The wealth gap between Black and Hispanic families and their white counterparts widened by more than $1 million in 2022, according to a study by the Urban Institute. That same study found that just 6% of Hispanic households received an inheritance in 2022, compared to 28% of white households. Yet, Latinos’ contribution to the U.S. economy reached a record $4.1 trillion in 2023.
The statistics highlight the need for financial advice among the Latin American community, something that is perhaps even greater today, given the current geopolitical environment and immigration reform in this country. The challenges facing the Latin American investor population trickle down to the advisors serving them, who are often Latino themselves.
The upcoming SER Summit, a conference designed for Latinos in financial services, has sold out for its third year and will highlight the most pressing issues facing Latino advisors and investors at a time when this community needs advice more than ever. The conference, slated for Sept. 3-4 outside of Chicago, was founded by Vanessa Martinez, CEO and managing partner at Expressive Wealth, and Ana Trujillo Limón, director of marketing and community for Corazon Financial Advocates. The event aims to give a voice to Latino advisors and build community among this minority advisor population, which has historically been lacking.
Louis Barajas, CEO and founder of International Private Wealth Advisors and a speaker at the SER Summit, said the industry needs more Latino professionals to help this underserved community and close that wealth gap. In 2023, Hispanics represented just 3.1% of all CFP professionals, although the percentage is steadily rising.
Barajas says SER is still a small gathering of about 140 advisors, but he said it will evolve over the years to have more influence in the Latino community.
He works primarily with Latino clients out of Santa Ana, Calif., which has been a hotspot for U.S. Immigration and Customs Enforcement raids, spurring clashes with law enforcement and the deployment of the National Guard.
“The Latino community right now, we feel like we’re under fire,” Barajas said. “And for a while it was like everybody was having a tough time sleeping, but I think we’re just getting used to what’s going on right now.”
A couple of his clients in the U.S. under the Deferred Action for Childhood Arrivals (DACA) policy have been detained. Two other clients, who came here undocumented 30 or 40 years ago, have been deported. He’s focused on figuring out which of his clients have that kind of threat and what they can do from a financial planning standpoint.
“I’ve been providing information on what to do if you fear that you may be deported, or if you’ve had family members deported,” he said. “And right now I’m really focused on the estate planning because people are being deported who have homes here in residence that they’ve bought. They’ve lived there their whole life. I’ve got one client right now who’s Colombian, who has been living here, owns a home, has a retirement plan, has $500,000 in a retirement plan. They’ve been here for 20-something years, and they just sold everything and went back to Colombia because of their fear of what’s going on.”
Even Barajas, who was one of the first Latino CFPs in the country, has started walking around with his passport.
“We’re under attack by the racial profiling, by the administration, because we haven’t built enough wealth to have enough power in this community,” Barajas said. “It tends to be he who holds the gold rules. There’s a huge wealth gap among the Hispanic community in America now. We’re trying to build wealth here… [A lot of people] may not be wealthy, but they have their homes in Santa Ana, they have their homes in East L.A., in Phoenix and Miami. And we’re just saying, how do we protect what they already have in the United States?”
Barajas said much of the Latino population is underserved when it comes to financial advice, given that many can’t afford it or don’t meet the minimums. He recently launched an organization, Corazon Financial Advocates, in which he’ll be training leaders in underserved communities to be financial coaches. He’s got about eight people signed on to help.
Elaine King, the founder of Family and Money Matters, said the U.S. immigration issues are bringing up uncertainty for her clients in Latin America who have invested in U.S. markets. Some question whether the U.S. is still the safe haven it used to be.
“Our current president sometimes threatens people that don’t follow his policies, either by deporting them or freezing assets, or if something happens with a specific country,” such as sanctions, she said.
In the Latino community, there is a need for correct information about finances.
She said she recently got a phone call from a man in Texas who needed to leave the country. He had a 401(k) with assets in it, but when he was initially hired, he gave them his neighbor’s Social Security number.
“I said, ‘That 401(k) is legally not yours. It’s your neighbor’s,’” she said. These types of things are happening because they’re not getting the proper financial advice in the first place.
In many cases, she finds Latinos are afraid to talk to advisors because they think they’re with the Internal Revenue Service.
“The current policies are scaring immigrants, and it affects the Hispanic market because everybody knows somebody whose life and status are at risk. I have friends that don’t want to drive. I have professionals that I used to hire that walk instead of driving because they’re scared,” she said.
There is a large market of Hispanic people who need financial advice, but there are not enough Hispanic advisors.
A lot of Latinos distrust the financial system, so don’t end up participating in 401(k)s, etc., said Luis Rosa, founder of Las Vegas-based Build a Better Financial Future, co-founder of the BlatinX (BLX) Internship Program and LatinXcellence, an initiative that seeks to bring awareness to and help close the wealth gap in the Hispanic community.
Rosa moved to the U.S. from the Dominican Republic when he was 11 years old, at a time when that country was under a communist government. A lot of Latinos believe the U.S. government is like that. For example, he grew up seeing his grandfather putting cash in a shoebox under the bed.
However, he said the more Latinos get into financial services, the more consumers will feel comfortable participating in the financial system, or at least having an initial conversation with an advisor.
Because the Latino advisor community is so small, many resources needed to get into the industry aren’t there for many, Rosa said. The industry can also be intimidating, but the SER Summit hopes to change that. He comes to the conference to get that sense of community and belonging.
“We want to build true connections,” said Expressive Wealth’s Martinez.
SER has a track dedicated to next-gen advisors and financial planning students. The content will dig into the different career paths in the financial services space, she said.
There tends to be a lot of fallout among next-gen advisors in the Latino community for fear they won’t be successful, but the SER Summit can inspire them because they see other advisors finding success, she said. It can also motivate them to keep going because maybe they get an additional tool they can implement to be successful.
“We’ve heard this, which is the heartbreaking side of it, is some people are told, ‘You’re just not meant for this industry,’” Martinez said. “Creating this shows them, ‘Yes, you are, and you can succeed. And it’s not all ugly.’”
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