New Research From Edelman Financial Engines Shows Women of Color are Forging a More Positive Financial Path Forward

• 67% are avoiding certain financial behaviors they saw growing up
• 50% express confidence in the direction their lives are heading

BOSTON--(BUSINESS WIRE)--Edelman Financial Engines, America’s top independent wealth planning and investment advisory firm,¹ today released new research findings that reveal how many women of color in the United States are committed to writing their own financial narratives to create better outcomes than those who came before them. According to the study, approximately two out of three (67%) women of color said they were actively forging a more secure path while avoiding the financial behaviors they witnessed growing up.

The report, entitled Women of Color & Wealth: Striving to Create a New Financial Future^*, provides key insights into the financial goals of this underserved group, and how employers and financial planners can best support them on their journey to building greater knowledge and wealth.

“Beyond the broader financial disparities women have traditionally encountered, those of color have faced additional obstacles, including larger wage gaps, a lack of tailored financial literacy resources, and a general lack of trust in the industry,” noted Rose Niang, Director of Financial Planning at Edelman Financial Engines. “Despite these hurdles, our study reinforced a number of areas where progress is being made – specifically with developing greater financial confidence and a positive economic outlook.”

A Growing Foundation of Confidence…with Opportunity for Greater Support

According to the data, 67% women of color felt confident in their ability to earn money, and 50% said they were also confident in the direction their lives were heading.

Compared to their white counterparts, more women of color were likely to feel confident in their ability to meet long-term financial goals (48% vs. 38%). They were also more likely to approach investing with a risk-taking mindset (31% vs. 23%) and slightly more confidence (27% vs. 23%).

Still, the research reinforced that opportunities continue to exist with closing financial gaps and getting professional financial planning and investment guidance. For example, the data showed that only 28% of women of color reported feeling confident about their financial planning and investments, compared to 53% of their male counterparts. Additionally, 42% did not feel like they were taken seriously by financial professionals because of their race or gender – far more than other gender, racial and ethnic groups surveyed.

Financial professionals can offer support in areas where women of color express unique needs and priorities. Overall, the data showed that this group is more interested than their white counterparts in having generational wealth conversations (33% vs. 16%) and more likely to prioritize offering financial support to a family member or friend (13% vs. 6%).

Women of color also prioritize values and cultural alignment more prominently when working with a planner, with 65% saying these values are very or extremely important, compared to 45% of white women. An overwhelming majority of women of color (91%) reported that it’s important for their financial planner to understand their values and cultures.

How Employers and Planners Can Help

Employers that provide tailored financial advice and guidance solutions to employees – including women of color – may have a better chance of building trust, improving workplace satisfaction and security, and reducing turnover. Employee resource groups (ERGs) can also be an effective conduit by creating inclusive, judgement-free communities where women feel comfortable talking about their needs, and employers can provide curated, relevant content.

“As women of color continue to take greater control of their own financial journeys, it’s more important for employers and planners to listen carefully and understand how to address their unique needs,” added Niang. “Having a wide array of solutions, and fostering open, honest discussions that educate without casting judgment can build confidence and lead to better outcomes, especially with underserved populations.”

Edelman Financial Engines provides solutions that are focused on offering a deeper level of help for employers and their employees, especially those who need it most. The offering aligns with employer Diversity, Equity and Inclusion initiatives, through targeted content and programs. The solutions are developed around the concept of “people like me” – and grew from Edelman Financial Engines’ in-depth research with employees and advisors and content designed to serve the unique needs across demographic groups.

Edelman Financial Engines is hosting a webinar panel to discuss and share more findings on March 29, 2023, at 2:00p.m. ET Registration and more details can be found here.

* Edelman Financial Engines set out to explore the unique stories and needs of women of color through extensive quantitative and qualitative research, with a focus on the ways employers can better support them on their individual journeys. The findings are based on an online survey of 2,000 men and women, ages 25-64, who identify as African American, Asian American, Hispanic, multiracial, and Caucasian, as well as interviews and mobile ethnographies with more than 60 women from across the United States, who identify as African American, Asian American, Hispanic, Caucasian and multiracial.

About Edelman Financial Engines

Since 1986, Edelman Financial Engines has been committed to always acting in the best interests of our clients. We were founded on the belief that all investors – not just the wealthy – deserve access to personal, comprehensive financial planning and investment advice. Today, we are America’s top independent financial planning and investment advisory firm, recognized by Barron’s,¹ with 145+ offices² across the country and entrusted by more than 1.3 million clients to manage more than $242 billion in assets.³ Our unique approach to serving clients combines our advanced methodology and proprietary technology with the attention of a dedicated personal financial planner. Every client’s situation and goals are unique, and the powerful fusion of high-tech and high-touch allows Edelman Financial Engines to deliver the personal plan and financial confidence that everyone deserves. For more information, please visit EdelmanFinancialEngines.com.

¹ The Barron’s 2022 Top 100 RIA Firms list, a seven-year ranking of independent advisory firms, is qualitative and quantitative, including assets managed by the firms, technology spending, staff diversity, succession planning and other metrics. Firms elect to participate but do not pay to be included in the ranking. Ranking awarded each September based on data within a 12-month period. Compensation is paid for use and distribution of the rating. Investor experience and returns are not considered. The 2018 ranking refers to Edelman Financial Services, LLC, which combined its advisory business in its entirety with Financial Engines Advisors L.L.C. (FEA) in November 2018. For the same survey, FEA received a precombination ranking of 12.

² Edelman Financial Engines data, as of Dec. 31, 2022.

³ Edelman Financial Engines data, as of Dec. 31, 2022.

© 2023 Edelman Financial Engines, LLC. Edelman Financial Engines® is a registered trademark of Edelman Financial Engines, LLC. All advisory services provided by Financial Engines Advisors L.L.C., a federally registered investment advisor. Results are not guaranteed. AM2785016