Wharton professor Keith Weigelt and President and CEO of Castle Oak Securities L.P. David R. Jones join host Kenneth L. Shropshire, faculty director of Wharton’s Coalition for Equity and Opportunity, to talk about inequities in finance and financial wellbeing.

They discuss the racial wealth gap, and the role of access, opportunity, and education. Learn about the solutions Wharton is pursuing to address these disparities, and how business leaders and financial institutions like Castle Oak can contribute to closing the wealth gap. This interview is part of a special 4-part series called “Opportunity Matters.”


Kenneth Shropshire: Welcome to this episode of Opportunity Matters. Today’s conversation is on finance. What we want to look at is access, opportunity, education, what can be done, and what’s missing in terms of those who want access, need access in finance settings. We’ve got two great guests to help us through that. First, I’ll introduce a former student, David R. Jones. He’s the president and CEO of Castle Oak Securities LP, a leading boutique investment bank with a broad offering of financial services, including equity sales and trading, fixed income sales and trading, and financial advisory services. Since founding Castle Oak Securities in 2006, he has overseen the substantial growth of the firm’s business and activities and personnel. David is a proud MBA graduate and served on the Wharton School Graduate Executive Board from 2012 to 2023 and brings over 30 years of Wall Street experience to today’s conversation. Most importantly, he’s a former student of mine.

Next is a longtime colleague, professor Keith Weigelt. He’s the Marks-Darivoff Family Professor Emeritus of Management. He’s been a professor and a colleague of mine at Wharton for 36 years. He co-founded Bridges to Wealth in 2012 with a mission to close the wealth gap through evidence-based education and opportunity. The program empowers youth, parents, and community members with financial and business life skills.

What we’re going to do is talk about the alpha and omega of finance. The entry level space, what kinds of education can we provide? Our dean here talks a lot about financial fluency. How do we get people to engage and understand finance a bit more? How do we get more access to people that don’t traditionally have access to the highest levels of finance in places like investment banking, private equity, access to capital and the like.

I’ll start off with you, David. If you could just talk some about your thoughts on the racial wealth gap and how that fits in with today’s economic landscape and the issues.

David Jones: When I think about the racial wealth gap, and I think about the U.S. economy — obviously we’ve known the social injustices that happened over generations that caused this. We always talk about how we want the economy to grow. And when they talk about it, they don’t really say how we’re going to grow. They talk about more money being in the economy, and businesses growing, and things. But those injustices, those disparities, are a problem in terms of not having full participation in the economy to help grow it. And when you don’t have that in terms of folks who have been disadvantaged for a long time and things like the home ownership and income and savings and investments that really helped drive the economy. And when the economy slows down, those things hold people back. You have a cycle of folks that aren’t really participating.

So, I always think about this gap and how it impacts the economy. But also, if we want to fix it, we’ve got to raise the historically disadvantaged groups to help make the economy much stronger. I do think about it, and I think that it’s a cycle that we’ve got to get out of. Because the unemployment rates cause people that don’t have the wealth or the substance to get out and survive through that, through the economy. It’s just a perpetual cycle. Access to the education, the health care. All that is wrapped up into that, and you can take it all apart. But that’s when I think about this gap and how it’s really affecting the economy.

Shropshire: One of my team members said, “Be sure you talk about these foundational issues about why the wealth gap exists.” The structural issues that, for example, prevented home ownership, that prevented access to capital to invest in businesses, to start business. I don’t care the ethnicity or the religious background or the citizenship level of whoever it is. If you haven’t been able to accumulate capital over generations, you’re in a different position than somebody who has done so for a long period of time.

Jones: Right. People know now [the difference] when you talk about income versus wealth. “Oh, I got a good job, and I get paid every week.” That’s a component, but in terms of the wealth creation and the stability it creates within a household, within communities, it’s very impactful. The centuries that those injustices took place — how long does it take to get out of that. That’s what I was talking about. It’s a cycle that people are in. I don’t have the answer, but it’s a real problem, this racial wealth gap that we have.

Shropshire: One of the things that I do in real life when I’m not pretending to do podcasts is to work with athletes. And it’s almost a foundational conversation with some of them. They get a signing bonus of a couple million dollars. And they might accidentally use the word, “I’m wealthy.” I said, “No, you are rich in this moment. But you don’t have wealth. You can have wealth. You can work to have wealth. But there are some more steps to that. And by the way, your wealth, it’s going to be difficult for you to catch up with the wealth that some others have had for generations.”

This is a perfect lead-in to the man who created Bridges to Wealth, professor Keith Weigelt. Keith, why don’t you talk some about the work that you’ve done and why you do it, and how it ties in with this foundation that we’ve begun to lay here.

Weigelt: Sure. I’m really a child of the Civil Rights Movement, and that was my big first social movement, so I go back to that point. In 1963, Martin Luther King gave a fairly famous speech called “Why We Can’t Wait.” In that speech, he said, speaking of white Americans, “They have deplored prejudice but tolerated or ignored economic injustice.”

When he made that speech and we look 60 years forward to where we are today, we can ask ourselves, “What has changed in those 60 years?” The biggest thing that has changed is the wealth gap continues to grow, almost monotonically. We talk about the wealth gap, but most people don’t understand how big the wealth gap is. Based on the 2020 census, if we look at white households, the median wealth of white households is a little bit over $187,000. The median wealth of Black households is equal to $14,000. That’s way more than 10 times. Again, this wealth gap continues to grow. While we’re decreasing the income gap, we’re not doing anything with the wealth gap. And I would claim that since Martin Luther King made that speech in 1963, that Black households are even in a worse position.

Shropshire: It’s interesting you raise this in the way that you do. A lot of the controversial DEI conversation now is about access to jobs, and that’s just the tip of the iceberg of the problem. The idea of having some regular revenue, getting a salary, or getting even a big salary, is not really what’s at the heart of the problem. You’ve identified this household number at a national level that’s problematic. And one of the issues we should be addressing— and many people are taking a lot of approaches at it— is how to close that gap.

Weigelt: Right. The other thing with wealth that we want to remember is that if you look at society as a network, the wealth disparity hole is a central node. It causes all of these other disparities in our society. There’s growing and growing evidence that says that the health of a household depends on the wealth of a household. So, if we have a wealth gap, we have a current health gap, which is going to get bigger. We’ve seen this in Covid, where minority households were affected significantly worse. We have an education disparity— low wealth households do not have as many resources to spend on their children’s education. We have a home ownership disparity. Home ownership is one way you can grow wealth. We have a criminal justice disparity, because low wealth households do not have the resources to fight the criminal system.

So again, wealth is really, really important. And I think that’s why this program fits in with the vision of Dean Erika James and the vision of her coalition about using business practices to really transform people’s lives. In our program we have empirical evidence showing how we have transformed people’s lives.

Shropshire: Let’s move away from the dismal state of things and talk about some of the affirmative steps that we can take and have taken at these two different levels. First, the entry-level educational level to bridge a path to wealth. And then, David, I want to come back to you and talk about access to your business and access to real money. Big money. Money at levels that’s just unimaginable unless you’ve been exposed to it.

One of my favorite colleagues here at Penn was professor Elijah Anderson. I used to go to lunch with him once a week. He’s a sociologist and I’m this business school person, and we exchanged ideas. He said to me once, “You know what? I’ve got the answer to all these problems. It won’t happen tomorrow, but this is the answer. The answer is one word.” And I’m at the edge of my seat, waiting for him to say it. He says, “The answer is exposure.” That if we can expose groups that don’t know about these things at the earliest stages, earliest generations, and continuously do it, we’ll get some movement. I always think about that exposure kind of idea.

But let’s talk about what you do, Keith. And then, David, I want to come back and talk about exposure into your business. Talk about the practical way that you provide the education.

Weigelt: Bridges to Wealth is a community-based program. It’s a unique program. No other business school has a program like it. We go into the community, and we give them basic education at both the high school level and the adult level. And then we give them opportunities to help them put what we taught them into practice. This long-term engagement is really, really important. We encourage people. We can show how people are changing their financial behaviors, and so forth.

I just want to say, business schools have a responsibility. They’re in a very unique position because, first of all, we have the knowledge on how to show people how to generate wealth. And we’re in a unique position to create what I would call this community wealth ecosystem, which is a public-private partnership. And that’s exactly what the dean and her team is doing. I look upon this as almost like this community-wide DEI program.

Shropshire: See, you turned some people away. You said DEI again, so watch out.

Weigelt: I know, I know. Because I think that those people are wrong. And I think we have to be more aggressive in showing the benefits of this type of program.

Shropshire: So, you go to the communities. How do you get them to understand this path to wealth? Or at least greater positioning than they have?

Weigelt: It’s very simple rules. Most people overestimate how difficult it is to be wealthy, especially in the market. First, we show them how to generate wealth. And then we give them very, very simple rules. One thing you want to understand is our competitive advantage over any financial services company is that we’re not selling anything. We don’t charge for our program. None of our services. And people trust us. That’s why, again, universities have a responsibility here because they have the trust that companies do not have. People trust us. I started with churches, and word has spread.

Again, we teach very simple rules, then we have this long-term engagement, and people see their investing dollars growing. And when people see that, they understand it.

Shropshire: One path may be to introduce communities that have never seen index funds, for example, to say, “You take a small amount of money, as little as a dollar. I’ll show you how to do this.”

Weigelt: Exactly.

Shropshire: It can be a frightening experience to say, “Wait a minute. I’m in the stock market? How do I do this?” As Elijah Anderson said, it’s the kind of exposure in how to do this, and they get to see how it grows along the way.

David, you’re at this other level. What’s the story to access in your business and to the wealth that’s available in your business?

Jones: Keith, that sounded like a wonderful program. When I look at what we have here at Castle Oak— and I co-founded this 17 years ago with four individuals. Now we have 70 employees, five offices around the country. We’ve raised over $4 trillion for U.S. corporations, and we trade hundreds of millions of dollars in fixed income and equity securities every day.

It’s a great business, and it’s twofold. I’m in that high finance world, but I’m also a small business owner and I’m a minority-owned business owner. We focus a lot here on giving back. And it’s not just our treasure, our money, but our time as well. Because our exposure, these kids are seeing me as a CEO of a company, seeing my management team that’s 85% minority or women. When we talk to these kids— because we can see their eyes light up, just to get them interested in what we’re doing. That exposure part, Professor Elijah was correct on saying that. We do focus on that.

I think Wall Street itself, the investment banks — I think it’s less sparse today than it was with minority individuals in the C-suite levels. What’s happened is their pipeline has kind of dried up a little bit. But I think they’ve got tech companies that are growing and paying a lot of money. You’ve got private equity guys that are hiring from the colleges and MBA programs now. And a lot of kids are going the entrepreneurial route. So, that pipeline is less.

But from day one, we’ve had an internship program. It started just as a summer internship program. Now we focus on one- and two-year analysts. But we feel we’re helping to increase that pipeline. We know Wall Street’s got a lot of folks, and we’re a small company. But trying to give that exposure and that training to folks who don’t have that, might not get that opportunity anywhere else. And Ken and Keith, I will tell you, I’ve made some decisions on hiring on folks who I think might not get that opportunity. If it’s a tie, it’s like, we might have to say, “This one kid might not get another opportunity to get exposed to this business and excel.” That’s what we’re doing in terms of internally, here.

I mentioned our money giveback, because we try to leverage our giveback into organizations that have that same mindset we have. We have three pillars. You guys probably know, I have scholarships set up at Wharton and my undergrad, Boston University, focused on finance, focused on people of color. So, it’s education, professional development, as well as community impact. Those are the areas we want to put our dollars to leverage it with organizations that can do and help give that exposure or get a diverse group of talent looking at this business.

Shropshire: One of the things that you’ve reminded me of, David, is that we’ve got some other programs here at Wharton that try to do some of this exposure work, too. We’re in the leadership of alt finance, which is a combination of companies working with Wharton to expose historically Black colleges and universities to the alternative finance business. I think about even my undergrad days at Stanford University. I didn’t know anything about investment banking. I think those kinds of things existed in the ‘70s, but I didn’t know anything. As an econ major, I just wasn’t in the orbit of understanding these higher finance opportunities that exist. So, this really is the bookend piece to the work that Keith is doing. And we’ve got some other professors that are starting to do some of this kind of work.

I just want to throw out a wild card question and then allow you both to close out with whatever big takeaway you’ll make sure people have. How can AI help in this space?

Jones: That’s a double-edged sword. It’s sort of like the evolution of the internet. It can be an equalizer, something that could level the playing field if utilized correctly for all folks. But it also could be very bad if folks and certain groups don’t have access to that. It’s the same as we talk about the internet.  We need to make sure that all people have access to the internet and technology. AI is going to be a very, very powerful, game-changing way of the way we live. And if only certain groups get access to that, that’s going to be a major problem.

Weigelt: Let me talk about something else, because I don’t know that much about AI. I just wanted to point out that our audience and our participants, if you look at them, 20% receive incomes lower than $20,000. Over 50% receive incomes less than $40,000. So again, people have this mistaken notion that you need lots of money to start your path to wealth. And that’s not true. The other thing is, 73% of our participants are women. Empirically, women are actually better at investing than men are. But if you ask women, nine out of 10 women say that men are better.

Part of our job is to create visions that people can see a path going forward. I’ve had more than one family thank me for showing them a path out of poverty, because they didn’t know how to do it. It’s not like people don’t want to get out of poverty. They just don’t know how to do it.