The Tomas Rivera Policy Institute
Examines the Rising Affluence of Latinos
The Tomás Rivera Policy Institute (TRPI), based at the School of Policy,
Planning, and Development at the University of Southern California, assembled
a host of the nation’s top corporate, financial and Hispanic community
oriented companies and organizations at the Beverly Wilshire Hotel to shed
light and discuss the needs of the next significantly affluent generation
in America.
The dynamic mobility of America’s Hispanic middle class will be the
next generation to replace aging American Baby Boomers and they are the fastest
growing segment of the middle class in America. The income and spending power
of this demographic is just beginning to reach significant potential because
the Latino community is 5-10 years younger than the average U.S. population.
Most business strategies currently focus on the first-generation or recently-arrived
Latino immigrant; however, the majority of U.S. Latinos are not recent immigrants,
and are established in (or quickly moving into) the American middle class.
“It’s not that the war on poverty is over, but there is a common
misconception that all Hispanics in America are undereducated and low-income.
The reality is that there is an
emerging Hispanic middle class, and it holds tremendous potential to be
a significant market force,” said Harry Pachon, Ph.D., president and
CEO of The Tomás Rivera Policy Institute. “As the American ‘boomer’
generation moves closer to retirement and their exit from the workforce, there
are many middle class and upscale Latinos who stand poised to fill the pending
economic gap.”
One significant indicator of this coming trend is in the increase of high
net worth Hispanic individuals, defined as those with financial assets in
excess of one million dollars. According to a recent Merrill Lynch/Cap Gemini
Ernst & Young report, these high net worth Hispanic-Americans indicate
that wealth growth and preservation are both key financial goals, thereby
increasing their need and desire for financial planning services.
Another noteworthy indicator of this trend is the very strong statistics around
home and real estate ownership of this Hispanic demographic. U.S. Census data
demonstrates a strong trend in the rate of property and home ownership that
coincides with the maturing affluence of the Latino middle-class.
How can American companies and financial service institutions position themselves
to cater to the needs and expectations of this population is a key concern
discussed at the proceedings.
“Methodologies, marketing
and advertising currently used to appeal to the non-Hispanic market will
simply not be effective in reaching the Hispanic middle or affluent classes
in the future,” according to Julie Pabich, a conference presenter and
research consultant with Integras, a Division of Claritas, Inc. “How
we speak to this audience and what will appeal to their acculturated senses
is what matters. Organizations need to attune themselves culturally in order
to be ready to interact with this generation.”
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