Hispanics Are Seen as Ripe Clients for Wealth Business

Article excerpt

Many banking companies have developed wealth management assets by targeting niche groups like professionals, women, and African-Americans, but observers say they are missing one particular niche: Hispanic-Americans.

Rich Rodriguez, a native of Mexico City who is forming his own bank in Oxnard, Calif., says he has had offers to move his accounts into a private bank, but no wealth management provider has targeted him specifically as a Hispanic-American.

"If they approached me as a Hispanic, it wouldn't offend me," he said. "I'm proud that I'm Hispanic."

Nearly 12% of the nation's 22 million Hispanics had $50,000 or more of income in 2006, and 40% had $20,000 to $49,999, according to the Pew Hispanic Center.

Fiserv Inc., which provides information technology services to financial services firms, said it does not know of any banks that offer wealth management products and services targeted specifically to Latinos.

The vendor said it does have clients that cater to Hispanics, but many of them are community banks that do not have substantial investment services. Clients that do provide wealth management typically offer it to all kinds of Americans, including Hispanics, it said.

Banks that once catered to Hispanic communities, including Security One Bank in Falls Church, Va., Libertad Bank in Austin, and Oasis Bank in Houston, have started targeting a wider variety of clients in the face of a challenging environment for the financial services industry.

Many Hispanic-Americans invest with Banco Popular North America, a unit of the Puerto Rican company Popular Inc. that provides investment services such as retirement, college, and estate planning.

The bank says it does not target its investment services business solely to Hispanics, who make up around half its customer base.

"Our customers are so diverse" they range from Koreans to Poles, said Juan Carlos Cruz, a spokesman for Banco Popular. "We're dedicated to each group."

National City Corp. has positioned itself for many years as a "Latino-friendly" company by taking steps such as advertising its banking products in Spanish. The Cleveland company also provides investment services such as retirement and college planning, but it says those are not targeted specifically at Hispanics. "We do try to push those products to individuals who are ready for them," said Carlos Fuentes, the vice president of affinity group marketing at Nat City. "That's not unique to the Hispanic population."

Some say banks could create investment products specifically designed for Hispanics.

Dan Hudson, the chief executive of the Dallas consulting firm NuBank Group, says the family-oriented Hispanic community would respond well to the concept of college savings plans, for example. …