Merrill Studies Reveal Challenges Diverse Communities Overcome to Achieve Success and Grow their Wealth

Research Shows Financial Motivations of Diverse Affluent Populations Prioritize Supporting Family and Providing a Better Future for the Next Generation

Merrill Lynch Wealth Management published today three studies examining the affluent Black/African American, LGBTQ+ and Hispanic/Latino communities. The first-of-its-kind research reports titled, “Diverse Viewpoints: Understanding Affluence in the U.S.,” aim to better understand how individuals in these diverse communities achieve success and grow their wealth, their motivations and challenges and goals for the future.

“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.”

Conducted by research firm Ipsos, the studies found that the growth of these diverse affluent households (annual income more than $125,000) is outpacing that of the general population. Since 2015, affluent Black/African American, LGBTQ+ and Hispanic/Latino communities have grown by 65%, 76% and 81% respectively, while the affluent general population has grown by 53%.

While the survey found many commonalities, within each of these communities notable themes emerged, as did differences when compared to the general population of affluent individuals:

Goals

• Black/African American: With respect to their financial life, individuals in this community prioritize supporting family members, investing in the businesses of people they know, and securing wealth through entrepreneurship.
• LGBTQ+: Starting a family is increasingly a goal, with nearly a quarter aspiring to get married and 13% of young LGBTQ+ (20-34 year olds) citing having a child as one of their most important financial goals (compared to 5% of LGBTQ+ 35-54 years old). Longer-term, more members of this community cite paying for healthcare and long-term care as an important financial goal (24% vs. affluent general population 17%).
• Hispanic/Latino: Members of this community are four times as likely to cite that their most important financial goal is ‘planning to assist or support aging parents.’ One-in-five also say leaving an inheritance to their family is very important.

Motivators & Financial Priorities

• Black/African American: Individuals in this community are two times more likely to be motivated by a desire for personal achievement. They are also 25% more likely to be motivated by a desire to set future generations up for success.
• LGBTQ+: Members of this community are focused on being able to live authentically by pursuing activities they love or simply living life the way they want. They are also 45% more likely to view giving back to and supporting their community as a top priority.
• Hispanic/Latino: 35% cite providing for their family as a top personal motivator. They are also three times as likely to be driven by a desire to make their family proud.

Challenges

• Black/African American: Individuals in this community face many of the same challenges as others; however, they’re twice as likely to be focused on reducing their current debt levels; 25% more likely to be supporting their family financially; and three times more likely to say paying for education is a source of stress.
• LGBTQ+: One-third do not feel accepted by their family. As a result, 58% say they’ve had to chart their own path to financial independence.
• Hispanic/Latino: Individuals in this community are more stressed about being able to pay household bills (17% vs. 12%) and balance financially caring for others while supporting themselves (15% vs. 12%).

“Many financial challenges have disproportionally impacted diverse communities in recent years. Through these findings we hope to spark additional, meaningful dialogue with clients and across the industry that furthers our ability to meet the needs of all people and communities,” said Kirstin Hill, chief operating officer at Merrill Lynch Wealth Management.

To advance the conversation, Merrill convened members of the affluent Black/African American, LGBTQ+ and Hispanic/Latino communities for roundtable discussions.

Methodology for “Diverse Viewpoints: Understanding Affluence in the U.S.”

Researchers at the firm Ipsos synthesized and reviewed an array of publications and academic research on the topics of diversity, wealth and inclusion in financial services and beyond. Additionally, interviews were conducted with leading experts and academics. From there, qualitative research was conducted through an Online Community, followed by in-home ethnographies with respondents representing the affluent segment of the Black/African American community, Hispanic/Latino community and the LGBTQ+ community. A quantitative survey was also conducted among more than 450 members of each of the communities, with individuals with more than $100,000 in investable assets. Each community was compared to a representative sample of 1,000 affluent Americans, a group referred to in the reports as the affluent general population. Statistical analysis was conducted on all four groups to ensure representation, accuracy, and completeness.

Merrill

Merrill, which is part of Bank of America Corporation, includes Merrill Lynch Wealth Management and Merrill Private Wealth Management and is a leading provider of comprehensive wealth management and investment services. Merrill specializes in goals-based wealth management, including planning for retirement, education, legacy, and other life goals. Merrill Private Wealth Management serves the unique needs of wealthy individuals, families and their businesses through 200 highly specialized private wealth advisor teams, along with specialists in areas such as investment management, concentrated stock management and intergenerational wealth transfer strategies. Merrill is one of the largest wealth management businesses in the world, with approximately $3.1 trillion in client balances as of June 30, 2021. Client balances consists of the following assets of clients held in their Merrill accounts, including assets under management (AUM) of Merrill entities, client brokerage assets, and assets in custody of Merrill entities, as well as loan balances and deposits of Merrill clients held at Bank of America, N.A. and affiliated banks.

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