Women of Color Taking More Confident Approach to Financial Future

New research shows women of color are forging their own financial narratives to create better outcomes than those of previous generations, according to a new report from Edelman Financial Engines that surveyed women of color in the U.S. on their financial goals.

The report found that 67% of women of color said they were actively making a more secure path. Among respondents, 50% expressed confidence in the direction their lives were heading.

Edelman Financial Engines conducted an online survey of 2,000 men and women, ages 25-64, who identified as African American, Asian American, Hispanic, multiracial, and Caucasian. The interviews and mobile ethnographies surveyed more than 60 women from across the United States, also from various racial groups.

“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,” Rose Niang, director of financial planning at Edelman Financial Engines, said in a statement. “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.”

According to the survey, 48% of women of color reported feeling confident in meeting their long-term financial goals, compared with 38% of their white counterparts. Women of color were also more inclined to approach investing with a risk-taking mindset at 31%, compared with 23% of white women.

According to the research, women of color reported a relaxed or risk-taking mindset when it comes to financial planning, a reflection of greater confidence. In comparison, white women were more likely to report a disengaged mindset.

“I’ve taken the ‘I can do it’ attitude and have learned about investing, and I’m trying to grow my wealth little by little every year,” said Ashley, 28, one of the sources surveyed in the report.

However, women of color reported feeling significantly less confident when dealing with financial professionals, as 42% of respondents said they felt financial professionals did not take them seriously because of their race or gender, significantly more than other gender, racial and ethnic groups surveyed.

When working with a financial planner, 65% of women of color said they prioritized values and cultural alignment, and fully 91% expressed that someone who can understand their values and cultures was important in their choice of a financial adviser.

Women of color also indicated unique financial needs and priorities. They were more interested in having conversations about generational wealth, at 33%, compared with their white counterparts, at 16%. Women of color were also more likely to to prioritize financial support for family and friends, at 13%, versus 6% for white women.

“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,” said 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.”