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Ariel-Schwab Black Investor Survey (2020)

New survey compares attitudes and behaviors on saving and investing among Black and white Americans.

The results of the 2020 Ariel-Schwab Black Investor Survey reveal that Black Americans are not benefitting from stock market growth at the same rate as white Americans at similar income levels. The deep-rooted gap in participation between the groups persists, with 55 percent of Black Americans and 71 percent of white Americans reporting stock market investments. This disparity, compounded over time, means that middle-class Black Americans will have less money saved for retirement and less wealth to pass onto the next generation than their white peers.

For more than 20 years, the Ariel-Schwab Black Investor Survey has compared attitudes and behaviors on saving and investing among Black and white Americans. African American participation in the stock market stands at its lowest level in the history of the survey.

In a year like no other, however, there is also evidence of growing engagement in the stock market by younger Black Americans, with 63 percent under the age of 40 now participating in the stock market, equal to their white counterparts. The closing of this gap among younger investors is being driven by new investors: three times as many Black investors as white investors (15% vs. 5%) report having invested in the market for the first time in 2020. Twenty-nine percent of Black investors under the age of 40 were new to investing in 2020 compared to 16 percent of whites.

401(k) Plans and Beyond

Over the last several decades, 401(k) plans have become an important gateway to investing for many Black Americans, with 63 percent of Black investors having first invested in the stock market through a retirement plan. Ownership rates of 401(k) plans are now similar between Black and white Americans (53% vs. 55%). But savings rates show meaningful differences. Specifically, white 401(k) plan participants invest 26 percent more per month toward their retirement accounts than Black 401(k) plan participants ($291 vs. $231).

Beyond investing, the survey finds that Black Americans are less likely than white Americans to own almost every kind of financial vehicle, with the exception of whole life insurance, which is favored in the Black community. They are also less likely than white Americans to have written wills, financial plans, or retirement plans.

For Black Americans, disparities grow every month; while they save $393 overall per month, whites are saving 76 percent more, at $693 per month. Even Black Americans who earn more than $100,000 a year consistently save or invest considerably less than their white counterparts at the same income level.

Trust Remains an Issue

Trust in the financial services industry continues to affect stock market participation among Black Americans. While similar proportions of Black and white investors believe that financial services institutions are not trustworthy (23% vs. 20%), only 35 percent of African American investors feel they are treated with respect by financial institutions versus 62 percent for white investors. Additionally, Black Americans are considerably more likely to cite the importance of racial diversity within the employee ranks at investment firms (63% vs 27%).

Black Americans are less likely to work with financial advisors (21% vs. 45% of whites), but the majority of Black investors who do work with a financial advisor say they feel like they are treated with respect by financial institutions, and he believes that encouraging these relationships will lead to positive change.

Belts Tightened but Optimism Prevails

The pandemic, not surprisingly, affected Black and white Americans in different ways financially. While both groups report a sharply increased focus on saving for emergencies compared to prior years, the pandemic's impact on the economy caused Black Americans to take action in greater numbers than white Americans.

Despite this, a sizable minority of Black Americans—and significantly more than white American—were forced to tap their savings to make ends meet. More than twice as many Black 401(k) plan participants (12% vs. 5%) borrowed money from their retirement accounts. Almost twice as many Black Americans (18% vs. 10%) dipped into an emergency fund. And nine percent of Black Americans (vs. 4% of white Americans) say they asked their family or friends for financial support in 2020, while 18 percent of Black Americans and 13 percent of white Americans acknowledged giving financial support to family and friends last year.

Black Americans remain optimistic: when asked to forecast their personal financial situation in 2021 compared to 2020, 60 percent of Black Americans say they feel their situations will improve, compared to only 40 percent of white Americans who felt the same way.

This optimism, coupled perhaps with the unique circumstances of the 2020 market, created an opportunity for historically underinvested Black Americans to help one another learn more about investing, and Black Americans are now much more likely to discuss the stock market with their families than in years past.

  Black Americans White Americans
Discussed Stock Market Growing Up 10% 23%
Discuss Stock Market Now 37% 36%

These dinner conversations appear to be paying off: more than twice as many Black investors under the age of 40 (18% vs. 7% of older Black investors) say they discussed the stock market growing up. Overall, about half of all Black investors (49%) say they are the first in their families to ever invest, compared to 39 percent of white investors.

You can read more about the Ariel-Schwab Black Investor Survey findings here.

About the survey

The online survey was conducted in December 2020 by Helical Research among 2,104 Americans age 18 and older with $50,000 or more household income in 2019. The margin of error for the total survey sample is two percentage points. Historical survey data can be found here. Detailed survey findings can be found here.

About Ariel Investments

Ariel Investments, LLC is a global value-based asset management firm founded in 1983. The firm is headquartered in Chicago, with offices in New York City, Washington, D.C., and Sydney. As of January 31, 2021, Ariel's firm-wide assets under management totaled approximately $15 billion. The firm serves individual and institutional investors through five no-load mutual funds and 11 separate account strategies. For more information, please visit Ariel's website at

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