Hispanic-Latino Americans are ripe for the advisory market, according to a new study. A Bank of America “Better Money Habits” report found that 84 percent of Latino Americans want to continue to build financial know-how compared with only 69% of non-Hispanics.
While 73 percent check their account balances, 53% track their expenses and 31% plan a budget, the topics they are most interested in include investing, becoming better at saving and preparing for retirement.
“First- and second-generation Latinos haven't had as much education about the monetary system from prior generations, nor do we have the resources or the access that others have had whose families may have been here from the start, so we are an untapped opportunity,” said Carla Molina, a communications executive with Bank of America based in Austin.
This market faces unique challenges. About 52 percent of Hispanic-Latino Americans are financially tied to their families while just 33 percent of non-Hispanic-Latino Americans are.
“It’s one way we know how to hang on to our cultural roots and traditions,” said Molina, whose grandparents immigrated from Nicaragua. “It’s a lot easier when you're close to family to speak the language and observe holiday traditions as a community.”
Specifically, 25% help support their family financially as soon as they are old enough to work, and 28% currently support or expect to support their parents financially.
“Previous generations may have lost everything before immigrating to America and have had to start over with no savings or education, which is why younger generations often become caregivers,” Molina told Financial Advisor.
Advisors can help by presenting information in a way that is easy to understand—whether it's how to prepare taxes or the very basics of establishing credit.
“Depending on their country of origin, the Hispanic-Latino population may not have sound financial habits because they don't understand the monetary system or speak the language,” said Molina.
The study found that 43% don’t save enough money, 32% are not planning or saving for retirement and 30% struggle with housing costs.