Young, English-Speaking Hispanic Adults Embrace Investing.

Scarborough Research released a study which finds that young, English-language dominant Hispanics are 29 percent more likely than all Hispanic consumers to live in households that have financial investments. Conversely, Hispanics ages 45+ who primarily speak Spanish are 18 percent less likely than all Hispanics to live in households that invested.

The Scarborough study analyzed 28,000 Hispanics in the 25 local U.S. markets most densely populated by Hispanic consumers. The report found that almost half (46 percent) of English-language dominant Hispanics ages 18-44 (who account for 29 percent of all Hispanic consumers in the study) live in households that have some type of financial investment. When it comes to diversification, these investments are spread across a wide variety of services. Twenty-three percent have stocks or stock options (they are 34 percent more likely than all Hispanic consumers to live in a household that has made this type of financial investment). Twenty-two percent have mutual funds (38 percent more likely), eleven percent have bonds (36 percent more likely), 12 percent have money market funds (26 percent more likely) and seven percent have a second home or real estate property (18 percent more likely).

Traditionally, older consumers have accumulated the most wealth and represent a lucrative target for financial marketers. This is also true among Hispanics; however those who are 45+ and English-dominant (who account for 11 percent of all Hispanics in the study) are considerably more likely than their Spanish-dominant contemporaries (12 percent of all Hispanics in the study) to make use of financial investments. Twenty-four percent of English-dominant Hispanics ages 45+ live in a household that has used mortgage services during the past year (versus 12 percent for Spanish-dominant Hispanics ages 45+); 15 percent have IRAs (versus seven percent of Spanish-dominant Hispanics ages 45+); and 27 percent have mutual funds (versus nine percent of Spanish-dominant Hispanics ages 45+).

Spanish-language dominant Hispanics ages 45+ are actually less likely than even younger Hispanics to have investments in their household. Over three-fourths (76 percent) of this group has no household investment whereas 66 percent of all Hispanics ages 18-44 (both Spanish- and English-dominant) have no household investment. Slightly more than one-half (54 percent) of English-dominant Hispanics ages 18-44 have no household investment. The non-investment rate of English-dominant older Hispanic consumers is 44 percent which is relatively low among Hispanics. This group nonetheless provides much opportunity for financial service marketers as their investment rates tend to lag behind those of the general public.

“Across the board, there are tremendous opportunities for financial marketers to grow business with Hispanic consumers. But lumping together all Hispanics as one homogenous group in a marketing plan is a mistake,” said Bob Cohen, Ph.D. president and chief executive officer, Scarborough Research. “Rather, this is a sector of the consumer marketplace that has complex segments within itself. The key to successful marketing is developing an understanding of the generational orientation, language usage, acculturation patterns, lifestyles and media preferences that exist among the many segments of Hispanics consumers.”

“As we see in the Scarborough study, younger, acculturated Hispanics are likely consumers of financial investment products where as their older, less acculturated parents are more likely to practice more traditional financial management, including forestalling spending and saving for retirement,” said Dr. Cohen. “At the same time, with at least half of Hispanics in each segment reporting that they have no investments, we can see that there is room to grow these services with both the likely and unlikely Hispanic investment consumers.”

“There is obviously an opportunity to create programs that target the younger Hispanic investor. But financial services marketers will also benefit from establishing relationships with older Hispanics—even the Spanish-dominant segment,” said Alisa Joseph, vice president of advertiser/marketer services, Scarborough Research. “For example, with the right messaging and benefit offering, marketers can educate Hispanic consumers about the value of investing as a way of making one’s savings grow and the empowerment that can come with full participation in the economy.”

For more information at http://www.scarborough.com