An Important Demographic for Advisors to Cater To

Increasingly, advisors are getting the message that working with more female clients isn’t just an avenue for “doing the right thing,” but it’s also essential to bolstering practice longevity.

Acknowledging those points, it’s also worth noting some groups of female clients and prospects are potentially more prepared to engage with an advisor than others. Minority women, including Hispanics and Latinas, are among the future growth drivers of the advisory business and it’s on advisors to understand their unique ambitions and goals.

However, the unfortunate reality is some advisors aren’t answering the call when it comes to broadening their client bases. They should alter that thinking and simple math explains why that’s the case. In 2020, the combined Black and Hispanic population in the U.S. was 109 million, according to the Census Bureau.

“The Hispanic or Latino population, which includes people of any race, was 62.1 million in 2020. The Hispanic or Latino population grew 23%, while the population that was not of Hispanic or Latino origin grew 4.3% since 2010,” notes the agency.

Why Hispanic Women/Latinas Matter to Advisors

Obviously, the above math is compelling. Hispanics/Latinos represent the fastest growing demographic in the U.S. However, there are significant wealth gaps between this group and their white counterparts and those gaps are pronounced among Latinas. The median salary for Latinas badly trails those of white men and women.

Fortunately, there is good news and it’s data advisors should pay attention to. The Federal Reserve’s latest Survey of Consumer Finances indicates Hispanic/Latino household has increased 7% annually over the past 20 years. Specific to the women in those groups, they’re increasingly confident in their investing knowledge, potentially signaling they’re open to professional advice.

Citing J.P. Morgan Wealth Management’s 2023 Diverse Investor Study, CNBC’s Kamaron McNair reports “Latina women are moving in the right direction: 52% of Hispanic and Latina investors say they feel more knowledgeable about their investments and retirement planning than they did five years ago.”

Hispanic clients and those that want to expand their exposure to these clients should also note these groups favor investment strategies that feature women-owned or female-led companies as well  as though as driving gender and racial equity and diversity.

“59% of Black Americans and 57% of Hispanic Americans want to take an active role in selecting the stocks, bonds or funds that make up their investment portfolio, compared to 46% of White Americans,” according to the aforementioned JPMorgan survey.

More Reasons to Cater to Hispanic Women/Latinas

For advisors, Hispanic Women/Latinas aren’t just new a client base/revenue stream. These women represent avenues for advisors to impact the often elusive “greater good.”

The reasoning is compelling and simple. Not only are Latinas increasingly likely to be college-educated, breadwinners and caretakers of families, but they’re also likely to be the stewards of a variety of assets, including investment portfolios, life insurance policies, real estate and small businesses. Plus, they’re potentially more likely to pass on financial education within their communities and families – a plus for advisors.

“Getting more Latinas investing can help improve financial literacy in the community because not only are the individual investors learning and seeing the impact of having money invested, but they take those lessons home to their kids or older relatives to help them learn as well,” according to CNBC.

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