Former State Street executive Trevor Rozier-Byrd is launching his own startup to tackle a daunting societal challenge: the racial wealth gap.
Rozier-Byrd’s new company, Stackwell Capital Inc., is building an investing app aimed at helping build generational wealth in the Black community, trying to make investment more accessible to those who have historically been shut out.
The wealth gap between Black and white Americans has grown continually for decades, and has worsened during the pandemic. It's a pronounced problem in Boston. A notorious statistic from a 2015 report from the Federal Reserve Bank of Boston suggests that the median net worth for white households is nearly $250,000 and just $8 for Black households. That same study found that for every dollar the typical white household has in liquid assets, Black households have 2 cents. About 56% of white households have retirement accounts, which is only true for one-fifth of Black households.
Stackwell's leaders believe the racial wealth gap is the “social justice issue of our time,” Rozier-Byrd said.
“Notwithstanding all the recent conversation around equality, particularly in the last year, the reality is the racial wealth gap is actually getting worse," Rozier-Byrd said in an interview. "So we felt like there was a real market need for a solution that could help people invest sustainably, to achieve long term financial independence and ultimately grow their wealth.”
Stackwell just raised a round of seed capital and is opening up its early access waitlist this week for its robo-advisor product, the first steps towards Rozier-Byrd’s broad vision for the firm, which is to make itself into the preferred partner for the end-to-end banking and financial services needs of people within the Black community."
The app, like other robo-advisers, will give users automated investment portfolios based on users goals and risk profile. It will also leverage behavioral psychology to help users understand investment fundamentals, Rozier-Byrd said.
Stackwell’s board of advisors includes former U.S. Senator Mo Cowan, Rapid7 CEO Corey Thomas and investment banker Kevin Chavers.
“Stackwell’s mission to help more Black people invest sustainably and achieve long-term financial independence is the type of innovation we need and is long overdue,” said Cowan in a statement.
Rozier-Byrd said the company’s staff has tried to surround itself with advisors that are “aligned to the community that we are trying to serve, that have shared some of the same lived experiences as our target users, but also have had really successful business careers themselves.”
The CEO’s own background is in finance, having worked on corporate transactions at two big law firms before joining State Street in 2016. He left the job in August for Stackwell, having risen to a managing director position.
His first job out of college was at a New York law firm, where he helped investment management firms bring products to the market.
He recalled a conversation with a friend’s father, who sat him down at 22 and explained the power of long term passive investing, giving two pieces of wisdom: it’s not about timing the market, it’s about time in the market; and it’s not about how much money you make, it’s about how much money you save.
“Those two statements have stuck with me for the entirety of my adult life and have really just sort of set me on this path of being extremely interested, on a personal level, as well as a professional level in the financial markets, how they operate and how they might be able to be utilized to grow one's wealth over the long term,” Rozier-Byrd said.
The company is aiming for a full release of its robo-advisor product in early 2022.
