[IMPACT+: This series features IMPACT posts that take a longer look at vital topics that affect American consumers.]
Every hard-working American deserves financial security through retirement. But achieving financial security is a big challenge for many Americans, including many Latinos.
Nearly two-thirds of Hispanic families don’t have any form of retirement savings account. And for those who do, the median balance is less than $30,000.
Amy Hinojosa, President and CEO of MANA, a Latina advocacy organization based in Washington, D.C., joined me and Juan Jaime, a financial professional from World Financial Group, on a recent Kitchen Table Conversation, where we discussed the challenges that Hispanic and Latino communities face.
Envisioning and creating new and different ways to save earlier and catch up later can help close retirement savings gaps. Life insurers support innovative tools, policies and legislation that further enhance our retirement system and help more Americans plan for financial certainty. Our industry strongly advocated for the passage of important retirement security laws – SECURE Act in 2019 and SECURE 2.0 in 2022. These vital legislative packages help increase access to retirement plans for millions of Americans, including many Hispanic Americans who work part-time or for small businesses.
While the SECURE legislative packages were a good start, more needs to be done. ACLI is committed to helping many more American workers including Hispanic Americans plan and save to achieve financial certainty.
Nearly 1-in-5 Americans is Hispanic. And the Hispanic market is lucrative and growing.
“The buying power of the Hispanic community in the United States is above $2 trillion,” said Hinojosa. “The Hispanic community in the United States would be a G7 country based on its buying power if it were its own country.”
Jaime noted that many Latinos, including his own father, have asked why should they meet with a financial professional if they don’t have a lot of money saved?
“My answer was that maybe that’s why you don’t have money, right?” Jaime said. “Because … we’re not meeting with a planner.”
Indeed, ACLI research has confirmed that families that work with financial professionals to develop a plan are among the most financially secure. Life insurers believe strongly that everyone should have access to financial information, regardless of their income or asset level. That is why we vigorously oppose a fiduciary-only rule, advocated by some, which would eliminate the option for people without the means to hire a fiduciary to work with financial professionals compensated on a commission basis.
“The problem is you’re going to eliminate middle market and low income to be able to have access to these products and services, because now, first and foremost, they’re not going to be able to afford the fee,” Jaime said.
The vital importance of maintaining access to financial information was reaffirmed during a recent Twitter chat co-hosted by ACLI and MANA. The Women’s Institute for a Secure Retirement tweeted that “Latinas need access to savings options that meet their needs as well as access to good, basic financial education and planning information to help them make smart, informed decisions.”
Another obstacle for Hispanic Americans is that they are underrepresented in the financial professional industry.
“I always say that there’s a difference between availability and actual accessibility,” Hinojosa said. “Just because products and services are available to someone doesn’t mean that they have access. They need a culturally competent advisor … they need someone who speaks their language, understands their community, understands their particular family. (They) need to be able to navigate them through these lifetime issues.”
Added Jaime: “The reality is this industry is so wide open for the Hispanic community, so wide open, because what makes us different is the trust is a lot easier for people to speak Spanish to me and say, explain this in my language.”
As the Latino population in the United States grows, the number of Hispanic financial professionals must also increase. America’s life insurers strongly support efforts to boost agent recruitment, retention and diversity. We are pushing for several ways to improve the producer licensing process including making the producer examination available in more languages than English and exploring mentorship and apprenticeship programs that likely will increase entry and retention of Latino producer candidates.
Every American – no matter their age, job, gender or race – should be able to plan for a secure financial future. The life insurance industry will be there, helping them build intergenerational wealth and providing families with a financial safety net that protects them through all stages of life.