Asian American Financial Experience - Prudential Financial

2016 Prudential Research

ASIAN AMERICAN FINANCIAL EXPERIENCE

KEY FINDINGS

ASIAN AMERICANS FINANCIAL

33

%

ARE CAREGIVERS FOR FAMILY MEMBERS The Asian American financial experience is influenced in almost every respect by the importance of family. For many in the Asian American community, financial decisions are weighed against or influenced by their responsibilities to and aspirations for their families, including not just their children but also their parents, grandparents and other extended family, according to survey respondents. Twenty-five percent of Asian Americans surveyed say taking care of family members is a financial priority, versus 15% of the general population. Their words are backed by their actions: One in five Asian Americans responded that they provide financial assistance to relatives, and one in three act as caregivers for someone other than their children.

$87K 1in3 MEDIAN HOUSEHOLD INCOME

Many Asian Americans have the financial wherewithal to take on those family responsibilities. Asian Americans surveyed have median household income of $87,000, versus $62,000 in the general population. Excluding their primary residence or any business they might own, Asian Americans estimate the value of their household financial assets at $445,600 on average, versus $385,500 for the general population.

OWN INDIVIDUAL STOCKS

Asian Americans are more inclined than the general population to own individual stocks and buy or trade them online. Nearly one in three Asian Americans surveyed owns individual stocks, compared with only about one in four members of the general population. A quarter of Asian Americans indicate having bought or traded stocks online within the past year, compared with 16% of the general population.

EXPERIENCE BY THE NUMBERS

64.6 AGE THEY EXPECT TO RETIRE

Asian Americans plan to retire at age 64.6, on average, or 15½ months earlier than their general population counterparts, who plan to retire at age 65.9. This reflects an overall higher level of confidence in their financial health. Like most Americans, Asian Americans rank retirement-related goals as their top financial priority.

% 69

VIEW THEMSELVES AS NOT WELL PREPARED TO MAKE FINANCIAL DECISIONS Asian Americans are relatively confident about their financial health and prospects, but slightly less likely than the general population to view themselves as financially knowledgeable. Only 31% consider themselves “very well prepared” to make financial decisions, essentially in line with the 33% of the general population who feel the same. The most common reason Asian Americans cite for not being prepared to make financial decisions is not consulting a financial professional, followed by being unsure about what to consider when evaluating their options, not knowing what options are available to them, and not having enough education on managing personal finances.

FEWER THAN

1in5

WORK WITH A FINANCIAL PROFESSIONAL Relatively few Asian Americans engage a financial professional for help—although 43% are willing to consider it. Just 18% work with a financial professional right now, compared with 26% of the general population. The reasons they selected include “fees are too high,” “I don’t feel I have enough assets” and “I prefer to do it on my own.” More so than the general population, though, Asian Americans responded that they “have never found one I can trust.”

Foreword Prudential’s newest and largest study of the Asian American and Pacific Islander1 financial experience provides fresh insights into the nation’s fastest-growing population segment. It is a community that is culturally diverse—Asian Americans originate from more than 40 countries, include native Hawaiians and other Pacific Islanders, and speak dozens of languages. However, study results indicate that they are united by a shared focus on the financial progress, stability and security of the extended family. Asian Americans wrestle with many of the same financial challenges as the general population: funding a secure and independent retirement, managing medical expenses, and, somehow, simultaneously setting aside money for emergencies and sending children to college. The majority of Asian Americans (73%) today are first-generation immigrants. Asian Americans make up a fast-growing segment, and as their numbers have accelerated, so has their social and economic influence. Asian Americans grew from 4.5% of the U.S. population in 2000 to 6.6% by 2014, according to U.S. Census data. During that same period their buying power grew 180%— faster than for any other ethnic segment in the U.S.2 Our survey results show that the need for a nuanced, culturally acute roadmap to helping Asian Americans realize their financial goals has never been greater. Companies that take the time to understand and connect with them will be among those best positioned to serve them. Prudential has long been a champion of diversity, in our workplace and in the marketplace. We are committed to understanding and partnering with the broadest possible cross-section of consumers and communities to help them meet their financial needs and pursue their financial dreams. We are proud to present this study in support of that commitment.

Steve Pelletier Executive Vice President and Chief Operating Officer, U.S. Businesses

Lata Reddy Vice President of Corporate Social Responsibility and President of The Prudential Foundation

For the purpose of this study, the group will be referred to as Asian Americans.

1

“The Multicultural Economy: Special Focus on Asian Buying Power by Subgroup in 2014,” by Jeffrey M. Humphreys, Selig Center for Economic Growth, Terry College of Business, University of Georgia, September 2014.

2

Asian Americans devote substantial resources to helping family Asian Americans focus on family. Twenty-two percent of surveyed Asian American parents say providing college tuition for their children is highly important to them, versus 14% of parents in the general population. And 25% say taking care of family members is a priority, versus 15% of the general population. Buying a home also is a top goal for 24% of Asian Americans, versus 17% of the general population.

70% of Asian American caregivers pay some or all of the living expenses for the person they are helping, compared to 57% of caregivers in the general population.

Asian Americans are more likely to act as caretakers for extended family. Fully a third of Asian Americans surveyed identify themselves as caregivers for another person—typically a spouse, parent, other relative or special-needs child—compared with 21% of the general population surveyed. Their support doesn’t stop with physical help. Seventy percent of Asian American caregivers responded that they pay some of the living expenses of the person they’re helping, including 31% who pay all those costs. By contrast, 57% of caregivers in the general population shoulder some of the living expenses of the person they’re helping, including 28% who pay all the costs. Asian Americans are significantly more likely to provide housing and financial assistance to their extended family. Thirteen percent of Asian Americans have parents or grandparents living with them, compared with 8% of the general population. And 20% of Asian Americans provide financial assistance to their relatives, versus only 6% of the general population. Ten percent of Asian Americans send money overseas at least once a month—with a median send of $400 each time.

The Asian American Financial Experience visit www.prudential.com/asianamerican

1

Some have more resources

FIGURE 2

Chart View Table View

Geographic Concentration of Asian Americans

Asian Americans tend to earn more, and have higher household wealth, in some parts of the country. Asian Americans surveyed have a median personal income of $62,000 and median household income of $87,000, versus $42,000 and $62,000, respectively, for the general population. Asian Americans estimate the value of their household financial assets, excluding their primary residence or a business, at $445,600, on average, compared with $385,500 for the general population. Seventeen percent of Asian Americans—about one in every six—have at least $500,000 of equity in their homes, compared with 8% of the general population. Of course, all Asian Americans are not the same, and are represented at all levels of the income spectrum.

Location West Midwest

Percent in Location

10%47%

MIDWEST 10%

East

24%

South

19%

24% EAST

19%

47%

SOUTH

WEST

FIGURE 1 Chart View Table View

Household Income for Asian Americans Survey Participants 12% Range 16% Income

30% 24% 18% Percent of Asian Americans in income range

0-$25K

12%

$25K-$50K

16%

$50K-$100K

30%

$100K-$150K

24%

$150K+

18%

0

$25K

$50K

%87K Medium Income

FIGURE 3

$100K $150K $87K Median Income

Income 16% Range 22%

Percent of General Population range 34% 20% in income10%

0-$25K

16%

$25K-$50K

22%

$50K-$100K

34%

$100K-$150K

20%

$150K+

10%

$25K

$50K

Location East

Asian American

General Population

$109.2K $95.1K Asian American $109.2K Population $96.1K $95.1K General $87.4K

East West

West Midwest South

$90.7K $66.8K American $84.8K $96.1K Asian$69.1K $87.4K General Population

Midwest $90.7K Asian American $66.8K General Population

South $84.8K Asian American $69.1K General Population

$100K

$150K

%62K Medium $62K Median Income Income

Geography and education contribute to higher income levels. A variety of factors may play into the income disparities between Asian Americans and the general population. By a substantial margin, Asian American households tend to be concentrated in the East and the West, where wages (along with living expenses) tend to be higher than they are in the Midwest or the South. Nearly half—47%—of Asian Americans reside in the West, versus 24% of the general population. In addition, Asian Americans are more likely to have higher levels of education, with 38% holding a bachelor’s degree versus 26% for the general population. Asian Americans also are more likely to hold professional, managerial or administrative jobs that tend to pay more than other positions (55% hold such jobs, versus 47% for the general population). 2


Median Household Income by Region

Household Income for General Population Survey Participants

0

Where Asian American populations are concentrated— in the East and West—income levels are comparable to those of the general population.

When financial hardship strikes, Asian Americans are more confident of being able to handle it. Thirty-six percent of those surveyed say they could maintain their current lifestyle for a year or more if their household lost all its regular monthly income, versus 27% of the general population. Along these same lines, only 20% of Asian Americans say they live paycheck to paycheck, versus 32% of the general population.

More than a third of Asian Americans say they could maintain their current lifestyle for a year or more if their household lost all of its regular monthly income.

Prudential Financial

Retirement is the top financial priority Like the U.S. general population, Asian Americans rank retirement-related goals as their top financial priorities. Having enough money to maintain their lifestyle throughout retirement, being able to cover unexpected medical costs, and not becoming a financial burden to their loved ones are among the top three priorities for both groups. (See Figure 4) The two groups diverge, though, on goals relating to debt and family issues. While 43% of the general population responded that reducing personal debt is a top priority, only 35% of Asian Americans surveyed share that concern (the data shows that Asian Americans are less likely to have onerous credit card debt, medical debt or auto loans). Conversely, a slightly higher percentage of Asian Americans than non-Asian Americans rate several family-related financial goals as very important: having enough life insurance to protect loved ones, helping to take care of parents or other family members, and buying a home and providing college tuition for children. The research surfaced one outlier among the priorities: maintaining a standard of living for my family if something were to happen to me. Just 30% of Asian Americans rate that a top goal, compared with 35% of the general population. FIGURE 4

While 43% of the general population says reducing personal debt is a top priority, only 35% of Asian Americans share that concern. Financial priorities appear to shift with age. Younger Asian Americans survey respondents are more focused on debt reduction and nest building (buying a home, building an emergency savings account), while older Asian Americans are primarily concerned about sustainability (maintaining their lifestyle in retirement, covering medical costs) and self-reliance (not becoming a burden, not outliving savings).


Financial Priorities

PERCENTAGE OF ASIAN AMERICANS

PERCENTAGE OF THE GENERAL POPULATION

Financial Priorities

Asian American

General Population

Having enough money to maintain my lifestyle throughout retirement

49%

56%

Not becoming a financial burden to my loved ones Not becoming a financial burden to my loved ones

38%

40%

38%

42%

Making sure I do not outlive or fully spend all my savings Having enough money to cover an unexpected medical cost

36%

38%

35%

43%

Maintaining standard of living for family if something weremy to happen to me Making sure I do not outlive or fully spend all savings

30% 26%

35% 36 38 27%

22%

25%35

Having enough money to maintain my lifestyle throughout retirement

Having enough money to cover an unexpected medical cost Reducing my personal debt

Protecting investments and retirement savings from market volatility

Reducing my life personal debt Having enough insurance to protect my loved ones Helping to take care of my parents or other family members

15%

Saving for a major purchase other than a home (e.g., car, etc.)

19%

Providing college tuition for my children

14%

Passing on money as an inheritance to my children/heirs

20%

Having enough life insurance to protect my loved ones Helping to take care of my parents or other family members

Providing college tuition for my children Passing on money as an inheritance to my children/heirs The Asian American Financial Experience visit www.prudential.com/asianamerican

38

42

43

23%

26 27

22%

22 25

21%

25

17

Saving for a major purchase other than a home (e.g., car, etc.)

38 40

30 24%35

15

Buying a home

56

25%

Maintaining to me Buying a homestandard of living for family if something were to happen17% Protecting investments and retirement savings from market volatility

49

24

19 23 14

22 20 21 3

Asian Americans are relatively confident they’ll achieve their financial goals Asian Americans believe they’ll be able to retire more than a year earlier than the general population. Reflecting a general confidence in their financial health, Asian Americans surveyed plan to retire at age 64.6, on average, a difference of 15½ months compared with their non-Asian American survey participants, who on average plan to retire at age 65.9. They’re also less likely to think they’ll need to supplement their income in retirement with part-time work (25% of Asian Americans have plans to do so, versus 38% of the general population).

Among Asian Americans aware of how much income their workplace retirement plans will generate, 74% feel they are on track to meet their retirement goals. Higher levels of financial assets, and greater access to workplace retirement savings plans, may contribute to Asian Americans’ confidence about retirement. In addition to having higher levels of household financial assets, Asian American respondents are more likely than the general population to have access to a retirement savings plan at work: 76% versus 66%. What’s more, 58% of those with access to a workplace plan contribute to it at a percentage equal to or greater than the amount their employer matches. Asian Americans also feel better about their overall financial health. A solid majority (58%) of Asian Americans feel they are better off financially than their parents were at the same age, versus 49% of the general population. Similarly, 56% of Asian Americans say they are better off today than they were five years ago, versus 45% for the general population. However, the two groups are about equally optimistic about the next generation; 59% of Asian Americans and 57% of the general population say their children will be better off than they are.

4

Family relationships—and support— remain important in retirement Asian Americans are more likely to move in with family or friends in retirement. While the vast majority—91%—intend to live independently, meaning alone or with a spouse or partner, that’s still significantly lower than the 96% of the general population that plan to live independently in retirement. Among Asian Americans, 3% say they plan to move in with children, 4% with other relatives, and 1% with friends. Few expect to receive direct financial assistance from family in retirement. Only 4% of Asian Americans plan to receive assistance from their children in retirement, and 4% from other family members. That’s not much different than the 3% and 6% of the general population, respectively, who expect to receive such support. A significant number of Asian Americans plan to spend at least a portion of their retirement years outside the U.S. While 79% say they plan to live primarily in the U.S. in retirement, 7% say they will live primarily in another country and 14% say they will split time equally between the U.S. and another country. This trend is even more pronounced among younger Asian Americans.

Nearly one in four—21%—of Asian Americans say after they retire, they plan to split time equally between the U.S. and another country or live primarily in another country.


Product ownership reveals a consumer group with diverse assets Asian Americans are more likely than the general population to own individual stocks. Like the general population, Asian Americans own a broad variety of financial products. One way they stand out: 29% of Asian Americans own individual stocks, compared with 23% of the general population. Also, 26% of all Asian Americans say they have purchased or traded stocks online in the past year, compared with 16% of the general population.

FIGURE 5


Product Ownership

Product Ownership Asian American Percentage of Asian Americans Percentage of the General Population Checking, savings, money market accounts, or certificates of deposit 68%

General Population

Health insurance provided/purchased through a place of employment

49%

Checking, savings, money market accounts, or certificates of deposit

77%

47%

Employer-sponsored plan/defined contribution Health insurance retirement provided/purchased through aplan place of employment 37% Individual retirement accounts (IRA, SEP, KEOGH or ROTH, etc.)

38% 47

36%

Employer-sponsored retirement plan/defined contribution plan Individual stocks

37

23%

Life insurance purchased outside of a place employment Individual retirement accounts (IRA,ofSEP, KEOGH or ROTH, etc.)

28%

Life insurance provided/purchased through a place of employment

20%

Employer-provided benefits (pension, cash balance/defined benefit plan)

18%

Health insurance purchased outside of a place of employment

15%

Life insurance purchased outside of a place of employment Disability income provided/purchased insurance through a placethrough of employment Life insurance a place of employment Estate plans, trusts or written wills

14%

Education investment accounts (529, Coverdell, UGMA)

7%

20

Health purchased outside of a place of employment Fixed orinsurance variable annuity Disability income insurance provided/purchased outside a place of employment

Disability income insurance through a place of employment

27 22

Estate None ofplans, these trusts or written wills Education investment accounts (529, Coverdell, UGMA)

9

Individual bonds

19% 11% 11% 10%

6%15 19

9%

5%

8%

1%

2%

14 19 8%

10%

15

8

11 10

Fixed or variable annuity

6 9

Disability income insurance provided/ purchased outside a place of employment

5

None of these

19%

30 15%

7 11

Long-term care insurance through a place of employment

Other

23%

8%

14

Other

38 29%

22%

28 33

Long-term care insurance through(pension, a place of employment 9% 18 23 Employer-provided benefits cash balance/defined benefit plan) Individual bonds

49

39%

30%

23 29

14%

Mutual funds or exchange traded funds, other than a retirement plan

77

3633%39

27%

Individual stocks Mutual funds or exchange traded funds, other than a retirement plan

68

1

8

2 8


10

5

Asian Americans’ debt profile is similar to the general population

They see a need to improve their financial literacy

Nearly equal proportions of Asian Americans and the general population carry debt. Overall debt levels are comparable, too.

For all their confidence in their financial health and outlook, Asian Americans do not feel any more financially savvy than their general population counterparts. In fact, only 31% of Asian Americans surveyed feel they are “very well prepared” to make financial decisions, similar to 33% of the general population. And 43% responded they’re either beginners or, if not, still need to increase their knowledge in many areas.

Asian Americans are less likely to carry certain types of debt, though, including credit card debt. Only 38% of Asian Americans surveyed responded that they carry credit card debt, compared with 48% of the general population. Asian Americans also are less likely to have medical debt (7% of Asian Americans, versus 12% of the general population), and auto loans (30% versus 36%). Mortgage balances are higher. By contrast, reflecting the higher housing costs in the East and West where the majority of them reside, Asian Americans tend to have higher mortgage balances (7% have mortgage balances of $500,000 or more, versus less than 1% of the general population).

FIGURE 6


Preparedness in Making Financial Decisions Levelwell of Preparedness Very prepared Very well prepared

Asian American 31%

I need help in a few 26% selected areas or I topics need help in a few selected I need to increase my knowledge in many areas

31%

General Population 33% American 31% Asian 33% General Population 29%

areas or topics 26% Asian American 27% 29% General Population

I need to increase my knowledge in many areas I’m a beginner and 12% need to gain a lot of knowledge and experience I’m a beginner and need

11% American 31% Asian 27% General Population

to gain a lot of knowledge and experience 12% Asian American 11% General Population

Asian Americans are most confident in their knowledge of managing household expenses and budgets, managing money and managing debt—and least confident about leaving money for the next generation. This mirrors the general population. But compared to the general population, a smaller percentage of Asian Americans are confident about managing household expenses and budgets (68% versus 78%) or dealing with life insurance (45% versus 52%). Knowledge levels also start to wane for both when it comes to less routine financial needs, such as planning for income streams and covering medical expenses in retirement, investing, and planning for succession of wealth. A variety of factors play into the feeling of not being prepared to make financial decisions. Presented with a dozen possible reasons for not feeling prepared to make financial decisions, more Asian Americans (31%) chose “I have not consulted with a financial professional” than any other selection. Other top factors included not being sure what to consider when evaluating options (cited by 27%), not knowing what options are available to them (24%), and not receiving enough education regarding managing personal finances (21%).

6


Asian Americans are more avid consumers of financial information Asian Americans are more inclined to seek out information before making financial decisions. Not only do they consult a higher number of resources than the general population (5.8 average resources versus 4.1), they also demonstrate a higher propensity to consume information from less traditional sources, such as clubs, social media and faithbased resources. (See Figure 7) FIGURE 7

Family members are the preferred source of financial information. Family members are cited as the preferred source of financial information by 44% of Asian Americans, followed by friends (37%), financial professionals (36%), and employers or employer-sponsored resources (35%).


Sources of Information for Financial Advice

Friends/Family (5.8 average General (4.1 average resources) Percentage of Asian Americans (5.8 average resources) Asian American Percentage of theresources) General Population (4.1Population average resources) Family

44%

37%

Friends

37%

26%

Spouse/partner

34%

32%

37

Coworkers

19%

26 9%

37

Industry Pros

Asian American (5.8 average resources)

General Population (4.1 average resources)

Financial professionals

36%

29%

Employer or employer-sponsored resources

35%

27%

Financial company websites

35%

22% 29

28%

22%27

Friends/Family Family

Friends

Spouse/partner Coworkers

Industry Pros

Financial professionals

Employer orfinancial employer-sponsored resources Materials from companies

32 34

19

9

Financial financial company websites Well-known experts in the media

26%

22 21%

Financial planning or apps companies (e.g., Mint or Learnvest) Materials from site financial

23%

22 17% 28

Financial seminars or conferences Well-known financial experts

23%

in the media

21

Advertising or marketing materials

16% Financial planning site or apps (e.g., Mint or Learnvest)

Financial seminars Banks/Credit Unions Advertising Local bank

or conferences

or marketing materials

Credit union Banks/Credit Unions

Local bank

17

23

8

27%

16

19%

31%

11% 26 8%

19 19

23

27

General Population (4.1 average resources) 25%

25%

19%

Newspapers and magazines Ratings or reviews on blogs/user groups

20%

11% 25

Social (e.g., Facebook, Linkedin, etc.) Booksmedia on financial topics

18%

10% 25

Club

Social media (e.g., Facebook, LinkedIn, etc.)

Investment club

Clubs Lending circle/savings circle Investment club Money club Lending circle/savings circle

35

19%

Newspapers and magazines

Ratings or reviews on blogs/user groups

35

23%


Media Books on financial topics

36

11 resources) 23 General Population (4.1 average resources) Asian American (5.8 average

Media

Credit union

44

19 11

20


10

13%

18

11%

31

General Population (4.1 average resources) 4% 5%

13

4

11%

5

3%

11

Other


General Population (4.1 average resources)

Government agencies

20%

16%

Money club

Other Faith-based organization

Government agencies Community center, club, or group Faith-based Other

organization

3

13%

8%

16

12%

8

5%

Community center, club, or group Other

11

4 4

13

20

4% 4%

12

5


7

Few Asian Americans engage financial professionals Relatively few Asian Americans seek the help of a financial professional, but many are open to the idea. Only 18% of Asian Americans currently work with a financial professional, compared with 26% of the general population. But many—43%—are open to the idea given the right circumstances. Asian Americans who responded that they use a financial professional feel much more knowledgeable on financial issues than those who said they do not. However, as those working with financial professionals also index higher on wealth and wanting to maximize the growth of their investments, causality is hard to determine. Moreover, 63% of those who are financially very well prepared report that their own current financial situation is better than it was five years ago, while 54% of those who need limited financial help, 39% who need extensive help, and 33% of financial beginners feel this way.

Only 18% of Asian Americans work with a financial professional, although 43% of those who don’t are open to the idea. Age, wealth, birthplace and language all influence the decision to use a financial professional. Older and wealthier Asian Americans are more likely to be working with a financial professional than younger Asian Americans. However, among all who do not, younger Asian Americans are more willing to consider it than their older counterparts. Those who do work with a financial professional are more likely to have been born in the U.S. (23%, versus 16% who were not) and speak English (20%, versus 7% who do not). FIGURE 8


Using a Financial Professional Comparing Generations Currently Generation Use

12% Millennials Millennials Gen X

14% Boomers

Would Currently Use Consider Using

53%

Don’t Don’t Use/Wouldn’t Would Use/ Consider Using Consider Wouldn’t Using Consider 35% Using

12%

53%

35%

14%

47%

39%

47% 28% 30%

39% 42%

Gen X 28%

30%

Investing and retirement planning are the top two reasons for using a financial professional. This is true for Asian Americans and the general population. Of those who use a financial professional, 78% of Asian Americans and 74% of the general population are getting help with investments, and 60% and 63%, respectively, are getting help with retirement planning.

Trust is a notable stumbling block to hiring a financial professional Fees and a DIY mentality—plus trust—are key barriers to using a financial professional. Among Asian Americans and the general public, reasons for not using a financial professional include commonly cited examples such as “fees are too high” (34% of Asian Americans and 35% of the general population), “I don’t feel I have enough assets” (28% versus 37%), and “I prefer to do it on my own” (28% versus 35%). Among Asian Americans, however, “I have never found one I can trust” is also a strong reason for not using a financial professional, cited by 21% of those surveyed. This is significantly higher than the 13% of the general population who cite this. Convincing these Asian American consumers to consider a relationship with a financial professional will be tricky, though, as those Asian Americans with the least amount of trust are also most likely to think fees are too high (48%).

One in five Asian Americans say they have never found a financial professional they trust. To earn their trust, Asian Americans advise financial professionals to treat them with respect and follow through on their promises. Asian Americans and the general population alike say the best ways for financial professionals to build trust is by treating clients with respect and being someone who is “reliable and follows through” on their promises. A significant percentage of both groups also advise financial professionals to be “upfront and transparent,” and provide information appropriate for the client’s level of financial experience and knowledge. Overall, though, financial professionals may find it more difficult to build trust with Asian Americans than the general population: Asian Americans surveyed identify significantly fewer measures financial professionals could take to build trust— 6.9 on average, versus 8.6 for the general population.

42%

Boomers

8


APPENDIX A

Key differences among major Asian American subgroups Although this paper covers the financial experience of the Asian American community as a whole, there are important differences between the various subgroups that make up the Asian American population. Listed below are key areas where each of the six largest subgroups participating in the survey differ notably, relative to all Asian Americans, based on responses to survey questions.

Chinese Americans

Demographics • On average a little older • Less likely to have children • Less likely to have larger households Financials • With higher-than-average education levels and more professional careers, tend to have higher incomes, higher asset levels and greater equity in their homes • Less likely to be living paycheck to paycheck, and thus confident they could sustain their household longer in the event of income loss • Self-described savers, with more knowledge about debt management and investing • Own a greater diversity of financial products, with highest levels of investment in individual stocks and retirement plans, and more likely to trade stocks online • In retirement, more likely to expect to rely on personal investments and savings

Indian Americans

Demographics • More likely to be born outside the U.S. • Significantly more likely to report being married Financials • With higher-than-average education levels and a higher proportion of professional jobs, tend to have higher income levels • Less likely to be living paycheck to paycheck, and able to sustain their household longer in the event of a loss of income • More likely to describe themselves as savers, and to report the highest levels of knowledge regarding all financial topics • More likely to provide caregiving for others and support others outside the country • More likely to care that their financial professional was recommended by a religious or community source, and more likely to attend religious services at least monthly

Vietnamese Americans

Demographics • Less likely to have children • More likely to have smaller households Financials • Largely in line with the average Asian American

Filipino Americans

Demographics • Households tend to be larger than average • Households more likely to include extended family members Financials • Tend to carry more types of debt, including a higher volume of credit card debt—and as such have debt reduction as a higher priority • More likely to be working in a mix of manual and professional careers • In retirement, more likely to plan to work to supplement income, and more likely to say they will spend their time equally in the U.S. and their native country • Obtaining insurance, so as not to be a burden to others, is a higher priority • Much more likely to attend religious services at least weekly

Korean Americans

Demographics • Youngest Asian American group Financials • Less likely to be living paycheck to paycheck but more likely to expect to be working to supplement income in retirement—and to be receiving support from family in retirement • Less likely to be financially supporting others outside the country or to be caregivers for others

Japanese Americans

Demographics • Older on average, and perhaps as a result least likely to have children and more likely to have smaller-size households • Most likely to be born in the U.S. Financials • While generally optimistic in outlook regarding themselves, less likely to think the next generation will be better off • Less likely to be living paycheck to paycheck, and believe they are able to sustain their household longer in the event of a loss of income • Less likely to carry the burdens of supporting family or others outside the country • Less likely to be caregivers • Less likely to report regular participation in a religious service


9

About the Prudential research Methodology The Asian American Financial Experience survey was conducted online within the United States by Harris Poll on behalf of Prudential from June 19 to July 21, 2015.

Survey Sample Size = 2,597 Americans

2,097 500

self-identified as Asian American

General Population

The research, which covered a broad range of financial topics, surveyed U.S. residents ages 25-70.

The survey was designed to broadly represent characteristics of the just over 11 million Asian Americans (ages 25 to 70) in the United States. It is important to note, however, that the Asian American community is composed of a number of different ethnic groups with unique cultural experiences, traditions and history. (See Figure 9)

Notes All results shown are percentages unless otherwise labeled. Percentages may not add up to 100 due to rounding and to multiple responses being allowed for some questions. In this report, we use the term Asian American to describe respondents who self-identified as Asian American. Results of the survey reflect broad generalizations, averages and only some of the characteristics of the broadest depiction of the Asian American community, as defined in the U.S. Census. As such, results or analyses do not necessarily describe some or all of the groups that comprise that community. Prudential recognizes that substantial variations in individual experience exist, and this survey should not be used as a basis for assuming that all Asian American consumers have the characteristics cited. (See Appendix A.) The term “caregiver” was defined in the survey as someone who is responsible for taking care of another person and is engaged in care-related activities for this person, such as taking them to the doctor, making medical decisions, or providing financial support. The person being cared for may or may not live with the caregiver. More information and survey results can be downloaded at prudential.com/asianamerican.

Sample Source Respondents for this survey were primarily selected from among those who have agreed to participate in surveys from Harris Poll or sample partners. A small number of respondents was recruited to a central location and then completed the survey online. Results for each population were calibrated separately (by age, gender, region, income, education and country of birth where necessary) to align them with their actual proportions in their respective populations. All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with non-response, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Poll avoids the words “margin of error” as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal. 10


FIGURE 9

National Distribution in Population Among Asian Americans Percentage

FIGURE 13 Age Asian Americans

General Population

Indian

14%

12%

25-29

Filipino

25%

23%

30-39

Vietnamese

25%

22%

40-49

9%

Korean

29%

33%

50-64

6%

Hawaiian/Pacific Islander

7%

10%

65-70

5%

Japanese

44.4 yrs

47 yrs

Mean

20%

Chinese (including Taiwan and Hong Kong)

18% 16% 11%

16%

Other Asian

Source: Current Population Survey, March 2014 (A Census Bureau publication) *Other Asian countries include Bangladesh, Cambodia, Indonesia, Laos, Malaysia, Pakistan, Singapore, Sri Lanka and Thailand. FIGURE 10 Household

Composition

FIGURE 14 Language

Most Spoken at Home Asian Americans

86% English 29% English only

Asian Americans

General Population

40%

38%

No children

27% English mostly

60%

62%

Have children

30% English and another language equally

2.2

2.3

Average no. of children

2.9

2.7

Average no. of people in HH

14%

Another language

11% Mostly another language 3% Don’t speak English

FIGURE 11 Education FIGURE 15

Asian Americans

General Population

17%

33%

High school or less

20% 38%

28% 26%

Some college Four-year college

Asian Americans

24%

14%

Graduate degree

1%

Less than 1 year

7%

1 to 5 years

Years

Living in the United States

10%

6 to 10 years

FIGURE 12

18%

11 to 20 years

Marital

48%

More than 20 years

17%

My whole life

Status Asian Americans

General Population

69%

69%

Married/Living with partner

8%

13%

Widowed/Divorced/Separated

22%

19%

Never married


11

The Prudential Insurance Company of America and its affiliates, Newark, NJ. Prudential, the Prudential logo, the Rock symbol and Bring Your Challenges are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. 0295132-00001-00