If you’re not sure how diversity and financial wellness are correlated, check out these eye-opening statistics to understand the link
Diversity, equity, and inclusion (DEI) and financial wellness are closely intertwined. Here are 6 eye-opening statistics to help you better understand the relationship between these concepts.
Want to dive deeper? Download our free eBook “Delivering Through DEI: How Financial Wellness Can Help Your Diversity, Equity, and Inclusion Strategy”
1. 57% of Black or Latino people have never seriously considered joining the financial services industry (Source)
It’s well known that there are many barriers to DEI in the financial services industry—from a lack of equitable hiring practices to the high costs required to become a certified professional. These barriers are harmful because, as you’ll see in the following statistic, it leads to a lack of representation among financial professionals.
2. Black and Latino CFP® professionals make up less than 5% of all CFP® professionals (Source)
It’s critical for financial professionals to represent a diverse range of backgrounds. Why? It gives people the option to work with someone who can relate to them personally and professionally.
For example, let’s say you offer a financial wellness benefit that connects employees to CFP® professionals. Your Black employees may feel more comfortable working with a Black advisor who understands the economic and cultural nuances of their situation. While this may not always be the case, you want to give your employees the ability to choose.
Editor’s note: Are you pursuing your CFP® certification? Apply for a $5,000 scholarship through the Origin Diversity Program Scholars Fund. The application deadline is November 30, 2021.
3. Due to the pandemic, People of Color are disproportionately concerned about their financial situation, including housing, student loans, and childcare (Source)
What does this imply for your workforce? It means that your Black, Latino, and other employees are dealing with large amounts of financial stress, which can directly impact their health, lead to a loss of productivity, and limit the extent to which they can enjoy their day-to-day life. And it doesn’t just hurt your workers. Financial stress costs employers an estimated $250 billion per year.
4. Black, Brown, and low-income students have less access to personal finance education (Source)
Research shows that a personal finance education helps people avoid payday loans, have better credit outcomes, and reduce credit card debt. Even though money habits are set by the age of 7, and it’s clear that financial education is key to achieving financial wellness, most U.S. schools don’t offer this type of curriculum—especially to students of color and students from low-income families.
NextGen Personal Finance found that, while 1 in 9 students will take a standalone personal finance course prior to high school graduation, this number dips significantly among students in schools with 75%+ Black and Brown students or 75%+ free and reduced lunch eligibility. That’s why employers need to address this knowledge gap and educate their employees about their finances.
5. Women consistently report lower financial confidence than men (Source)
Women disproportionately respond “do not know” to questions measuring financial knowledge. But what’s telling is that when this response option is unavailable, they often choose the correct answer.
This confidence gap can play a significant role in the financial futures of women. For instance, your female employees may be less likely to participate in wealth-building activities (like investing in the stock market) because they underestimate their ability to make sound financial decisions.
6. Families of color have lower wealth than White families (Source)
According to the Federal Reserve, Asian, American Indian, Alaska Native, Black, Hispanic, Native Hawaiian, Pacific Islander, and all respondents reporting more than one racial identification have lower wealth than White families.
This wealth gap results from many complex societal, governmental, and individual factors that have played out over several generations—such as a lack of inter-generational inheritances, homeownership opportunities, and access to employer-sponsored retirement plans.
Hopefully, these statistics highlight the close relationship between financial wellness and diversity. There’s a reason why we encourage employers to invest in both areas to see the most successful outcomes. To learn how to use financial wellness benefits to support your DEI strategy, download our eBook.