(Dow Jones) A few years ago, Eduardo Ramos, an adviser in Guaynabo, Puerto Rico, decided to bring his financial planning skills to Hispanic clients to the mainland.

"If you do a search, there just aren't many advisers targeting Hispanics," he says.

So Ramos opened an office in Chicago, a city he chose for its central location and easy access to other metro areas. The move was designed to boost the reach of Ramos' investment adviser, Freedom Advisory LLC, and tap into an underserved population with needs he says the typical advisor has difficulty meeting.

"Many Hispanics don't feel as comfortable dealing with others who may not be of their ethnic background," according to Ramos.

So how can advisors better understand this market? Ramos offers a few tips for working with Hispanic clients.

Start talking about risk. For many first- or second-generation Hispanics in the U.S., building wealth meant becoming an entrepreneur, dealing in the currency of sweat equity. It meant taking heavy risks and pouring much of their capital into that business. That strategy has made many first- and second-generation Hispanics a lot of money, but it's also made them lousy investors, says Ramos. "They took a lot of risk making their money, and they think they need to take a lot of risk investing their money," he says.

Become a teacher. One of Ramos' jobs is to temper clients' expectations of making fast money in the stock market-and stop them from making rash decisions that could erase their hard-earned savings. He helps clients through that process by showing them charts of historical stock market performance and emphasizing stocks' mean returns over long periods of time. For instance, Ramos wants his clients to understand that if small caps shoot out the lights one year, a repeat performance can't be expected next year or the following year. "It's all in the education, so they know what to expect in the high years and what to expect in the low years," he says.

Prioritize retirement saving. Ramos says affluent Hispanics routinely support not only their immediate family, but extended family as well. That's not a problem-as long as that support isn't cutting into their own financial security. "I try to teach them how to balance the amount of money they need to support family members and the amount they need to save for retirement," says Ramos. "That's definitely an issue in the Hispanic community."

Don't generalize. Though Ramos says there are certain themes that continue to crop up when dealing with Hispanic clients, he also stresses that the demographic is constantly changing, with wide cultural gulfs between, say, first-generation and third-generation Hispanics. While first-generation clients may primarily speak Spanish and own a business, third-generation clients are just as likely to speak little or no Spanish and have white collar jobs. "In any group, there are a lot of sub-groups," he says. "What's important is that you know who your client is."

Ramos says his ideal client is a Hispanic who feels lost in the investing world but wants to protect and grow his money for the long term. He sees no shortage of those clients in the marketplace. "The Hispanic community is going to grow for years to come, and we're strategically positioning ourselves to become the premier adviser for this group."

 

Copyright (c) 2010, Dow Jones. For more information about Dow Jones' services for advisors, please click here.