Research reveals how racial minorities and LGBTQ+ families differ in financial priorities, challenges, and goals
New reports from Merrill Lynch Wealth Management in the U.S. reveals the diversity in how minority communities view and achieve financial success.
In a series of reports titled Diverse Viewpoints: Understanding Affluence in the U.S., the firm drew from surveys conducted by Ipsos, which included more than 450 members each from Black, LGBTQ+, and Hispanic communities, with individuals that have more than $100,000 in investable assets. The research also interviewed leading experts and academics, and surveyed an array of academic publications.
The researchers found that affluent households from diverse communities have increased more quickly than the affluent within the general population. Since 2015, the affluent general population in the U.S. has grown by 53%, compared to 65% for affluent Black or African-American households; 76% among affluent LGBTQ+ households; and 81% for affluent Hispanic or Latino households.
Individuals from affluent Black communities, Ipsos found, were all about hustling: they prioritized securing wealth through entrepreneurship, investing in the businesses of people they know, and supporting family members. They were also two times more likely than other groups to be motivated by a desire for personal achievement, and 25% more likely to be driven by a desire to ensure future generations have what they need to succeed.
And while individuals from African-American communities share many of the same challenges with other groups, they’re twice as likely to prioritize reducing their current debt; 25% more likely to be supporting their family financially; and three times more likely to cite paying for education as a source of stress.
Among LGBTQ+ families, the research found 13% of those from younger generations (20- to 34-year-olds) see having a child as one of their top financial goals, compared to just 5% of those between 35 and 54 years old. In the long run, they’re more likely than the general affluent population (24% vs. 17%) to cite healthcare and long-term-care as a financial priority.
One third of those surveyed said they do not feel their family accepts them, which has prompted 58% of LGBTQ+ respondents to say they’ve had to make their own way to financial independence. For this group, the ability to be authentic by doing the activities they love or living life how they want is a priority, and 45% are more likely to prioritize giving back to and supporting their community.
Finally, the research found affluent members of the Latino community are four times as likely to see supporting their aging parents as their most important financial goal. Beyond that, one in five said that leaving an inheritance to their family is very important.
Compared to the general population, affluent Hispanic Americans were more likely to feel stressed about paying household bills (17% vs. 12%) and striking a balance between supporting others financially and attending to their own needs and wishes (15% vs. 12%). As for motivations, 35% said they are driven by the desire to provide for their family, and they were three times as likely as other groups to be driven by a desire to bring pride to their family.
“Serving a diverse client base requires a deep understanding of people’s unique experiences and financial life paths,” said Andy Sieg, head of Merrill Lynch Wealth Management. “And while we can never really know what it’s like to walk in someone else’s shoes, this research further underscores our commitment to more fully appreciating and reflecting the diverse markets in the communities we serve.”
