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Multicultural markets represent $3 trillion in buying power

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“Don’t wait for tomorrow or a year from now or 20 years from now,” said Mammen Verghis, Prudential. “If you’re waiting for the right time to enter the multicultural market, you’re missing the boat because the time to target the multicultural market is right now.” 

At NAILBA 34 on Friday, November 20, Verghis served as the moderator to panelists Michael Gomez, Highland Capital Brokerage; George Gore, Capitas Financial Midwest; and, Vincent Ip, East and Ocean Associates. Their topic, “Our Changing Society — Tap Into a World of Opportunities,” focused on the exponential growth of the multicultural markets.

African American, Latino and Asian American consumers offer a massive opportunity for advisors, according to the Prudential study, “A Total Market Approach: Winning with Women and Multicultural Consumers.” A copy of the study was available to attendees and the numbers are staggering.

“Multicultural markets represent an audience with $3 trillion in buying power. A figure projected to grow to $4 trillion by 2017,” according to the study.

Those numbers will continue to explode due to the massive population gains being made by multicultural markets. According to the U.S. Census, “These diverse segments accounted for over 90 percent of all population growth in the U.S. from 2000 to 2010.” These consumers account for 36 percent of today’s population and will be the majority by 2050.

With so much opportunity, inroads, as Verghis stated, need to be made now by retirement advisors. 

Gomez said the Latino communities are extremely loyal. “If you start working with one Latino generation, the chances are you’ll be working with them for a long, long time.”

Gomez added that many of the first generation Latinos don’t talk with advisors. For many, there’s a language barrier. For others, there’s the fear that they’re giving up a certain amount of control of their money. But there’s a huge opportunity if advisors can break down those barriers and talk about something that matters to those prospective clients.

“Family is so important to them,” Gomez said. “There’s a huge opportunity to educate the first generation Latinos about passing wealth onto their children. The children are the ones who are getting U.S. educations. They’re the ones getting professional jobs. They’ll be the ones inheriting money from their parents.”

Ip said the key to making inroads with the Asian American market is through face-to-face communication. “They’re not going to answer voice mails or emails or fliers. They want to see a real person, someone who gets to know them and asks about them and their family, not just someone who shows up to sell a product.” 

With all the opportunities in these emerging markets, what’s an advisor to do? Gore said you have to get out in those communities and meet the leaders there, perhaps join a local organization or leadership group to better understand the people’s needs.

Gomez summed up the market in a succinct way. “Don’t judge a book by it’s cover. I’m from Chicago. Many of you may have heard of 26th Street. It’s made up completely of Mexican-American businesses. Guess what? It had more tax revenue last year than the upscale Miracle Mile.”

An audience member raised a hand after Gomez said that and asked how Gomez dressed when he met with these Latino clients. Gomez looked down at his sharp suit and crisp white shirt before answering the question: 

“I’m not going to look like this. They don’t want the guy in the suit. They want the guy who can sit across the table from them and feel comfortable. Jeans and a golf shirt is just fine.”