Originally created 02/08/98

Blacks not faring well locally



There are no exchanges in Augusta now; all that's left of the Cotton Exchange is a museum.

But Augusta does have a good-sized stock brokerage community, with about 100 brokers, at national and regional companies, independent ones and firms linked to banks.

But in talking with workers in that community about the number of black brokers in Augusta, only one name kept popping up -- Thomas Edwards.

Many in the brokerage arena said they would like to see more. They said the client market is there, but few blacks have approached their companies looking for jobs.

But even Mr. Edwards didn't plan to become a stock broker. He was recruited, and has been in the business more than eight years.

"That's not something I set out to do," Mr. Edwards said last week. "I've always thought about being involved in the financial markets, but never to this extent."

A manager at the Merrill Lynch office in Augusta recruited him in 1989. At the time, he was working out of Atlanta as a salesman for a hospital equipment company and had business in Augusta from time to time.

"I love it," said Mr. Edwards, who recently left Merrill Lynch to work for Securities Service Network Inc., which has an office in Augusta. The company is made up of independent brokers who work with National Financial Services Corp., a unit of Fidelity Investments Inc.

Recruitment of blacks into the field is wide open, brokers say.

"The whole sense is this is a group of people we have not recruited," said M.A. Mullis, first vice president and branch manager of the Robinson-Humphrey office in Augusta. "There is a whole pool of talent and we have not talked to them yet. And that's why it's so exciting."

Merrill Lynch in Augusta has had other black brokers in the past and would welcome some now, said Mike Reese, vice president in charge of the office. He said many times broker candidates are referred to him by someone in the industry.

Nationally, the low number of blacks in the financial services industry has been brought to light. Jesse Jackson's Rainbow/PUSH Coalition sponsored a three-day conference in New York last month on the lack of diversity in the securities industry. And Federal Reserve Chairman Alan Greenspan, along with Securities and Exchange Commission Chairman Arthur Levitt, urged the industry improve on diversity.

Jocelyn Evans, assistant professor of finance at Georgia State University, agrees that the number of black stock brokers in the United States is low.

"Just from teaching in this area, I see that the percentage of blacks in finance vs. the marketing and management fields is disproportionately low," she said.

There are at least two possible reasons why there aren't more black people working as stock brokers, the educator said.

One, the level of math required to understand financial markets might turn some off. She said students need pre-algebra, algebra and calculus in school to get a good math background.

"But often people -- not just black people -- don't take the level of math they need to get a good grasp of the financial markets," Dr. Evans said. "... Our kids do not get exposed to these fields early enough. I always argue that it starts in junior high school."

The black students who get the background in math then need to get more financial education in college, such as economics and accounting, but many who do get it tend to go into other sectors of finance because it takes longer to get established as a stock broker, Dr. Evans said.

"Unfortunately, when you're talking about brokerage services, that requires expertise up-front," she said, adding that companies are reluctant to put inexperienced people in a position over someone's life savings.

In Augusta, at least one firm requires a two-year training period; and it took one licensed stock broker 10 years before she developed her own clients.

"You see minorities are choosing to go into the businesses that require the least equity," Dr. Evans said, adding that it takes a lot of capital and plenty of testing and government oversight to start a brokerage business.

Dr. Evans said the other reason for a low number of black stock brokers could be the risk involved in the business: Pay generally is based on commissions. The stock markets can vary from bull to bear status at any time.

"They have to take the risks as well as the rewards," Dr. Evans said.

Brokers in Augusta say stock broker candidates should have a background in business or finance and sales.

Catherine Metts, assistant vice president at Wheeler Securities, added that they should be friendly, have a good reputation, be willing to listen and be willing to work hard and take information from a client and put it into action. "You've got to have a plan," she said.

And have good ideas, Ms. Mullis added.

"The person that I am looking for is a person that can bring new ideas to the way we approach clients," said she said.