Key findings snapshot:
- Fewer BIPOC respondents are receiving help from a financial professional than they did in 2021 (24% Black/African American, down from 38%; 35% Hispanic, down from 44%; 32% Asian/Asian American, down from 36%)
- Fewer BIPOC respondents said they feel prepared to financially support the various things they’d like to do or the passions they’d like to pursue over the course of their life compared to white respondents (62% Black/African American; 68% Hispanic; 72% Asian/Asian American; vs 78% white)
- More BIPOC respondents who have never worked with a financial professional are open to working with one (37% Black/African American, up from 32% in 2021; 34% Hispanic, up from 30% in 2021; 39% Asian/Asian American, up from 34% in 2021)
MINNEAPOLIS – Sept. 28, 2022 – Despite the significant financial challenges brought on by the pandemic over the past two years, Americans who identify as BIPOC (Black, Indigenous, and People of Color, including Hispanic and Asian/Asian Americans) report receiving less professional assistance than they did a year ago, according to the 2022 Retirement Risk Readiness Study* from Allianz Life Insurance Company of North America (Allianz Life).
Each BIPOC community identified in the study noted a decline in working with a financial professional from 2021. At the same time, the engagement of white Americans with financial professionals remained steady (48% in 2022 vs. 49% in 2021):
- 24% Black/African American, down from 38% in 2021
- 35% Hispanic, down from 44% in 2021
- 32% Asian/Asian American, down from 36% in 2021
The lack of engagement with financial professionals could be causing feelings of unpreparedness. Fewer BIPOC respondents said they feel prepared to support financially the various things they’d like to do or the passions they’d like to pursue over the course of their life compared to white respondents (62% Black/African American; 68% Hispanic; 72% Asian/Asian American; vs 78% white).
“We know these past two years of managing through the pandemic have only served to exacerbate the racial wealth gap, so it’s discouraging to see that BIPOC communities aren’t getting a higher level of financial planning help compared to last year,” said Travis Walker, business solutions and diversity consultant for Allianz Life. “There is tremendous opportunity for the financial services industry to use this opportunity to build stronger relationships with BIPOC clients, because the interest is there.”
Engagement down but consideration up
Although fewer BIPOC respondents are currently getting professional help with their finances, the number who are open to working with one in the future is on the rise.
The percentage of BIPOC respondents who have never used a financial professional but said they would consider using one grew for each group: 37% for Black/African American respondents, up from 32% in 2021; 34% for Hispanic respondents, up from 30% in 2021; and 39% for Asian/Asian American respondents, up from 34% in 2021.
Specialized assistance to meet evolving needs
Greater interest in working with a professional is a positive trend for the financial services industry as specific financial planning needs for each BIPOC community have likely evolved during the pandemic, dictating the need for more specialized professional assistance.
For Black/African American respondents, declining confidence in being able to financially support all the things they want to do (71% vs 77% in 2021) has them finding more value in working with a finpro on short-term planning issues as well as pursuing a nontraditional “work to retirement” path:
- Interest in getting help with balancing a budget – 37% vs 27% white; 30% Hispanic; 29% Asian/Asian American
- Find value in getting help with paying down debt – 31% vs 20% white; 29% Hispanic; 20% Asian/Asian American
- Find value in pursuing a non-traditional path where you try different things at different times in life (e.g., you work, take breaks, go back to school, volunteer, etc.) – 57% vs 45% white; 52% Hispanic; 49% Asian/Asian American
Hispanic respondents are more likely than others to regret some financial decisions they are making during the pandemic, and more likely to seek assistance with managing finances to support their family:
- Regret taking money out of retirement accounts – 21% vs 15% white; 13% Black/African American; 7% Asian/Asian American
- Likely to seek assistance with leaving a legacy to family – 28% vs 19% white; 18% Black/African American; 20% Asian/Asian American
- Likely to seek assistance with staying in their home – 20% vs 10% white; 11% Black/African American; 11% Asian/Asian American
Asian/Asian American respondents are more likely than others to find appeal in working with a financial professional who provides holistic financial services to help them meet their retirement goals and are more worried about maximizing their financial benefits in retirement:
- Preference for holistic financial services – 51% vs 41% white; 50% Black/African American; 44% Hispanic
- Worried about the rising cost of living preventing them from enjoying retirement – 73% vs 58% white; 60% Black/African American; 69% Hispanic
- Worried about market downturns hurting their nest egg – 69% vs 58% white; 47% Black/African American; 68% Hispanic
“This study continues to illustrate how the experiences BIPOC Americans have in managing their finances are constantly changing, and that our industry needs to keep pace,” added Walker. “As risks to retirement increase in frequency and severity, it’s important that BIPOC Americans view financial professionals as trusted partners who can help them accomplish both their short- and long-term financial goals.”
*Allianz Life conducted an online survey, the 2022 Retirement Risk Readiness Study, in February 2022 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k.
The study included an oversample of respondents who identified as Black/African American (388 responses); Hispanic (355 responses); Asian/Asian American (373 responses).
