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Research Paper

Closing the Racial Wealth Gap With Financial Asset Ownership

A new program aims to equip Black students with the tools and confidence to participate in the stock market.

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By MK Falgout, Trey Waters, Heidi Johnson, Necati Celik, Ph.D.

Category:

Equity, Measurement

Monday, February 3, 2025

Closing the Racial Wealth Gap With Financial Asset Ownership

Reducing Barriers to Investing for Black Students

Wealth takes time to build, but for Black families, access to wealth-building tools has been hindered by a long history of discriminatory policies and practices. Today, Black households are three times less likely than white households to participate in the stock market.

Stackwell, Student Freedom Initiative, and Prudential Financial launched the Student Investment Program (SIP) to address the expanding racial wealth gap in America. The initial program provided over 400 students at Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MSIs) with investment education, access to an investing platform, and funded investment accounts. The Financial Health Network evaluated the pilot program to understand how it shaped students’ investing behaviors, attitudes, and financial health outcomes.

Our findings show that programs like SIP show promise for promoting equity, closing the racial wealth gap, and building financial health for all.

Outcomes at a Glance

Nearly twice as many students reported feeling comfortable making investment decisions.

By the end of the program, 84% of women felt investing is for “people like me.”

Almost 2.5 times more students reported a high degree of knowledge about investing.

The number of students who felt on track to reach their long-term financial goals increased from 40% to 65%.

Data Spotlight

Women’s investment knowledge, comfort, and connection increased dramatically during the program.

“The findings we share… reinforce a simple yet profound truth: representation matters. Through their engagement with Stackwell, participating students were encouraged and empowered to participate in ways many in the Black community never have before – underscoring the impact of initiatives like SIP. Closing the racial wealth gap through greater access to ownership of financial assets isn’t just a moral imperative – it’s a trillion-dollar economic opportunity. As leaders, we have the resources and responsibility to drive this change.”

Trevor Rozier-Byrd

Founder and CEO, Stackwell

About Our Methodology

This research relied on three different data sources:

- Two surveys of students who were invited to sign up for the Stackwell app
- Administrative data from the Stackwell app
- Focus groups of students who signed up for the Stackwell app

All data were collected at the individual level and de-identified. Survey responses and administrative data were linked to provide a more comprehensive picture of app users’ experiences. For more background on our study sample and methodology, please see the full report.

Our Partners

This report was developed with support from Stackwell and in partnership with Prudential Financial and the Student Freedom Initiative. The insights and opinions expressed in this report are those of the Financial Health Network and do not necessarily represent the views or opinions of our partners, funders, and supporters.

Endnotes

Julie Bennett and YiLi Chien, “The Large Gap in Stock Market Participation Between Black and White Households,” Federal Reserve Bank of St. Louis, March 2022.

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