• by Manuel Carvallo , Columnist, June 22, 2017

I appreciated last week’s “Social Listening Insights On Hispanics’ Financial Needs” but I don’t believe it goes far enough into the psychology of how Latinos relate to old age; recommendations were too generic. I hope to provide you with further insight into this topic.

1. Alluding to the "carpe diem" mentality of living day-to-day reinforces a stereotype that distorts the reality of hard-working Hispanic immigrants. Many Hispanics think about retirement and are making contributions to a pension. That would include 65% of our community, based on our research. However, it is not their own pension account. Rather, that is the actual pension expense that goes toward supporting their parents or in-laws. 

Creating a communication strategy about preparing for retirement has to consider that an unwritten social contract exists within the Hispanic community. Working children support their parents or in-laws financially in old age, and this leaves little or no additional financial capacity to save for their own retirement. This inability to save will become a burden for their children, who are expected to cover their parents’ retirement. Our survey shows that 65% of respondents are providing support to their parents or in-laws and 67% of respondents expect their children’s support in old age. 

Any communication regarding retirement to Hispanics needs to consider that many working-age Hispanics are in the difficult position of caring for their elders and saving for themselves.

2. I strongly agree that culturally appropriate financial education content is needed. There is a lot of financial education material on the market. Some of it is even translated into Spanish. The problem is that there is very little financial literacy material that considers the specific cultural characteristics of Latinos or the immigrant population. It is, in fact, very scarce. 

The recommendation to “develop stories about your brand’s unique approach to financial education" needs to be carefully implemented. There is a problem when instruction crosses the line and becomes mostly marketing since the client then confuses concept and product.

Our experience shows that Latinos quickly realize that the exchange is not balanced — my time for the opportunity for you to sell to me? Then, the instruction comes to an abrupt halt. Financial instruction is better accepted when free from conflicts of interest. 

3. The critique on affluent Hispanics needs context. Lack of conversation on financial issues is not caused by a lack of desire or focus, but by the fact that capital market development in Latin America lags about 80 to 100 years with respect to the United States. This lag translates into topics for dinner conversations of two to three generations.

History would help clarify this point. The Dow Jones Industrial Average traces its origins to 1885 and by 1928 it was composed of 30 companies. In contrast, the IPyC of the Mexican stock exchange was introduced in 1965 and by 1986 it had 25 constituents. Based on this milestone, stock markets in Latin America lag behind the United States by 80 to 100 years.

When comparing the experience of American families to Hispanic families on this topic, it may lead one to the erroneous belief that Latinos, even the affluent, don’t care as much about finances. It simply is not the case. They do care. One problem is that they don’t know much about it. 

This is not a question concerning preference regarding the choice of a topic for dinner table conversation. Rather, it reflects on historical stages of development. 

Preparing Hispanics for retirement in the United States needs to consider not only their culture but the context and contrasts to U.S. culture, and should continue recognizing that Hispanic families are richer for the caring between generations.