Putting His Money Where His Hope Is

Kenneth Royster recalled the day when, a few years into his financial career, he handled his largest case to that point — $2 million that a client gave him to invest.

He and the client, who are both Black, went to the client’s bank to move the money from the client’s bank account to the investment firm.

But the bank branch manager, a white man, questioned the transaction.

“He started to query me about where I came from and he wanted to understand who I was because they normally don’t see African Americans doing a $2 million transaction,” Royster said.

So, Royster turned the tables on the banker.

“I asked him, ‘Well, tell me how you got the job here at the bank?’ And he told me he was working at Radio Shack. But he’s a really good golfer. And he was playing golf with one of the senior vice presidents at this particular bank. And so the guy liked him and offered him a position as branch manager.”

That story affirmed Royster’s belief that there is a disparity in opportunities between Black and white people.

“Here is a white guy who’s already in a senior position, and he has the power and authority to give a job to whoever he chooses,” Royster said. “So, what are the chances that he would have been playing golf with a Black guy that day? Probably 1,000 to one. That doesn’t mean the guy is racist. It simply means there’s a difference in culture.”

Royster said that incidents such as this one inspired him to “reset the deck” for the next generation of Black advisors.

He is owner, president and CEO of First Genesis of Virginia, an advisory firm based in Norfolk.

He also is president and CEO of, and a wealth consultant with, Heritage Financial Partners, a management company with the following mission:

1. Increase the level of generational wealth transfer in minority communities.

2. Increase the number of financial professionals focused on serving and educating Black and Hispanic investors.

3. Increase the number of financial services firms owned by Black and Hispanic financial professionals that survive and continue to serve their communities beyond the life of the founder.

“The reality is that most advisors — whether they are in financial services or in the insurance business — they work for major firms, but they don’t own their own business,” he said. “I know of only a handful of African American advisors who own really good businesses, but it’s not widespread. And they don’t have a ‘firm’ mentality, where they have multiple locations in different cities. They’re generally a committee-of-one top producer with maybe five or six subproducers underneath the main person.”

Royster said that Heritage is “trying to change that dynamic.”

“We’re bringing people into the industry and teaching them first how to be a good advisor,” he said. “Then, second, how to transition from advisor to business owner, and then how to transition from business owner to CEO. Now you run an organization. Instead of everything being predicated on every sale you make, now you build other people. And that builds the organization. And that’s how you build a real brand.”

‘The Opportunity Of A Lifetime’

Royster said that kind of information hasn’t come to the Black community, so he and his business partner, Vicki Brackens, are drawing upon their decades of experience in the industry to invest in the next generation of Black advisors. Royster and Brackens have spent the past three years developing Heritage Financial Partners, and the company opened for business Feb. 23, one day before the stock market took a historic dive as COVID-19 threatened the nation.

“This is the opportunity of a lifetime,” he said of Heritage. “When you have 75% of the profession dominated by white males with an average age of 60 years old, in 20 years they all will have aged out of the business. Some of them own tremendous books of business, and they need someone to buy those books, that business, from them. And so many of them don’t have a succession plan in place. That’s why I am now looking to develop young African American advisors into the field. They need mentorship and leadership, and that’s our focus at Heritage.”

Brackens has known Royster for many years, and she described him as “all about the execution.”

“He can’t talk about an issue without doing something about it,” she said. “He addresses issues not in a philosophical manner, but in an action manner. He discusses issues, but he executes strategies, and that is the foundation of what we are doing together.”

Although the industry has stepped up its efforts to recruit Black advisors, Royster said he sees a disconnect.

“The disconnect is that you have white advisors hiring and training African Americans, but these white advisors have no clue of the marketplace that African Americans actually come from,” he said. “The African American advisor, on the other side, tries to assimilate. But the situation really doesn’t fit them, and they end up failing. It’s because there is a real difference in this country. You don’t have to like it. But the reality is that racism is real, and culturalism is real. And people gravitate to people who have like minds and do things together.” Royster said

Heritage is focusing its efforts in seven East Coast metropolitan areas that have a high percentage of Black population and a high percentage of Black wealth. Those areas are New York, Syracuse, Washington, Charlotte, Atlanta, Richmond and the Tidewater area of Virginia.

“These are areas with high concentrations of affluent African Americans who have a need for professional advice, as well as high concentrations of highly educated African Americans who can move into this field and get licensed,” he said.

The initial goal for Heritage is to provide support for seven to 10 Black advisors in each of the seven metro areas over the next 10 years, Royster said. In order to do that, he is asking other advisors he knows to accompany him on visits to historically Black colleges and universities as well as other East Coast universities that have a high percentage of Black students, and to conduct workshops to introduce students to the industry.

Heritage wants to give aspiring Black advisors a boost by paying for them to take the SIE exam, a new, introductory-level FINRA exam for prospective industry professionals. Its purpose is to assess a candidate’s basic knowledge of securities industry topics fundamental to working in the industry.

Royster also wants to attract Black advisors who already have their own practice into the Heritage fold.

Heritage is supported in its efforts by its broker-dealer LPL Financial, as well as by Stratos Wealth Partners, which offers financial advisor services in 49 states, Royster said.
He hopes that eventually Heritage will become the McDonald’s of the financial services industry.

“What we want to do down the road is get advisors who may have already branded themselves in different markets. They won’t have to rebrand. They only have to say they’re part of the Heritage family,” Royster said. “Now that gives scale and scope. You’re supported by the largest independent broker-dealer in the country. But you still have your independence.”

‘I Want To Be That Guy’

Royster was living in Washington in 1984 and looking for a career to transition into civilian life after having served as a noncommissioned officer in the U.S. Army.

“I thought I was a leader,” he said. “So I thought, ‘I’ll go out and find a management trainee job where I can grow myself into it.’ I was offered three jobs on the same day. They were all sales jobs disguised as marketing representative jobs.”

One of the jobs was with Encyclopedia Britannica, one job was selling vacuum cleaners and the third was with PennCorp Financial, a consortium of insurance companies owned by American Can.

“I was fortunate that the interviewing manager was an African American man, 33 years old, one of the sharpest men I ever met in my life,” Royster said. “And he was honest with me about what the insurance business was like and how difficult it is to get started. But he said, ‘If you have the talent and persistence, you can push through all of that and you can find yourself doing really well in this business.’ I looked at him and said, ‘I want to be that guy.’ And I started out selling insurance door to door.”

Within 12 months, Royster was one of the company’s top producers. Soon afterward, the company offered him an opportunity to relocate to the Norfolk/Virginia Beach area to support another agent. But when Royster arrived in his new location, he discovered the agent had quit that same week to work for another insurance company.

“So, you can imagine what that was like for me, 25 years old, just moved to some place where I didn’t know anybody. But I had good management and good mentors, and they said, ‘Listen, this is a great opportunity to make a name for yourself. Now all the client company accounts that are down there, they’re all yours.’ Because that agent wasn’t independent. He worked for the company, same as I did. He didn’t own the book of business.”

After a few years, Royster was offered a job with MetLife. He became a financial planning director for MetLife in Atlanta, growing his office from $75,000 in fees to $500,000 in fees in five years.

He retired from MetLife in 2016 (“I owe that company a debt of gratitude”) and started First Genesis of Virginia. “I’m fully independent now. But from 1996 up to now, I’ve always run my own shop. Paid my rent and my expenses, same as any other business owner.”
Royster said his experience in running his own shop gave him knowledge that he wants to transfer to those who affiliate with Heritage.

“Just like in every industry, there will be some who want to be the CEO and others who will say, ‘You know what? I’m just really good at being a sales rep. That’s all I want to do. But I want to be well supported and well developed.’ And we will offer help and support no matter what they want to do.”

A Family Affair

Royster didn’t have to go far to find help for his practice at First Genesis. His two daughters, Kenyatta and Danica, work with him. Danica is a financial services representative and wealth consultant, while Kenyatta is the firm’s marketing support specialist.

“My daughters have been around the financial services industry their whole lives,” he said. “From the time they were young, I would take them to conferences with me, and they would help work the booth in the expo hall. I told them that the financial services field gives you the opportunity to make money, to help people and to have control over your destiny.”

Royster said he tries to give his daughters the freedom to criticize him if they disagree with how the business is run. Yet he also wants them to understand that as their father, he wants to give them his best counsel as he leads the firm.

First Genesis serves a white-collar clientele that’s about 90% Black, Royster said.

“We serve a lot of business owners, and we have had a strong presence in the clergy market for a number of years. We have a niche market with pharmacists and dentists. Because we have so many universities in this area, we have a lot of clients who are deans of schools and department heads at universities. We also have college basketball coaches and referees as clients.”

Royster said his clients are looking for education as well as for financial services. “We want people to know what it is that they’re doing with their money,” he said. “I don’t want clients to say, ‘I just turn my money over to him and he handles it.’ I want them to know how money works.”

At 59 years old, Royster is beginning to think about the future of his practice as he advises his fellow professionals about transitioning their practice when they approach retirement age.

“It’s all about investing in the junior associate,” he said. “The transition cannot be just about you. It must be about their development and their taking over for you and their being not you but better than you.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].