The New Hispanic Wealth

From OWS Magazine | December 2007 Issue

By Gerri Leder

December 1, 2007 - The Hispanic population is one of the fastest growing wealth segments. Hispanic households earning $100,000+ are growing eight times faster than non-Latino households, states a recent Merrill Lynch study cited by Miami-based financial advisor Maria Arazoza. And it takes more than speaking Spanish to win the trust and confidence of this increasingly wealthy segment, she says.

Maria’s father was a Cuban-born political exile. After his assets were confiscated in Cuba, he moved to

Miami and subsequently joined a small offshore company. He joined Merrill Lynch in the late 1970s. By 1987, Maria joined his thriving

Miami practice, which was mostly in commodities futures, and she began to build and diversify the assets into more traditional investment classes.

Father and daughter continued to work together until he passed away recently.

Maria’s Hispanic clients reside here as well as in

Latin America. Some of her clients resettled from Latin America and are creating wealth as business owners, in contrast to those who are already prosperous and remain in their native country, whether that is Peru or the

Dominican Republic or elsewhere. Many of her U.S.-born clients are college-educated and second generation like she is. But they also relate closely to their Hispanic culture. Such is the Hispanic market-hard to generalize but intensely loyal to advisors like Maria, who has earned her firm’s International Financial Advisor designation after meeting training standards to work with offshore clients.

A graduate of Florida’s

International University, she has attained both her CFP (certified financial planner) and CIMA (certified investment management analyst) designations. She oversees $400 million in assets and about 40% of her customers are Latin American-based. The balance is U.S. Hispanics. Between Maria and her husband, a tax attorney of Cuban descent, she is fully immersed in the cultural network. Unlike most successful advisors who use cold-calling and seminars to attract new clients, the majority of Maria’s new clients come through referrals and community involvement. When she seeks an introduction to a prospect in

Latin America, “it is usually only a half-degree of separation,” she says.

As the families of her clients have grown up, Maria works with up to three generations of the same family. “Hispanics are very family-oriented,” she says, pointing out that they are inclined to work with the family’s trusted advisor. Though many traditional Hispanic stereotypes fall short, one accurate generalization is that advisors who understand their culture and attitudes will be more likely to gain their confidence.

“You don’t have to be Hispanic…(but by the same token), just because you speak Spanish doesn’t mean you will be effective,” she notes. A few examples highlight the point. Hispanic clients will look for a personality that is open and approachable. You will find that Latin American clients treat business like family: it is customary to invite the spouse to a business lunch. If the husband takes the lead in the relationship, don’t be lulled into speaking only to him. “Women are great influencers,” she points out. Often a woman keeps her own counsel during the meeting, only to express her views to her husband later in private.

There’s much more to learn about what may come naturally to Maria. She was pleased to learn that Merrill has created its own Hispanic Professional Network, made up of both Hispanic employees and those who want to work with Hispanic clients. Maria participated recently in a panel addressing 200 Merrill employees and she serves on the Diversity Advisory Council, an advisory group to senior management.

GERRI LEDER is an industry marketing consultant and can be reached at leder@ledermark.com.