Optimism Surges Among Black Investors: Wells Fargo

The survey didn’t find much difference between how Black investors reported on their progress in meeting their financial-life goals compared with investors overall.

Sixty-three percent of Black investors reported paying off debt, compared with 68% of all investors. And 33% reported saving for an inheritance to leave for their children, compared with 36% of investors overall.

Black investors reported somewhat less progress than investors overall in achieving five of six financial life goals. On saving for a child’s college education and educating their children about finances, however, Black investors scored higher — 46% and 84%, respectively versus 40% and 78% for investors generally.

“The data suggests that Black investors have come to the realization that education and financial education are going to be critical to the future success of their children financially,”  Dawkins said.

The study also found that Black male investors are significantly more risk-averse than male investors generally, which affects their ability to build and grow wealth, Dawkins said. He speculated that less access to information about how to invest, coupled with barriers to earning more income and a growing wealth gap, likely contributes to that risk aversion.

Without those resources, “probably the best thing is to be cautious,” Dawkins said. He noted that the findings in the survey about differences between Black investors and investors overall can help advisors understand the nuances and perspectives of those clients and prospects.

Advisors who aren’t aware of those different perspectives and experiences “may miss an opportunity to advise correctly, to meet the needs of their Black clients,” Dawkins said.