The buying power of Hispanics in the United States has grown by over 200 percent since 1990. Companies from many industries are feverishly trying to reach this new market. Venezuelan-born Rafael Gutierrez, director of Hispanic Markets at Allianz Life, talks about the unwritten rules of the Hispanic market.
 | Rafael Gutierrez, Director of Hispanic Markets at Allianz Life North America"We found that Hispanic women were more willing to buy from non-Hispanic financial professionals who understand their culture than from Hispanic one" (Photo: Allianz) |
There is a lot of talk about the growth of the Hispanic community in the United States. How important is the Hispanic market?
Well, we know that the buying power of Hispanic Americans is increasing - faster than their numbers. In 1990, Hispanic Americans had a purchasing power of 212 billion dollars. In 2005, their buying power was 736 billion dollars. That is 247 percent growth in just one of the multicultural segments of the U.S. population. The Asian and Hispanic segments are the ones that are growing the most, but the African American market is also expanding.
Do you target Hispanics just like you would the average American?
No. If you come here from Latin America, then most often your understanding about the financial world is almost zero, so you have to target much differently. Our first step is to provide the tools, marketing materials, and organized workshops/training – whatever it takes to provide the consumers and financial professionals what they need.
First, we found that Hispanics don’t like being asked too many questions. They are not used to it. ‘Why do you ask so many questions,’ they would often ask. So we developed a simplified life insurance application form.
Second, many Hispanics don’t trust financial institutions. In many Latin American countries, people saved their money in American dollars and then saw it devalued to nothing. For example, in this decade, we saw how Argentina – financially a very strong country – witnessed a financial crash overnight. Banks were closed and people lost large amounts of their savings. So they lack trust with financial institutions, particularly Hispanics who are highly educated and professional.
 | Picture Gallery (click on the image to start)Demographic maps about minorities and population change in the United States based on the U.S. Census 2000 (Source: www.censusscope.org) |
When you look at financial services, do Hispanic Americans buy similar products as other Americans?
Hispanic Americans like to buy products that have guarantee values that make sure that it will protect their families and they would not lose money. What I always tell our financial professionals who are not multicultural is that for Hispanics, family is very important, especially the children. This is true for any first generation of immigrants. They all share this. You didn’t move here if you weren’t thinking about providing something better for your family.
One thing that you hear around Latin Americans is that the family will take care of you. ‘If something happens to me, my parents will take care of my children and my wife.’ Well, that was true in the country of origin, where families lived close to each other and help each other financially, but here in the United States, that is almost impossible, because of the distance between family members and the cost of living.
Given all these special demands, do Hispanic clients prefer to work with Hispanic agents?
There are different groups. If you are coming from a Latin American country and you do not speak English, you will definitely want someone to speak Spanish with you. So that’s a given. The second group of Hispanics actually speaks English, but they are very influenced by their Hispanic culture. They probably speak Spanish at home, but they speak English at work. I am an example. I speak Spanish at home with my kids, but I speak English outside of my home.
But here is something interesting: Allianz did a study (“Women Money and Power”) and we found that Hispanic women were more willing to buy from non-Hispanic financial professionals who understand their culture than from Hispanic one.
I was really surprised, and asked people from the focus group, ‘why is that?’ The reason was that they felt that someone who came to the United States like they did would not know as much about the financial world and the right products for them as someone who had grown up in the United States. A lot of our non-Hispanic financial professionals say, ‘I don’t speak Spanish. I cannot go into that market.’ But the study shows that this is not the case.
Looking ahead at the next several years, what will be the big financial trends in the Hispanic market?
Hispanics from all over the world will continue to come to the United States, and as I look ahead, I believe that we should continue working in providing the tools, marketing materials, and assistances to help our representatives work in this segment. Hispanics really want to protect their families. They don’t know what products and services are available, so it is our job to provide this information.
The second big opportunity in the Hispanic segment is retirement. Many Hispanics have no notion of retirement. A lot of them will work until they die. Just look at my father: he is 67 and I asked him, ‘Dad, when will you retire?’ And he says, ‘I won’t retire. I love what I am doing.’ So he keeps working and working and working.
This will be a big field of work, informing them about retirement planning. Annuity products, for example, are completely new to Hispanics. Most of their savings are in certificate of deposits in banks and in real estate. The financial growth opportunity in the U.S Hispanic market is enormous and this growth will continue in the decades to come.
editor: Thilo Kunzemann
publishing date: September 11, 2007
