By Joy Stephens, JPMorgan Chase Washington D.C. Market Director – Wealth
Everyone has their own personal relationship with money. The how, what and why to investing varies from person to person. J.P. Morgan Wealth Management recently published its Diverse Investor Study to understand these different preferences and, ultimately, help better serve the needs of all investors. We surveyed more than 2,000 Americans across race, gender and wealth levels to find out what matters most to them when it comes to investing.
The study found unique preferences among Black and Hispanic respondents in particular: a preference for more control, an emphasis on social impact and a desire to create generational wealth.
Here are a few key takeaways from our research:
More control over investments
Everyone’s approach to investing is different. Some investors might prefer to do it themselves, while others may want to work with a financial advisor for professional support. It’s important to understand which investing approach works for you and your unique needs.
Our study found that Black and Hispanic respondents prefer to have more control over their investments. 59% of Black respondents and 57% of Hispanic respondents say they want to take an active role in selecting the stocks, bonds or funds that make up their investment portfolio, compared to 46% of White respondents. They also check their accounts more frequently than respondents overall – two in three Black and Hispanic respondents check their accounts often compared to 56% of all surveyed.
These findings suggest that Black and Hispanic investors want to be involved in the investing process and regularly updated on their financial situation.
Social impact
Investing is personal. Your unique financial roadmap is based on a number of factors, such as your short-term and long-term goals, your investing timeline and your risk tolerance. For some people, your values might also be an important factor to consider.
We found in our research that purpose is especially important to Black and Hispanic respondents – they care more about the social impact of the companies they’re investing in than other respondents.
According to our study, Black and Hispanic respondents say it’s important that their investments:
are Black, Indigenous and People of Color (BIPOC)-owned, started, and/or operated (70% and 46%, compared to 27% of White and 31% of Asian),have a positive environmental impact (72% for both Black and Hispanic, compared to 55% of White and 57% of Asian),are women-owned, started, and/or operated (60% and 48%, compared to 30% of White and 40% of Asian), promote gender and racial equity and diversity (66% and 54%, compared to 35% of White and 42% of Asian)
Generational wealth
What are you investing for? You could be investing to work towards the goal of a comfortable retirement, your child’s future college costs, or to leave a legacy that lives beyond yourself. Perhaps you’re investing toward several different life goals at the same time.
Our study found that investing to build a legacy and create generational wealth is particularly important to Black and Hispanic investors, who say one of the main reasons they invest is to give their children a better life (45% and 51%, compared to 29% of White investors).
Despite this desire to give to future generations, the percentage of respondents who have wills is low across the board. Our study found that 80% of respondents do not have a will, and three in five respondents have taken no action on their estate planning. Black and Hispanic respondents are less likely to have wills than White respondents (14 and 9%, compared to 26%).
Planning for your estate is an important part of your overall financial strategy. If you haven’t, consider working with a legal professional to help prepare for your future legacy.
Why it matters
J.P. Morgan Wealth Management is focused on bringing in people who have historically been underserved by the financial services industry and helping empower them to build wealth. We are committed to better serving the needs of all investors, and this research is a crucial part of that effort. By better understanding the different priorities and investing preferences across various identities, we can better serve them and their unique needs.
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Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved. Past performance is not a guarantee of future results.
JPMorgan Chase & Co., its affiliates, and employees do not provide tax, legal or accounting advice. Information presented in this article is not intended to provide, and should not be relied on for tax, legal and accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction.
The views, opinions, estimates and strategies expressed herein constitutes the author’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan. This information in no way constitutes J.P. Morgan Research and should not be treated as such. You should carefully consider your needs and objectives before making any decisions. For additional guidance on how this information should be applied to your situation, you should consult your advisor.
J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.
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