In the early 1990s, when James Perez-Foster, managing partner at Bainbridge Advisors in Boulder, Colorado, was working in asset management at Merrill Lynch in New York, he became aware of the enormous potential of the Hispanic market in the greater New York City area.
“I was not only captivated by the economic viability of both Hispanic and women-owned businesses and the sophisticated capital needs they had, but also by how little emphasis was being placed by financial firms to understand those markets, the businesses and their owners,” he says. “I knew very early on that the financial services industry was making a terrible mistake by either ignoring the Hispanic community or, for those firms that were approaching it, viewing it as a monolithic block.”
As it were, Perez-Foster didn’t get a whole lot of encouragement from management to cultivate a Hispanic clientele, but he pushed ahead, and within a few years, after moving to (at the time) Smith Barney, he was managing $100 million in investment assets for both Hispanic and women-owned businesses that spanned the gamut from mom-and-pop stores to television and movie companies, and their owners.
“Basically, the owners of all these businesses had the same goal: to retire with dignity,” he says. “Some of them were sitting on millions of dollars and couldn’t believe that someone from a Wall Street firm wanted to deal with them.”
His efforts at working with the finances of these businesses and those of their owners inspired Perez-Foster to create a full-service bank dedicated wholly to the Hispanic community. He left New York City shortly after 9/11 to settle in Denver, and some years thereafter, set up Solera National Bank, where he remains the chairman emeritus. Solera is dedicated to providing financial services to Colorado’s growing population of Hispanic and minority-owned businesses.
While the financial advisory business has made great strides in both its understanding of and approach to the Hispanic population, Perez-Foster nevertheless believes that advisors, both RIAs and others, should pay greater attention to the financial needs of both Hispanic and minority-owned small businesses. “RIA’s are sitting on the precipice of an enormous wave of minority-owned, small to mid-sized businesses with upwards of $75 billion in annual capital demands to fuel and scale business growth, and the U.S. Hispanic and women-owned small businesses are the fastest growing small business segments in the U.S. economy,” he says.
For the most part, Hispanic business owners — just like any household, Hispanic or otherwise with at least $100,000 in income — have two key goals: “Retiring with financial dignity and affording to send their children to college,” Perez-Foster says.
And because the growth of the Hispanic market is, in his view, “the most meaningful demographic shift in the history of the economy since the Baby Boomer generation, with an estimated $1.3 trillion in annual household purchasing power,” it makes sense, he says, for financial advisors to access this market by “bridging the trust gap through a culturally relevant education and product and/or service orientation.”
In this way, advisors will be able to strike up and foster long-term relationships that will result in faster referrals from family members and other business owners, and those strong ties will in turn help to facilitate multi-generational access to future business, which is very important for small business owners.
Perez-Foster also believes that financial advisors should network within the centers that serve as hubs for minority-owned businesses, such as Manos Accelerator, a San Jose, California-based incubator of Hispanic-owned small businesses and Latino-focused professional networking organizations like Primer Network in New York City, a growing body of select, experienced business leaders.
Perez-Foster serves as a consultant to both private and public sector firms looking to refocus their business lines in a meaningful manner in order to capture the upside of new markets and changing demographics. Currently, he’s been working with the U.S. Postal Service, which is exploring the feasibility of a postal financial system in largely rural areas of the country that are currently underbanked or not banked at all, but where people still require banking and other financial services.