Recognizing the importance of early investing for greater wealth building, Commonwealth will engage with financial institutions, fintechs, and other stakeholders to identify opportunities that will meet the needs of college students from or living on LMI who are interested in investing. This research is the first step in the process aimed at exploring what those needs are, how to address them, and what solutions are available to help college students get started in their investing journey.
Investing is a proven path to wealth building, especially for young adults who can maximize long-term wealth building through early investing and compounding interest. However, millions of people living on low to moderate incomes (LMI) do not participate in the investment marketplace—including LMI college students who may also be grappling with student debt, lack of awareness of investment options and exposure, and other systemic barriers to investing despite showing interest. Among individuals who are of college age (18-25), only 18% are investing.
Building upon our previous research which mapped the modern investing landscape, and created personas and investor journeys of women investors of color living on LMI Commonwealth is looking to understand a new persona—the college investor.
In a new area of research, Commonwealth will explore the needs, wants, and aspirations of college student investors from LMI backgrounds ultimately aiming to ensure that financial institutions and fintechs are fostering engagement and driving the creation of a more inclusive investor ecosystem for college students from/with LMI. The research will include a nationally representative 1,000-person survey—launching in mid-March 2024—focus groups, a final research report to identify barriers and opportunities in early investing, and an outreach campaign to fintechs and other stakeholders. We are actively seeking 3-5 mission-aligned colleges/universities and/or fintech partners to help us reach the students we aim to impact across the U.S.
In the fall of 2022 there were an estimated 15 million students enrolled in undergraduate programs and according to FAFSA over 85 percent of students receive some form of financial aid. A Federal Reserve study emphasizes how market participation is higher for those with post-secondary education, reporting higher rates for individuals without student debt. We see a tremendous opportunity to understand the needs of the college student market and we hope that this project will identify what foundation is needed to create opportunities for long-term wealth-building among young adults, empowering them to invest in their future.
This research is part of Commonwealth’s broader wealth-building effort to enable innovative, equitable, and inclusive investing opportunities and solutions for individuals from LMI households.
This project is made possible thanks to the generous support of Wells Fargo Foundation.