Understanding the Investing Experience of Black, Latinx Women Earning Low and Moderate Incomes

Our new report, “Mapping the Investor Journey: Research and Insights on the Experience of Women Earning Low and Moderate Incomes,” summarizes insights from Commonwealth’s research on the investing ecosystem experiences of investors who are Black and Latinx women who earn low and moderate incomes. It also includes personas and investor journey map insights for investing industry stakeholders to develop a better understanding of the needs, barriers, aspirations, and opportunities of investors within this space. 

Navigating a Confusing Landscape

From a retirement plan or Health Savings Account (HSA) offered through workplace benefits, to a 529 plan to start saving for a child’s college education, consumers are inundated with options to save and invest for both the near-term and the future. This confusing landscape can be especially complex for those with limited resources for savings, specifically for Black and Latinx women living on low to moderate incomes (LMI) who have been historically excluded from using the investing ecosystem as a channel to build wealth.  

The U.S. Department of the Treasury reported that white households are 5x more likely to own non-retirement investments (such as stocks, bonds, and mutual funds) than Black or Hispanic/Latinx households in the lowest income quartiles. Stakeholders in the investment ecosystem have an opportunity to not only gain business from this customer segment, but also to design products within the investing ecosystem specifically for them, and make those tools easily accessible. This is especially pertinent because the majority of women in these groups want to invest: 78% of Black women and 72% of Latinx women surveyed by Commonwealth were interested in investing.  

78% of Black women and 72% of Latinx women surveyed by Commonwealth were interested in investing.

Commonwealth conducted focus groups followed by in-depth interviews to better understand the experiences of Black and Latinx women living on LMI who are navigating the investing ecosystem, with a focus on programs,  platforms, and properties.

For a look at the more comprehensive landscape, including a detailed look at the tools available in the investing ecosystem, see part one of this research.  

Key Insights from the Report

For Mapping the Investor Journey, personas and investor journey maps were developed based on the data gathered, which can be used by investing industry stakeholders to better understand the preferences and struggles of this audience. The personas and journeys can be used as examples of end users’ common experiences as providers continue to innovate within this space.

The key insights that were identified for continued innovation within the investing ecosystem include: 

  • Simplifying and integrating platforms will help demystify and untangle the investing ecosystem
  • Investors living on LMI could benefit from a clear investing pathway for their specific needs and situations
  • Distribution channels and messaging must meet investors who are women of color living on LMI where they are at
  • There is a lack of trusted, easy-to-access educational opportunities for investors early in their journeys
  • Investing is not a linear journey for people living on LMI

Read the full report to learn more about the personas that we have developed from focus groups and interviews on the topic of investing, with the goal of making the investing ecosystem more inclusive.

This blog post is an excerpt from the report’s executive summary.

If you are interested in working with Commonwealth to continue building this body of impactful research focused on building a more inclusive investing ecosystem, please reach out to info@buildcommonwealth.org.

This work is made possible by the generous support of the Wells Fargo Foundation.