Hispanic small-business owners, who believe in overwhelming numbers in the importance of consulting a financial advisor, find themselves deeply underserved when it comes to help from advisors of any ethnic makeup, according to a new survey.
As many as 81 percent of Hispanic small-business owners think it is important to meet with a financial advisor, but only 42 percent say they have an established relationship with an agent, the New York Life survey found.
Six in 10 Hispanic small-business owners have not been approached by a financial advisor and as a result, four in 10 lack life insurance coverage or any estate planning. Almost 30 percent have no retirement plan, the survey of 151 Hispanic business owners found.
If more than half of small-business owners haven’t been approached by a financial professional, that means there’s a need that financial professionals are not meeting, said Hector Vilchis, corporate vice president at New York Life.
Top concerns among Hispanic business owners were not being able to afford college expenses for their children, becoming a burden to family later in life, and saving to generate enough income in retirement.
The survey conducted last year by Geoscape on behalf of New York Life. It has an estimated margin of error of plus or minus 8 percentage points.
Similar Findings Among Broader Hispanic Population
Hispanic-owned small-business have grown to include income tax, bookkeeping, translation and transportation services.
Yet it’s not just those businesses that appear underserved for financial planning needs. The broader Hispanic community is similarly underserved, according to Prudential Financial.
The Prudential survey released in 2014 found Hispanics were half as likely as the general population to have a professional financial advisor.
Even among households with annual income of $75,000 or more, Hispanics receive less contact from advisors even though they are as likely as the general population to work with an advisor, if contacted, the Prudential survey found.
Advisors ignore the Hispanic market — either small-business owners or households — at their peril as 30.5 million entrants into the labor force will be of Hispanic origin, projections by the Bureau of Labor Statistics show.
In 1990, there were only 10.7 million entrants of Hispanic origin.
New York Life said earlier this year that it plans to hire 3,750 insurance and financial professionals this year and that more than half are expected to be women or individuals who represent minority or “cultural markets.”
Last year, 51 percent of the company’s new life insurance sales came from African-American, Chinese, Korean, Hispanic and South Asian markets, the company said.
Demographic data show that 77 percent of Hispanics live in the west or the south.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]
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