As a corporate lawyer and business person who worked in finance and asset management, Trevor Rozier-Byrd was often the only Black person in the room. He found himself wondering how he could use his personal expertise to decrease the wealth gap in the Black community. In 2020, he founded Stackwell, a digital investment platform marketed toward Black consumers.
According to 2019 data from the Federal Reserve, the average white family has $983,400 in net worth, while Black families have an average of $142,500. Only 34% of Black families have equity investments, compared to 61% of white families. “A lot of people in the Black community feel like financial markets are inaccessible to them and that you need a lot of money and pre-existing knowledge and experience to participate,” says Rozier-Byrd.
To begin with, Stackwell has a $10 account minimum and a $1 monthly subscription fee to make sure it’s accessible. Traditionally, investment accounts have minimums that can start at $1,000, although recently there’s been a push to have no minimums at all. Rozier-Byrd and his team also opted for a robo-investing solution, a way of helping to ensure that the product is easy to use and doesn’t require an extensive knowledge of the markets.
Stackwell’s app features a sleek user interface that asks customers what their goals are, and a calculator that shows them the long-term impact of their investments. The app also has notifications and behavioral nudges to encourage long-term investments, such as a note congratulating a customer on reaching an investment milestone.
“Folks can be overwhelmed by the process of investing,” said Omosefe Aiyevbomwan, Stackwell’s vice president of product. “Our solution automates the process and eliminates the stress.”
‘A sense of belonging’
Beyond creating a user-friendly product, Stackwell is also designed to reduce the socio-emotional cultural barriers to investment. It features clear language that is crafted to not be othering. While Stackwell is open to all customers, its webpage and marketing material emphasize the Black community. (A 2019 Google study found that 69% of Black consumers are more likely to purchase from a brand that positively reflects their race). Stackwell is also aiming to build a community of Black investors—for instance, it has a student athlete ambassador program that provides financial education to college athletes.
“People aren’t in this space,” Rozier-Byrd says. “There’s an emotional and social belief this isn’t for us. We’re trying to give people the sense of belonging and community that they can participate and be empowered.”
So far, Stackwell has raised $3.5 million in its recently announced seed funding round, which counted Red Sox CEO Sam Kennedy and former U.S. Senator William “Mo” Cowan among its participants. The service is currently in beta but is expected to launch this fall.