Livin’ la vida broker: Investing new Latin love

Josephine Infante no longer breezes past the financial pages of the New York Times to get to the international section.

A first generation Dominican-American, the executive director of the Hunts Point Economic Development Corp. in the Bronx joined the investing class last July when she took her first steps toward retirement planning at the age of 53.

Ms. Infante, a single mother of two adult daughters, may seem like a late bloomer, but there are many others like her in the Latino community. Edwin Rodriguez-Pagan, a 48-year-old dentist in Barraquitas, Puerto Rico, started investing just two years ago.

For them and other Latinos, trust plays a major role in choosing whether to invest or just to have a plain old bank account like their parents had. Ms. Infante and Dr. Rodriguez-Pagan both put their trust in financial adviser, Marlene Cintron, who is Puerto Rican.

“I had to find someone who understood me as a Latina,” Ms. Infante says.

While today’s startling array of financial offerings is still foreign to most Latinos, Ms. Infante believes her companeros will catch on quickly.

“We see someone do it, we will do it too,” she says. The demographic data are compelling. The United States has the world’s fifth-largest Hispanic population. The Census Bureau reports 7,606,000 Hispanic households in the United States.

They have yet to share equally in the American Dream. The median income for Hispanic and non-white families was $23,300 in 1998, according to the Federal Reserve — far below the $37,700 median income for non-Hispanic whites.

Perhaps that’s why few financial services giants have caught on with Latinos. Merrill Lynch, Putnam Investments and Fidelity Investments offer prospectuses, educational brochures and videos in Spanish to their 401(k) clients. State Street Research and Management Co. went further, also offering a Spanish-language website.

The only financial services firms among the top advertisers to Hispanics in 1999 were Allstate Corp., No. 14, and American Express Co., at No. 46, according to Hispanic Business Inc.

Latino financial advisers interviewed by InvestmentNews say their own efforts — not their firms’ — bring in Hispanics.

“Most brokers are looking for the big fish. I don’t blame them; I do it myself. It’s easier to call one client with $1 million than 100 clients with $10,000,” says Juan Cabanas, a 30-year-old Mexican-American broker who works out of Paine Webber Group Inc.’s San Diego office.

He says Latinos’ expectations are much different when it comes to investing. Mr. Cabanas’ client roster is 100% Hispanic. Most of his clients are over 45 and have up to $1 million in investible assets.

Then there’s Ms. Infante’s auto mechanic. The Mexican-American uses his mattress as a bank for the $25,000 he has saved up.

Troy Shaver, executive vice president and director of mutual funds at State Street Research in Boston, says Latinos have about the same per-capita amount invested as other groups but their population is growing much faster.

investor percentage the same

“Roughly 57% of United States households now own mutual funds and stocks. I see no difference on a percentage basis of the number of Latinos investing in 401(k)s,” he says.

Ms. Cintron, who works at Merrill Lynch & Co. Inc. in New York, offers this explanation: Hispanics “have not been invited in general terms to the financial table. The financial pages look complicated and they’re not bilingual. Our community is concerned about losing money they have worked really hard to make,” she says.

Seventy five percent of Ms. Cintron’s clients — who hail from as far away as Spain and as close as Spanish Harlem — are Latinos.

Charles Gonzalez, a New York certified financial planner and author of “Yes You Can! Si Se Puede — Every Latino’s Guide to Building Family Wealth,” points out that among the hundred or so books published every year for investors, only two have been written for the Latino community. His was published in 1998, and in 1999 Bloomberg Press published “The Latino Guide to Personal Money Management.”

Clearly unhappy with the Hispanic media, Mr. Gonzalez says, “Our own community and leadership has blinders on.” Major networks like Telemundo or Univision have little or no programming geared toward retirement planning or investing in mutual funds.

“As Latinos, we tend to be conservative, afraid of losing,” he says. “We start more businesses than anyone, yet at the same time we keep money in the bank instead of in a growth fund,” he says.

Hispanic businesses are thriving. In 1997, the most recent year for which data are available, the Small Business Administration’s office of advocacy in Washington estimated the number of businesses owned by Hispanics at 1.4 million, a 232% increase since 1987. Self-employment was common among Hispanics, with 661,000 owning their own businesses in 1998. In light of these statistics, Mr. Gonzalez started Milenio Financial Services in the South Bronx.

“If there was ever an opportunity to participate where the color of your skin doesn’t matter,” says Ms. Cintron, “it’s in the financial markets. Green is green.”