The Hispanic American community places a high priority on funding near-term goals such as supporting their multi-generational families and funding their children’s education over saving for retirement, a recent Prudential study found.
According to the study, nearly one out of every six Hispanics supports his or her parents. The study also found that the complexity of programs such as Social Security, a lack of access to work-based retirement plans and limited contact from financial advisors are additional barriers for this community in achieving long-term financial goals.
“We see an underestimation of how much money may be required to retire, a fact evidenced in part by lower participation in workplace-based retirement plans, lower rates of investing and longer expected time in the workforce, with three out of every four expecting to continue working during retirement,” said George Castineiras, senior vice president of Total Retirement Solutions at Prudential Retirement.
According to the most recent U.S. census, Hispanics are the fastest-growing population segment in the country, expected to grow 167 percent from 2010 to 2050. By comparison, the total population is only projected to grow 42 percent during the same time frame.
An opportunity exists for financial advisors to expand their contacts with the Hispanic community, says Prudential. When compared to the general population, Hispanic respondents were only half as likely to have been contacted by a financial advisor (27 percent versus 55 percent). They were also half as likely as the general population to currently have a professional advisor; only 15 percent reported currently working with an advisor versus 30 percent of the general population.
Hispanics are most interested in sound financial advice from advisors they trust and who offer assistance that relates to their specific situations, according to the study. Eighty-six percent of respondents indicated that race did not matter when choosing an advisor. The respondents' strongest preference was for an advisor involved in the local community. In addition, they are looking for an advisor who understands their needs and goals (51 percent), explains investment options clearly (44 percent) and creates a personalized financial plan (37 percent).
Prudential’s "Hispanic American Financial Experience" study consisted of an online survey administered by GfK Custom Research Inc. from October 28-November 18, 2013. The survey polled 1,023 Americans who identify themselves as Hispanic.