Lincoln Financial Group’s COVID-19 Sentiment Study

A proprietary monthly tracker of consumer sentiment, attitudes and priorities

Lincoln Financial Group’s COVID-19 Sentiment Study

A Special Focus on Race and Ethnicity

2©2020 Lincoln National Corporation

Research MethodologyLincoln Financial Group Consumer Sentiment Tracker

The goal of this ongoing monthly research is to gauge consumer sentiment across multiple financial

topics. Responses for the focus on race and ethnicity were gathered July (7/1/20 – 7/14/20), August

(8/3/20 – 8/7/20), September (9/2/20 – 9/14/20) and October (10/2/20-10/16/20) using the

Qualtrics survey platform. Responses were collected from a total of 4,240 U.S. Adults, including

Asian (n=277), Black or African American (n=412) , White or Caucasian (n=3,228) and Hispanic

(n=359). The sample included quotas to be representative of the total U.S. adult population.


Executive SummaryKey Headlines

• Black Americans’ household income skews significantly lower than the other race and ethnicity groups and they have been hit hardest with job loss due to the pandemic

• Minority consumers’ financial wellness has been more negatively impacted by the pandemic

– Black Americans are more worried about making ends meet, while Hispanic consumers are concerned that they don’t have enough “know-how” to manage their finances.

• Despite their financial concerns, Black Americans express the most positive feelings—hopeful, interested and opportunistic—when it comes to financial planning.

– Hispanic consumers are expressing the highest levels of stress and anxiety.

• The pandemic is prompting all Americans to think more about planning for their financial future.

• The mindset of Black and Hispanic consumers are most impacted by the events of recent months – with more agreeing that they are thinking and planning for the future differently as a direct result of the pandemic.

• Black and Asian consumers are key targets for financial planning services, with more expressing an appetite for planning support, information, education, and advice.

– They are the most concerned about a wide range of financial issues – a function of market uncertainty, job and financial insecurity, as well as a lack of advice and financial planning.

• U.S. consumers agree that now is a good time to focus on financial planning basics--decreasing spending and increasing savings.

• The pandemic shifted investors’ focus to making sure emergency savings accounts were well-funded – drawing attention away from other investment priorities.

• Hard-hit Black and Hispanic consumers are responding to job losses and insecurity with nearly 8 in 10 indicating they have taken some financial action related to the impact of COVID-19.

• As investors navigate the post-COVID19 financial landscape, professional advice and self-education go hand-in-hand—financial professionals and websites are the top sources for financial product information.

– Asian consumers are more likely to do their own research, looking at websites and speaking to family/friends. While, Black consumers prefer to seek out professional advise.

Source: Lincoln Financial, Monthly Consumer Sentiment Tracker, July-Oct 2020

4[Audience disclosure goes here…] ©2020 Lincoln National Corporation

COVID19: Impacts Across Race and Ethnicity


15% 15%

32%

25%

13%

Total (n=1,638) Asian (n=84) Black or AfricanAmerican (n=144)

Hispanic (n=113) White or Caucasian(n=1,286)

Lost Job as a Result of the Pandemic (% among those unemployed)

Income Discrepancies Among Race & Ethnicity

41%

27%

27%

27%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

<$25K

$25K - $49K

$50K - $74

$75K - $99K

$100K - $149K

$150K - $199K

$200K +

Total Household Income Last Year

Black & Hispanic consumers have seen the greatest job loss due to the

COVID-19 pandemic

Black (n=412)Total (n=4,240) Asian (n=277) Hispanic (n=359) White (n=3,228)


Black Americans’ household income skews significantly lower than the other race and ethnic groups and they have been hit hardest with job loss due to the pandemic


Minority Consumers More Impacted by the Financial TollBlack Americans, in particular, are concerned with being able to cover day-to-day expenses

37%

42%

41%

28%

28%

34%

17%

Not having enough emergency savings

Not being able to cover basic expenses likemortgage/rent, utilities, food and water

Cybersecurity and protecting against fraud

Lost income due to layoffs, pay cuts, reduced hours, etc.

Decreased value of investments due to stock marketvolatility or interest rate changes

Feeling like I don’t have enough know-how to manage my finances

Feeling uncertain about how to invest

Not being able to save enough for retirement

Not being able to keep up with debt payments

None of the above

Concerns as a Result of the COVID 19(% selected)

62%

57%

67%

61%

58%

57%

57%

57%

57%

61%

58%

59%

61%

57%

Having enough income in retirement

Having enough money for a comfortableretirement

Being able to cover unexpected non-medicalexpenses

Paying for unexpected medical expenses

My taxes increasing

Supporting myself or family if I become disabled

Paying for healthcare expenses (e.g. medical,prescriptions, etc.)

Inflation

Having enough money to cover largepurchases/expenses (car, wedding, etc.)

Having enough money to cover day to day livingexpenses

Paying monthly bills

Top Financial ConcernsTop 2 Box - Rated 4 or 5

Black Americans concerned with lack of emergency savings and covering basic expenses

Black Americans insecure about investing and retirement saving

Asian Americans are most worried about lost income due to layoffs and reduced hours



Hispanic consumers are most worried about having the know-how to manage their finances


Planning for the FutureThe pandemic is prompting all Americans to think more about planning for their financial future, in particular Black and Hispanic consumers.

Total

41%

Asian

41%

Black

46%

Hispanic

46%

White

40%

% more/somewhat more often




Stress & Anxiety Levels Remain HighHispanic consumers are expressing the highest levels of stress and anxiety when it comes to financial planning in the wave of COVID-19.

▪ Positive feelings like hopefulness, interested and opportunistic are highest among Black Americans

▪ Negative feelings like stressed, sad and confused are highest among Hispanic consumers

28%

22%

17%

43%

39%

20% 20%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Feelings Related to Financial Planning

Black (n=287)Total (n=3,163) Asian (n=223) Hispanic (n=95) White (n=803)



A Shift in MindsetThe mindset of Black Americans is most impacted by the events of recent months –with more agreeing that they are thinking and planning for the future differently as a direct result of the pandemic.

74% 74% 75% 74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

I am planning to make permanent changes to the wayI spend and save money as a result of what I have

experienced during the COVID-19 crisis

I am thinking differently about my employer as aresult of the COVID-19 crisis

I am thinking differently about planning for myfinancial future as a result of the COVID-19 crisis

Right now, I'm more focused on day-to-day financesthan planning for the future




A Growing Appetite for Financial PlanningAsian & Black consumers are key targets for financial planning services, with more expressing an appetite for planning support, information, education, and advice.

78%

70%

82%

67%

61%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

I’m doing an ok job planning for my financial future, but can still

use help

I’m increasingly looking for and am open to financial planning

advice

I’m increasingly reading/learning about financial markets and

investing

I’m increasingly thinking about potential unexpected costs I

might have to bear (healthcare, inflation, taxes, etc.)

I’m increasingly thinking about whether I have the right

insurance

I’m looking for ways to better protect me and my family

financially




Back to BasicsU.S. consumers agree that now is a good time to focus on financial planning basics--decreasing spending and increasing savings—especially Hispanics. Black Americans are more likely to think now is a good time to purchase financial products and increase investments.

41%

31%

54%

51%

35%

30%

Decrease spending

Increase savings

Pay down debt

Create or update a will or estate plan

Increase investments to your retirementplan (e.g. 401K, 403B, etc.)

Reevaluate the employee benefits you enrollin at work

Evaluate your life insurance coverage fromyour employer

Speak with a financial professional or advisor

28%

31%

25%

26%

26%

24%

Purchase a financial product that protectsyour investments against market

downturns

Purchase a financial product that offersprotected lifetime income

Diversify your investment portfolio

Increase investments in products thatprovide tax deferred growth

Purchase a long-term care insurance policy

Increase coverage on an existing lifeinsurance policy

Purchase a new life insurance policy




First Things First - A Focus on Emergency SavingsThe pandemic shifted investors’ focus to making sure emergency savings accounts were well-funded – drawing attention away from other investment priorities.

Post-COVID 19 – The Importance of FundingNet Increase = % Increased

+28%

+16%

+15%

+15%

+13%

+12%

+9%

Emergency or rainy-day savings account

Retirement savingsaccount

Life insurance

Long-Term Carefunding plan

IndividualRetirement Account

Brokerage account

Annuity

Total

+18%

+16%

+11%

+13%

+8%

+11%

+5%



Life insurance



Brokerage account

Annuity

Asian

+30%

+18%

+20%

+19%

+15%

+17%

+13%



Life insurance



Brokerage account

Annuity

Black American

31%

+21%

+19%

+21%

+18%

+16%

+13%



Life insurance



Brokerage account

Annuity

Hispanic or Latino

+29%

+15%

+15%

+14%

+14%

+12%

+9%



Life insurance



Brokerage account

Annuity

White or Caucasian




Hispanic & Black Consumers are Taking Action

Hard-hit minority consumers are responding to job losses and insecurity with nearly 8 in 10 indicating they have taken some financial action related to the impact of COVID-19.

35%

6%

19%

8% 8%

23%21%

12%10% 9%

8% 7% 6%

35%

0%

5%

10%

15%

20%

25%

30%

35%

40%

None of the above Decided to delaymajor purchases(home, car, etc.)

Used funds from arainy day or

emergency savingsaccount

Increased creditcard debt

Contacted yourfinancial advisor to

discuss yourinvestments

Researchedinsurance products(e.g. health, auto,

life, etc.)

Increasedcontributions to

retirement savingsaccount (e.g., 401k,

IRAs)

Bought lifeinsurance

Contacted afinancial advisorfor the first time

Bought an annuity Bought long-termcare insurance

Post-COVID 19 Financial Actions Taken(% selected)




Professional advice and self-education go hand-in-handWebsites and family/friends are the top sources for financial product information, followed closely by financial professionals. Asian consumers are more likely to do their own research, looking at websites and speaking to family/friends. While, Black consumers prefer to seek out professional advise.

53%

43%39%

28%24%25%

0%

10%

20%

30%

40%

50%

60%

Websites Family/friends/colleagues Financial professional Financial servicescompanies

Personal financepublication/broadcast

My employer

Preference to Learn About Financial Products(% selected)




For more information

Contact:

Holly Fair

Media Relations

Lincoln Financial Group

[email protected]

Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates, including The Lincoln National Life Insurance Company, Fort Wayne, IN, and Lincoln Life & Annuity Company of New York, Syracuse, NY. Variable products distributed by broker-dealer/affiliate Lincoln Financial Distributors, Inc., Radnor, PA. Securities and investment advisory services offered through other affiliates. Affiliates are separately responsible for their own financial and contractual obligations.

LCN-3442865-020821

mailto:[email protected]

Documents

Lincoln Financial Group’s COVID-19 Sentiment Study