Warm Handoffs in the Financial Industry: Increasing Financial Access for People of Color

Prior research highlights the disparity in wealth-building activity participation among lower-to-middle-income (LMI) households, resulting in issues like the racial wealth gap. This presents an opportunity to improve how financial institutions offer products through proven strategies such as warm handoffs.In collaboration with a debt management and a financial services company, we conducted a field experiment testing the impact of a warm handoff process. This culminated in an offer to engage in a financial advisor call for further guidance on the next steps in their financial journey for participants completing a debt management plan (DMP). In the months leading up to their DMP graduation, 1,329 clients received either a four-email handoff over four months (high-touch), a one-email handoff (streamlined), or no handoff email (the control). We see stronger open and click-through rates for the handoff email in the high-touch treatment, compared to the streamlined treatment. Otherwise, we see statistically significant differences in open rates by race, with people of color engaging with these resources at higher rates. This suggests that behaviorally informed warm handoff strategies could effectively improve engagement with financial resources and financial well-being, particularly for people of color.