so it's not volatile like other investments, and you have a certain amount that you're able to use as leverage to borrow against. So it's a completely separate asset. So it's very powerful.
Stephen:
And then the kicker is it's an insurance product. So the kids have, after 20 years, I believe, they have life insurance.
Andrew:
Well they have life insurance from day one, but when you're buying this insurance for children, you can pay... like $250 a month is what I'm paying for each of my children, give or take, because it kept getting more expensive, so I had to keep upping it to make it equal. But let's just use $250, so I'm only paying that per month for 20 years. So in total I'm putting $60,000 into this over a 20 year period. But my children from day one have life insurance that is growing and growing and growing and by the time they're 80 years old, it's worth something like $5 million of life insurance. And then if they live to a hundred, which is definitely possible, I have three clients right now who are over the age of 100. So this is a trend that is happening.
Stephen:
Yes of course.
Andrew:
It gets exponentially higher to $7 million, $8 million. So the other aspect of it is that there's the opportunity to potentially take dividends out of it at some point where it's generating dividends and you're not buying more insurance, but you're taking it as supplemental income. So there's three different really, really strong attributes to this.
Stephen:
So just before we leave, so let's say, and I hope so, both my children are healthy, they live to a hundred, they pass away, they have children and grandchildren by this time, probably, so when they pass this life insurance policy pays off and now they're essentially passing on the five plus million dollars-
Andrew:
Tax free.
Stephen:
Tax free. So this is... I'm telling you Andrew, and I know I told you this, I'd never heard of this before. So this is why this is so important, and this is where we're going to go later, but talking about the accessibility of these kinds of ideas and programs.
Andrew:
Yeah.
Stephen:
All right, keep going. I want to hear about... because you were only on point three.
Andrew:
Yeah, actually that was point two, insurance. So the next one is investments, and so that's just having a comfort level with understanding what an investment portfolio should look like and having some basic language, but ultimately working with a professional who can help you with that to kind of guide you with that mostly just not make stupid mistakes. But then after that, the T is for tax planning, and so for me that is actually the thing that I focus... that's where I focus most of my time on is making sure that you're being smart. We all pay taxes and we all are very... we're part of this together and we all are paying into it. But you don't have to be sloppy with the way that you pay your taxes.
Stephen:
Sure, of course.
Andrew:
There are opportunities out there and you should be able to take advantage of them. And if there are ways that you're able to set up your cash flow or the way you're able to take income, I want my clients to be able to take advantage of those. So tax planning is really important. And then the R is for retirement planning. So making sure what is the goal? What does that look like? How are we going to make that happen and how are we going to make sure that when you retire, this is not your number one stress? You are not worried that someday you're going to be eating cat food. That sort of piece of mind leads to a huge amount of quality of life.
But also what do you want to do? Do you want to help other people out or do you want to golf your brains out? What is it? Let's find-
Stephen:
Travel, whatever.
Andrew:
Yeah, let's write it down and let's give it a budget and let's make sure you can enjoy that. And then the E on the end is estate planning. Often when we run our financial plans, when we come up to the estate report, this is usually the most shocking for most people. There's two reasons. Number one is through the process of going through the planning, most people cannot believe the amount of money that their estate is going to be worth. We're talking it's not uncommon for multiples of millions of dollars to be passed on through the work that we're doing with them.
Stephen:
Amazing. So this is kind of my learnings over the years working with you and having a great relationship and you've really structured that for me and my family. Getting back, we were talking about this insurance product and $250 a year and we talked about all that. So when I came back to you, I said, "You know what you're doing for me and my family and I wonder how could we do that for marginalized communities, people who have been disadvantaged, Black people, people of color, Indigenous people?" And I was specifically looking at over the decade, there's been lots of talk about, especially in the United States for reparations to Black people because of slavery and discrimination for over 400 years. There's been a lot of pushback as well and people saying, "I wasn't there. Why is it my fault?" And things like that. But Canada and the US has paid reparations directly to individuals. But my thinking was that can be complicated, it can be convoluted, it can be... I think the general population may be more defensive in regards to-
Andrew:
It becomes political.
Stephen:
Yeah political and all that. And so I remember calling you and saying, "Listen, let's just start with this investment part and the insurance." And I said, "How could we do that?" And we were talking about, and I wrote about this in my book and you and I were kind of fleshed it out a little bit thinking instead of reparations and sending out checks to people, we created a fund, like an impact fund, that would be initially populated, fueled by funds from the government from different... and significantly, and then we took that and managed it like a pension fund if you will.
But specifically around this insurance initiative that you've just described and the other things around it, investments and all that. And then we could have tiered approaches of different families from marginalized communities, some who can't afford to make any payments to buy the monthly insurance policy, some who could pay a little bit, some who pay more. But really having a diverse group and then slowly funding that. And as you were saying, eventually once you get to a critical mass, you start actually generating your own revenues through dividends, and of course that the fund grows because it's been invested... it's been managed properly. But that's what really got me excited. And so I guess my question to you is, can you share a little bit more with us how the mechanics of that could possibly work?
Andrew:
Yeah, we did have that conversation and it really was like how would we ideally be able to just expand this exactly what I do every day for my clients, but specifically target a certain segment? The idea would be if, as you said, if you were able to have an investment pool that was able to generate a return that had a critical mass that could feed into it, then from my point of view, the idea would be to be able to purchase insurance policies for people in certain communities. And then number one, it would start to mitigate that risk that they're exposed to. So that right from day one, it's like a leveling of that risk that they're exposed to. And it does provide a lot of comfort to somebody knowing that if something happens to them that their family's going to be taken care of.
Stephen:
Absolutely.
Andrew:
So I think that just right off the bat is something that... and it's not political. The other thing too is that's not my realm. I'm not trying to be political and I'm not trying to solve problems in that space. It's really applying skills and techniques in order to increase the wealth of a group, of an individual or a group of individuals. So having the insurance in place. And then also I think another really important part of the strategy like this working is buy-in from the community. Meaning it needs to be people from the community who have the understanding and ultimately are running it and creating a feedback loop in that way as well.
Meaning this is financial management, this is an area that is beneficial for a group of individuals to understand, especially the way that it works in Canada, like specific... or in the States, if that's where you are, and specific to your region. But there are specifics that you need to understand in order to take advantage of the opportunities that are out there. And they're available to everybody, but it's a lack of understanding and maybe it's just a lack of not really being that interested because you have other things that you're worried about in the day.
Stephen:
Well, there are organizations like the Black Business Professionals Association, they work with people on financial literacy for those who are entrepreneurs or wanting to start their business. And Ross Cadastre, who's the president on the board there, he was saying you have a lot of entrepreneurs or people that go, "Everyone loves my food, we love your jerk chicken, we love your fricassee chicken," and so they go, "We should start a restaurant," and they start a little place and they get going and then they realize they don't have any other part of the business. They don't understand costing, they don't understand inventory management and all the things that goes into a successful growing and scaling business. So this is just another financial management, which for many people, myself admittedly, I didn't even pay attention to for decades of my life. So I get it.
Andrew:
Again, our relationship with money and financial management, you think about it, if you get married and you have a partner, then each of you are coming with a completely different ideas and views about it, which are coming from both of your parents, each of you, so we're talking about four grandparents potentially that have shared their feelings about it. So it becomes very complicated very quickly. But I think that this is a space that I have seen a lot of the initiatives as far as providing support for people in the BIPOC community, having education around how to operate in the sea level. I think it was a Black North initiative has, specifically Black North academy, and I think that's fantastic, but I haven't seen anything specifically for this area where there are scholarships and mentoring and internships specifically to have people from the BIPOC community enter the industry and have the expertise so that they are able to connect with their own community.
Stephen:
So it seems to me that the idea of this impact fund driven by an insurance kind of system, proper management, being able to bring more families into the [inaudible 00:37:36] building at critical mass, obviously funded by the federal government or provincial governments, all sources of government. And then eventually you have a hundred families, 500 families, a thousand families. There's a way that they're also participating to give back to the... possibly in terms of not taking all of the dividends out. Maybe some of them go back to the fund. Whatever, all kinds. We played around a lot of different ideas. And then you were saying well eventually you're creating this investment fund that now you can do other things, not only in terms of be able to even create a bank, if you will. I think you mentioned that.
Andrew:
Yeah. I mean I don't know specifically, because we're getting into different areas that are under different regulators.
Stephen:
Yes, exactly.
Andrew:
So without getting into how big this could get, I think that really the fundamental idea would be to have a critical mass of wealth that was generating enough to finance this basic risk protection. Then having [inaudible 00:38:38] and education opportunities and internship so that people from the community are able to ultimately take over and run it and manage it honestly, and have that direction and be able to connect with the community.
And what's important about that for me is that whatever we create, wherever we're going with this, whatever manifests, I think it's really important that it's portable and it can be dropped in any community and it can be... it'll ultimately be a template for any community that feels like this would be of benefit to them. It's a template. It's like you can do it. This is what it takes, this is how we would implement it, and then it's theirs to be able to run. So you could target... even people who are coming in, like immigrants to Canada, refugees who are coming in, they're severely disadvantaged from day one. How are they going to get caught up so that they are participating in Canadian society the way we all want them to, obviously. We all want them to. There's no way that we want one segment of society to not participate and not be productive and not be able to succeed here. We all want this.
Stephen:
And to get there faster, refugees do very well in Canada. Many open their own business, that are mostly all employed within 10 years. It's actually a great success story, but imagine accelerating that.
Andrew:
Just having... well, yeah why would we not provide something so that if there was buy-in and we had the resources set up and there was a pathway that we're saying, "Yeah, this is how you can get there."
Stephen:
And I like the fact that it's, and I say not complicated, it's pretty by the numbers.
Andrew:
Yeah. It's not...
Stephen:
And it's like... obviously every investment fund goes up and down, but essentially the mechanisms of it already work. We're not reinventing the wheel here.
Andrew:
Nothing.
Stephen:
Exactly.
Andrew:
Yeah, absolutely. It's just simply starting to implement it. That really is it. And it doesn't really take much sign off. It's just as far as there needs to be buy-in and there needs to be assets. I mean when we're starting anything there needs to be assets for us to work with.
Stephen:
Well this is my point. This is where again what's better, sending $20,000 check to individuals or building a fund for communities?
Andrew:
Yeah. It has a massive feedback loop if that investment was going to be made, especially if there was the idea of being able to provide investment for generational wealth for certain communities, for children, that $60,000 over, I mean the child benefit, whatever that is, it's $250 a month going into this policy.
Stephen:
Exactly.
Andrew:
That is going to have a massive amplified effect the next generation of Canadians.
Stephen:
Transformative. Transformative. I agree. You touched on it just a few minutes ago, but the other part that we had talked about is the financial sector, financial literacy, and all that stuff. I want to read this to you because it's really important and it just blew me away. Only 63 out of 1,050 Black lawyers in Ontario, which represents only 6%, so the 1,050 Black lawyers represents 6% of all lawyers, were partners. So only 63. That's only 0.2% of all lawyers in the province. Conversely, 18% of white lawyers, 4,800 out of nearly 27,000, were partners.
This highlights two concurrent issues in the legal field in Ontario, a general lack of diversity and inequality in leadership positions. So we're talking about the Black North Initiative, Wes Hall, specifically talking about representation in C-suite and on boards. But you and I talked about your firm, I'm always very impressed by the goals that you've stated for your business and you've achieved them and you're going towards that direction. So I'm glad I'm part of the Flatiron family if you will. But now that you're the managing partner, you're building this, growing and scaling this team, how do you see diversity and equality and inclusion, equity manifesting itself within the financial wealth management sector, the industry as a whole and specifically in your organization?
Andrew:
Yeah, that's great. So there's two sides that I'd want to touch on on this. One about our firm and the staff and the team that we're putting together and one about the clients coming through the door. So I think that both of those are interesting for us to see because we had the conversation about this, and number one is that we see far more diversity in the new clients coming on than there ever has been. It's a noticeable difference. I've been doing this about 15 years and just a massive shift towards more members of the BIPOC community seeking out advice and wanting to understand how to work within the system and how to benefit and how to work with somebody who can help them to address all the issues that we talked about earlier.
Stephen:
And what do you think is the driver of that?
Andrew:
I don't know. I don't if it's because they're more... a lot of them are second generation Canadians, so they grew up in Canada and they have a comfort level with it. And so business as usual for them.
Stephen:
Got it.
Andrew:
It's not as foreign of an idea to trust somebody to come down and give them advice and follow their advice and say like, "Yeah, I'm trusting you." It's a big deal. It's just happening, which is really interesting for us. And we had that conversation to say, "Wow, that is something that's worth... that we hadn't really thought about," but then because of the conversation that we're having with you, it was something that came up and noted. Now with our team, there's a little bit of a challenge here because we recognize that we are a lot of white men working in downtown Toronto finance. My wife is the Director of Operations and she runs the entire business, she's Asian, she's Chinese, and she's running everything. And so we do have diversity on the team, but in the advisory channel in particular, we recognize we are white men who are doing this.
And so this is a conversation that we are having to say, "We're looking to have a DEI strategy and we want to hire and have diversity in the firm." This is a goal that we have. And what we mean by this is women and people of color. And so what has been interesting though for us is that we have put this out there without really knowing, to be quite honest with you, what is the strategy to implement this? Most of the talent that is coming to the door is not diverse. We're not getting a lot of members of the Black community coming to the door to say, "I'd like to be an advisor and I'd like to fill this position, "or, "I'm interested in what you're offering." So when you're looking at all your candidates and there's three white guys, you're like, "Okay, well these are the people that are showing up," and so I don't-
Stephen:
White, off white, cream, right?
Andrew:
Sure. Yeah. If we're trying to be diverse, we're like, "Well how tall is he?" That's doesn't really count as diversity, right?
Stephen:
But this is a... and I love to hear the reality on the ground because I was talking to Wes Hall about this, who leads the Black North Initiative, and he's talking about representation. And I wrote an article about this in op-ed and I said, "You can't just make up Black people." If we just take Black people, it's not like... you just can't create Black professionals who are ready to ascend to senior levels. You have to groom, you have to... And where does that start? You have to create a pool of talent somewhere. And I'm very passionate about this, but you have to go into the communities and inspire young people. First we have, here in Ontario, we have to get... I've been talking about this for a while now, but we've been streaming Black people, Black kids into non-academic streams here for decades in this province.
They're just talking about changing or saying, "Oh we're not doing it, we don't want to do it anywhere." But they're still kind of doing it. So that has to change so that more Black kids are inspired to learn, to want to go to college and are given the tools and the support they need to aspire and achieve and be successful so that they can even get to university and college, gain, if some of them want to go into finance and investments and all of those things and accounting and so on, so that they can then get hired hopefully somewhere and gain some experience. And eventually like any community of professionals, they're going to go, "Hey, I need to advance and I'm going to find new opportunities." And those opportunities are open to them, which is what we're talking about here, and therefore hopefully more diverse people are part of your pool that's available.
Andrew:
Yeah. And the other thing that... so all of those points I agree with and it's stuff we've talked about, which is where the scholarship comes from and the internship, and so create a pipeline so that there's... just to know this is actually a career that's out there that you can have, that you can make some decent money at that can be quite enjoyable. I don't know if this lack of awareness of... because I didn't know about it until I took a course at university. I was like, "Oh this is actually a thing I can do."
Stephen:
But this is what I'm saying, Andrew, that this even it exists. I tell the story in my book about I had this passion for film and television as a little kid and grew up and stuff and I went to high school and nobody told me what I could become or be or the opportunity. No one told me there was such a thing as film school, that I could go to a school, a university and learn to be a writer or a scriptwriter or be a technical person or being a financial person in the film and television business. So if your community is not exposed to that, be it by laissez fair education or people that don't care or people who are actually opposing or creating barriers, then how are you supposed to reach for a passion career. So I like what you talked about, because that was part of your ideas as well is going back and reaching the communities.
Andrew:
A hundred percent. Starting at a young age too, financial literacy and inclusive financial literacy. And this is all the possibility. Because I mean at some point somebody planted a seed in my head and then I was like, "Oh, really? That's how large my firm could be?" And it was an astronomical number to me at the time, and we did it, you know what I mean? But somebody had said it to me out of the blue at a dinner, "So do you know who you are? Do you know what you're going to do? This is your potential." And I was like, "Whoa, I can't believe that that just happened." And then it happened, and I don't think if that person hadn't said that to me that it would've.
The one last point that I want to make though about our firm and looking to expand diversity and having a policy is that it also leads to some pretty awkward conversations, to be quite honest with you, where you're kind like counting, you know what I mean? It's like, "Okay, well we have... well my wife is Chinese and she's a female," so okay, that counts, "and we have an employee who is Black, so that..." I don't know, but it just gets into a weird space that where we are having conversations that are potentially awkward because we want to participate and we want to be a part of positive change. Then you're like, "But how do we do it?" And if it's not happening fast enough for what we want, because we've said we want this, then you start getting into those kind of conversations and then it's like, "Well this doesn't feel right."
Stephen:
Well this is where having a real equity, diversity, inclusion strategy that is grounded in a people first strategy, an authenticity and that real willingness to make the change happen versus, "We have a quota." So those are two different things. And I know in growing a firm, a business and scaling it, there are a lot of priorities that can be before EDI, even though I would say that organizations that do invest, that are more diverse, are more successful in terms of the bottom line and those that are publicly traded in terms of returns on investment. So the case is there to go in that direction. But I speak and I facilitate lots of conversations, but I think that's where, turning the tables, I would give you advice, to Flatiron, is that getting to the strategy that is really fleshed out in terms of how you are a diverse organization in practice is more important than the numbers. I
Andrew:
I agree. It's just that the numbers are quoted. That's the problem, that's the-
Stephen:
Of course. But you will get to the... but the thing is that I'm all about KPIs and getting to those, but those are, if you are doing the work of building, then the numbers will come because you will just be acting with that mandate, and then you will attract that talent because they'll know that's the place they can thrive and be successful and be supported. And you know me, I'm a branding marketing person, but that's how marketing and branding works is people start to trust your brand and respect your brand, whatever that brand is and what you do. It doesn't matter what the sector is. And so that's where I think a lot of the conversations need to shift to is it needs to be such a strong pillar that it defines as part of who you are as an organization.
Andrew:
Yeah, I agree. And I think you're right, having a clear strategy that you can point to and understanding that it doesn't happen next month.
Stephen:
And being transparent, and this is... you may not meet your goal but you're striving for it and then just like anything, we've got to modify the plan because it's not quite working right, and then eventually that day will come where the candidates in front of you will be much more diverse and the resumes. So I like the fact that you're doing the work and that's a great start.
Andrew:
Yeah.
Stephen:
I always try and end with a hopeful note. We talked about your family. Essentially, you're a biracial family, you have three lovely children and lovely wife, she's also one of your partners in the business in terms of working with you. What do you think with all this reckoning on race and the change hopefully that it's coming, what do you see for the future for your children in regards to the world that they're going to grow up into, in terms of diversity and equity and inclusion, and then being able to really do whatever they want?
Andrew:
Yeah, I mean the question that you've asked around being hopeful, and so I would say that... I mean, I mentioned it earlier, one of my favorite things to do is drop my son off at kindergarten every morning and all the kids instantly just start running and playing together and it's just such a nice way to start the day. I mean that, it's just a beautiful thing. There's zero... none of these issues exist on the playground with them and I see it becoming more and more diverse and it being an effortless mix. So from that point of view my kids don't... they haven't experienced it, they don't see it, and all the opportunities are there in the world for them. And I think that the fact that we're having these conversations are fantastic and that these types of conversations, maybe even five years ago, maybe even, I don't know how recently, it's uncomfortable to have these... it's still uncomfortable. This is not an easy... you can't just bring this up at dinner, "Oh, by the way, can we chat about this a bit? How does everybody think?"
Stephen:
I do.
Andrew:
Sure. Okay. Well, you do. But I mean, I don't think that everybody is comfortable to bring it up. But the fact that we're having them and the fact that this podcast exists and the fact that we have... that we can see strategies, that we're having conversations to start it, I think is extremely positive, even if you see how far things have come over the last 20 years, really since I started. I'll just use my career, over the last 15 years, some of the changes that have implemented are definitely going in a positive direction, and they're not always comfortable and they're not always easy, but just the creation of things like the Black North Initiative I think is fantastic that we have that. That's something that we can look at that is there that we can get on board with. It's easy. You could do that today.
So I feel really positive about that. And for my kids, the things that are so easy for them to accept. There's no challenge for them to accept any of their friends no matter what their choices are, no matter how they choose to dress, no matter how they choose to act or all of these things that maybe Gen Xers or even baby boomers, if you want to go up, it's such a big deal. It's so important. "You can't do this and you can't do that, and why are you doing this? And it makes no sense." To them, it doesn't matter. It's all good. Everything... they're very open to it. So I find that to be... It just makes me very, very happy.
Stephen:
We'll end on that happy note. Amazing. Thank you, Andrew. Great conversation. This is why I love this podcast. And again, a big thank you to Flatiron Wealth Management and your entire team for supporting the Black and White podcast. To learn more about Flatiron Wealth Management, please visit their website at www.flatironwealth.com. We'll also have information posted on the Evergreen Podcast website. Andrew, let's speak soon.
Andrew:
Cheers.
Stephen:
Thank you.
Andrew:
Thanks, Stephen.
Stephen:
Thanks everyone for listening to Black and White. If you've enjoyed today's conversation, please be sure to subscribe to the show on your favorite podcast app and take the time to rate our show. Black and White is a production of Evergreen Podcasts. Special thanks to my producer, sound designer and engineer Noah Foutz and our executive producer David Allen Moss. A reminder that my book, Black and White: An Intimate Multicultural Perspective on White Advantage and the Path to Change, is available at your favorite bookstores across the US and Canada, and online at Amazon and Indigo Chapters. I'm Stephen Dorsey reminding all of us that we can all be better, do better, so that eventually we can all live better together.
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