Prudential releases survey: “The Hispanic American Financial Experience”

Hispanics eschew debt, have difficulty building assets, and generally have less access to workplace-based retirement plans, according to a nationwide survey by Prudential Financial, released on Wednesday.

Latinos in the United States are are also far less likely to use a professional financial advisor than the general population, regardless of their income levels. Yet they are receptive to advice, according to the research report, “The Hispanic American Financial Experience.”

Prudential chose Miami to present its findings because of the diversity of the community here, said Alicia Rodgers Alston, vice president of global communications for Newark-based Prudential Financial. Alston presided over a lunch presentation for about 80 attendees at the Adrienne Arsht Center for the Performing Arts.

“As an industry, we haven’t put ourselves out there. The outreach hasn’t been there,” said Alexandra Galindez, vice president of multicultural marketing for Prudential. “This is our way to educate a generation that hasn’t been spoken to.”

Hispanics represent the fastest growing segment of the U.S. population, expected to grow 167 percent from 2010 to 2015, according to the U.S. Census. That is in comparison to a projected 42 percent growth rate for the overall U.S. population during that same time frame.

In the United States, the Hispanic population is young, mobile, growing and has skyrocketing spending power, making the segment highly desirable for marketers, according to a report released in April 2012 by Nielsen. The group's buying power reached $1 trillion in 2010 and is expected to grow 50 percent by 2015, hitting $1.5 trillion, Nielsen said.

According to the survey of more than 1,000 self-identified Latinos, Hispanics anticipate retiring later than the general population, at age 66 or later. That compares to age 63 for the general population and for African Americans. Once retired, the Hispanic community plans to remain active in the workforce, with 73 percent saying they may work at least part time after retirement.

The study found that Hispanics’ top financial priorities are on saving for retirement (53 percent), reducing debt (52 percent), building an emergency savings account (42 percent), and funding education for children or grandchildren (31 percent).

“A Latino family is just as concerned about making sound financial decisions as any other family in the country,” said Anna Cabral, former U.S. Treasurer, who currently serves as the unit chief for strategic communications in the External Relations Division of the Inter-American Development Bank. She also works as a spokeswoman for Prudential on the study.

Yet, when compared to the general population, Hispanics surveyed generally have less access to workplace-based retirement plans (72 percent versus 83 percent). They are also half as likely to to currently have a professional financial advisor. Such factors may create financial challenges for Hispanics as retirement approaches, Prudential said.

For Hispanics, trust is crucial in building a relationship with financial advisors, the survey revealed.

“My father trusted the mattress more than he did the bank,” said Teresa Rodriguez, a Miami-based, Cuban-American broadcast journalist with Univision, who was a keynote presenter at the luncheon. “It is a mentality that has changed, but not enough.”

Rodriguez shared her own personal stories of taking out student loans to fund her college education, and, as a young widow, saving for her children’s education, with the help of a financial planner.

“Latinos are so afraid to ask for help; we’re so proud,” Rodriguez said. “But ask for help — it’s out there.”

Many Hispanics have an aversion to debt, but sometimes taking out a loan is critical for achieving a goal, said

“Latinos have a difficult relationship with debt. It’s a topic we don’t discuss at the dinner table, and we don’t disclose how much we make,” said Cabral, who was also a keynote speaker at the luncheon. “But it’s time we start talking about these things.”

Cabral advised the audience to examine finances with an advisor yearly, just as members would visit a doctor for an annual physical exam. She turned to personal experience, noting that she spends $5 a day on Starbucks’ lattes but wonders if the return on investment — like “my perkier attitude” — trumps the long-term value of putting the $25 a week into her retirement account.

She emphasized three words for financial health: “save, grow and protect.”

While the Hispanic community is, on average, a young community, they should still be saving for retirement, experts say.

Josie Bacallao, president and chief executive of Hispanic Unity of Florida, a community agency that serves people from 25 different countries, said education is key to Hispanics’ financial future.

“Learning how to manage their money and how to grow wealth here is fundamental to their family’s success, and understanding how the [financial] system works is critical,” said Bacallao, an attendee at the luncheon.

Prudential’s research was conducted from Oct. 28 to Nov. 18 by Gfk Custom Research. A total of 1,023 Americans, ages 25 to 70, who self-identify as “Hispanic” were polled. The survey was designed to broadly represent characteristics of the 9.6 million Hispanic households with incomes of $25,000 or more, Prudential said. The margin of error was 5.5 percent.

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