As one of the fastest-growing demographics in the U.S., Hispanic Americans continue to play a larger role in the U.S. economy each year. They’re enjoying more purchasing power and are on track to accumulate a staggering $113 trillion in wealth by 2050.
What’s more, while Hispanic Americans make up 20 percent of the population, less than 10 percent of financial advisors identify as Hispanic.
This rapid population growth, increasing economic power, and ensuing wealth isn’t just another opportunity, we believe it’s an absolute necessity for financial advisors who want to stay relevant and grow their books.
The Diversity of the Hispanic Diaspora
The Hispanic community includes people descending from Spain or who are from other Spanish-speaking countries. This diverse group spans a vast geographical area with distinct communities, each with their own rich cultural heritage. The Hispanic diaspora includes people of Mexican, Puerto Rican, Salvadoran, Cuban, Dominican, and Colombian origin, among many others. That’s why serving Hispanic clients requires an astute cultural awareness, keen trust-building skills, and a willingness to adapt in order to meet evolving needs.
Advisor Perspectives
To help us explore how financial professionals can connect with and build trust with Hispanic clients in their communities, we spoke with two Advisors—Tim Avila, a Carson Partner and Lead Wealth Advisor at Yuma and Imperial Valley Wealth Management in Yuma, AZ, and Daniel Leal, a Wealth Advisor at Carson Wealth Omaha. Our discussion revealed valuable insights, including practical steps advisors can take to create impactful relationships with this underserved community.
The Essential Step: Spanish Speakers
It may seem obvious, but language plays a central role in building trust with the Hispanic community. The first step to serving Spanish-speaking clients is to simply have someone available who can speak with them in their first language. By doing this, you’re immediately sending a clear message to the Hispanic community: we’re here for you.
“The moment people hear something in their language, their ears perk up—they feel recognized,” Avila said. “Any interaction we have with clients is first and foremost about comfort and trust. The easiest way to break that barrier is to have someone who can at least say a few words in their language. That immediately takes down the wall.”
Understand, Educate, and Build Trust
As is true for most clients, cultural experiences heavily shape their financial habits. That’s why it’s critically important to understand the unique cultural experience of Hispanic Americans in your community. For Leal, this means being aware of the prevalence of pension-based systems and even corruption in Spanish-speaking countries in Latin America.
“You see a culture that’s always very heavy on cash and things that will guarantee a return,” Leal said, “especially with older generations who may not trust banks or financial institutions. Even second and third generation Hispanic clients are more conservative, relying on CDs and other conservative yield vehicles.”
That’s where education comes in. Leal is active in the local El Centro de las Americas in Lincoln, NE, a nonprofit organization with the goal of educating and empowering Hispanic and Latino families. With El Centro, Leal hosts financial literacy workshops, spanning topics like the basics of checking and savings accounts to the importance of getting started in investing with retirement accounts.
These educational workshops provide opportunities to identify underserved people and immediately build trust with them. He described one experience from a presentation he gave at the Carson home office:
“We said, show of hands, who has more than a year’s salary in cash? And a majority of their hands went up,” Leal said. “They could at least be putting that into high yields.”
Once Leal showed the attendees how they could better invest their money, he earned their trust.
“Once we trust you, we are a very loyal culture—we aren’t going to switch,” Leal said. “My parents have been going to the same dentist for decades.”
Avila agreed that education was important to alleviating skepticism and building awareness in the Hispanic community. He also pointed out the importance of generational dynamics and bringing in multiple generations for consultations and discussions. While first-generation clients may be hesitant or unfamiliar with financial planning, their children—often bilingual and more financially literate—are curious and open to building wealth. First generation Hispanic Americans will be more likely to meet with financial advisors with their children—and more comfortable with moving forward.
A Growing Opportunity
The Hispanic community represents a rapidly growing share of America’s wealth and workforce. Advisors who take the time to understand cultural dynamics, invest in bilingual support, and build trust through local groups and community events will be positioned to welcome this historic growth opportunity in the Hispanic population.
At the end of the day, the Hispanic community is looking for the same service financial advisors are already providing their clients.
“They don’t want to work forever either,” Avila said. “They want to retire and live well, just like anybody else.”
8408149.1-0925-A
