DALLAS (By Angel Gonzalez, DMNews) December 24, 2004 -- The purchasing power of Hispanics in
2004 is estimated to be $587 billion. By 2010, it's expected to reach $1
trillion.
And according to the U.S. Census, the number of prosperous Hispanic households
-- those with incomes of at least $100,000 -- rose 137 percent between 1990
and 2000.
But while Hispanic wealth continues to grow, many Hispanics still lack the tools
they need to invest the fruits of their labor, financial planning experts say.
More and more, financial planners and banking institutions are stepping up to
make sure that the bounty does not remain under the mattress and goes into the
economy instead.
They're offering new services to people with different levels of assimilation
and financial savvy, from uneducated immigrant laborers to Hispanic
professionals with master's degrees. They're creating cheaper ways to send
money home. They're providing services to help people get established in the
community.
"We have found that most of the newly arrived are new to the financial
industry," said Eusebio Rivera, Hispanic Initiative executive for Bank of
America. "Those individuals don't have bank accounts in their country, or they
don't trust the institution, as the banking industries of many Latin American
countries have had challenges in the past."
Many of these immigrants are in the country illegally, but that doesn't mean
they're not bankable, he said.
"They need basic products like checking and savings accounts," Rivera said.
Many banks nowadays accept the matricula consular, an ID issued by Mexican
consulates.
"We're not in the immigration area," Rivera said. "We must see that customers
who come here with business can do it like everybody else." The Department of
Treasury recently ruled that the matricula was an acceptable form of ID for
financial institutions.
Credit unions have been particularly aggressive in going after the market,
experts say.
Credit unions are offering cheaper ways to send money home by way of the
International Remittance Network.
Through IRnet, individuals can send $1,000 for about $10, compared with a $50
fee through Western Union.
Both newly arrived immigrants and those in the transitional period -- those
who have been in the country anywhere from three to 10 years -- prefer to
speak Spanish, Rivera said. This transitional group constitutes 51 percent of
U.S. Hispanics, he said.
"They need credit cards, mortgage loans and car loans," Rivera said. "They are
increasingly acculturated. They're into 401(k) accounts, IRAs, and into saving
for the education of their children."
To tap that market, Bank of America is seeking bilingual associates and will
open test stores in McAllen, Texas, and San Ysidro, Calif.
"They'll be set up a little differently to welcome Hispanics," Rivera said. "It
could be the colors; it could be the look."
Of course, it's not just about language. It's also about culture.
That's where people like Julie Stav come in. A financial planner for more than
20 years, Stav gained recognition with her PBS show Getting Your Share.
She joined efforts with the General Electric Financial Planning Center
recently to create a financial advice Web site in Spanish, midinero.com.
Stav said Hispanics have to overcome cultural roadblocks in order to reap the
benefits of American capitalism.
"A lot of Hispanics believe that destiny is already written," said Stav. And
many Hispanics come from countries where wealth is associated with corruption.
"Many people think that being rich is bad and that God loves poor people
more," she said.
On the other hand, Hispanics accord a great deal of import to family.
"They're interested in planning for their children and grandchildren," said
Paula Elerick Espinosa, financial consultant with Salomon Smith Barney in
Dallas. "My work with Hispanic clients is about the importance of establishing
a relationship with them and their extended families."
Also, Hispanic families invest conservatively and tend to save.
"Hispanics are incredibly good savers. They tend to shy away from debt,"
Elerick Espinosa said. "A lot of that wealth is passed from one generation to
the other."
Financial services companies have realized, at the least, the importance of
services en espaρol.
"Of the 600 certified financial planners that belong to our organization, 1 or
2 percent speak Spanish," said Shashin Shah, spokesman for the Dallas-Fort
Worth chapter of the Financial Planners Association. "There is an untapped
market for financial planning in other languages."
