Study: race and ethnicity can impact financial views and worries

June 14, 2023

traditional family of four eating dinner at a table

People often struggle with conversations about differences in experiences among people of varying racial and ethnic groups. 

It can be challenging on many levels to acknowledge differences. But recognizing diverse experiences, attitudes and concerns can be a first step toward delivering more equitable experiences that help plan participants and their families improve their financial wellbeing and meet their individual goals.

In financial services, representation matters. That’s why TruStage/Cuna Mutual Group has taken steps to conduct research in ways that lead to more inclusive data — and it’s why diversity, equity and inclusion are a focus both inwardly among our own employees and outwardly with respect to those we serve.

With our 2022 What Matters NowTM report, we wanted to start cultivating a better understanding of the different ways hopes, dreams and worries affect people. Why? We’re focused on helping plan sponsors and financial professionals meet participants and employees where they are and connect them with the tools, resources and financial products that help them meet their goals and achieve a more secure financial future.

Starting with shared experiences

It’s no surprise to learn that worries have been on the rise among all racial and ethnic groups — and not just financial worries. By and large, the majority of survey respondents agree that they want their children to achieve more, in terms of financial attainment, than they have in their own lives.1

Yet a shared concern over financial wellbeing can be expressed in different worries across various groups. For example, Black, Hispanic and White consumers said they worry more about having enough money to care for loved ones, while a majority of ethnic Asian consumers said their biggest worry is about saving for their kids’ college expenses.1

How the insight matters: While it can be comforting to focus on thoughts and feelings in common, it’s important to do the emotionally demanding work to connect and empathize with plan participants, whether or not they share your priorities. It’s fundamental to the idea of meeting every person where they are and building on a foundation of respect. When you can identify with someone on a personal level, you’re more likely to be able to connect the individual with the resources, services and products they need most.

Consider multiple points of view when examining investment and program options

The financial industry hasn’t always made room for diverse needs. So it’s not hard to believe that many people end up working with multiple financial institutions to get their needs met. But here are a few findings you might not have expected:1

  • Hispanic consumers reported being more likely to have debit cards
  • Black consumers are more likely to leverage loans, life insurance, and payment protection (with a stronger preference for protecting auto loan payments)
  • Asian consumers are more likely to access checking, credit cards and investments
  • Native American consumers generally use fewer financial products overall
  • White and Multiracial consumers are most likely to say they already work with an advisor

Along with these differences in financial product and service preferences, it’s important to recognize a wider range of ways people work and get paid beyond the typical nine-to-five or 40-hour workweek. Today, many people across demographic groups work more than one job, and Multiracial and Black consumers were among the most likely groups to own their own businesses.1 

Let those employees’ dedication and willingness to work hard and shoulder risk inspire you and inform your plan choices. Help them optimize financial outcomes by making sure your investment options and educational resources are appropriate for their needs.

Choose relevant programs and investment options: Multiple jobs, side hustles and entrepreneurship can spark specific needs that regular salary and/or wage workers may not have. Access to educational resources and tools, as well as insights into investment choices, can help them make the most of their extra earnings over the long term.

Representation matters

Digital access has long since gone from nice-to-have to a must. In fact, no matter their income level, a significant proportion of consumers (43%) say they check their accounts daily.1

And it’s not only their own finances consumers are checking online. Multiracial and Black consumers were more likely to take a look at a financial services provider’s online presence before deciding whether to work with them.1 That goes beyond just a website and/or mobile app. What people see in marketing messages, on social media and in the press can have an impact on whether an individual sees a place for themselves working with you.

Looking inward is just as important. A company’s ability to recruit and retain people from diverse backgrounds tells prospective new hires plenty without saying a word. The same goes for advisors.

Ask yourself: What do plan participants see during interactions, or read in communications and materials you provide?

Across the board, non-White groups were less satisfied with their primary financial institutions’ ability to promote culturally relevant products and services. They were also less satisfied with the extent to which financials represent their cultures and developing culturally relevant marketing messages.1

Be the change: Employers and plan advisors have an important opportunity to bridge gaps and better meet the wide range of participants’ financial needs. Ensure that your diversity, equity, and inclusion (DEI) efforts go beyond words. Solicit feedback and get a read on the offerings in greatest demand — and then act on the information you get.

Maybe the biggest takeaway from the 2022 What Matters Now Report is the importance of authenticity. It’s easy for employees to spot the difference between an employer or advisor who knows how to talk the talk and those who truly walk the walk. It’s a worthwhile effort to connect authentically with employees and plan participants, and to do all you can to create a retirement plan offering that can help make a difference in their financial futures.

TruStage / CUNA Mutual Group, 2022 Research Report: What Matters Now.