“Hispanics are missing out on one of the greatest things in the world — the ability to retire with savings,” says Salomon Smith Barney financial consultant Al Martinez. “Not being able to retire is very sad.”

It is a lesson learned from family experience. Martinez's father, Daniel, who emigrated from Colombia with few assets and a high school diploma, built up a successful grocery store business in Brooklyn. However, he didn't set aside enough of his newfound wealth to ensure a comfortable retirement.

Now, Al Martinez uses his father's example in talking to potential Hispanic clients. This is not easy work. Martinez estimates that it takes him two to three times as long to woo Hispanic clients as non-Hispanics. “It's a long process,” he says.

Without someone like Martinez to pull them in, many Hispanics simply opt out of financial services. They are statistically less likely to have a credit card, checking account or life insurance than African-Americans, Asians or non-Hispanic whites.

In a 2000 study, Strategy Research found that just 48 percent of Hispanic households had at least one credit card, compared with 53 percent of African-American households and 69 percent of non-Hispanic whites. The same study showed that some 58 percent of Hispanics have health and/or life insurance, compared with 85 percent of African-Americans and 88 percent of non-Hispanic whites.

Culture Clash

Income doesn't appear to explain away the group's aversion to financial products. Cultural traditions and political experiences may play a role.

A recent survey by the Employee Benefit Research Institute in Washington found that Hispanics are almost twice as likely as Asians to hold some of their savings in cash — either in a safe-deposit box or stashed somewhere in their homes.

New York-based Martinez says pitching to Hispanics is difficult for a number of reasons. First, he says, “Many are small business owners and don't think that they will ever retire.” Second, he believes that first-generation immigrants are, by custom and circumstance, not savers. “They left their country with nothing and now they are in acquisition mode — they are spending their money on goods, cars and houses,” Martinez says. Finally, because the road to wealth for many Hispanic immigrants is small business ownership, available cash is most likely reinvested in the family business rather than in stocks and bonds.

Carlos Santiago, a partner at Santiago & Valdez Solutions, a San Francisco-based marketing firm, sees cultural differences playing a role in investment philosophies. For example, “Asian immigrants save,” he says. “Hispanics tend to concentrate on today.”

That's not surprising when you consider what happened in their Latin-American homelands. Rampant inflation, constant currency devaluations and periodic economic chaos stifled an investment culture. “Their experiences have created a wariness of saving and a mistrust of financial institutions,” Santiago says.

U.S. financial institutions have done little to overcome this mistrust. “Hispanics make up a huge market that no one is servicing,” says Wilfredo Gonzalez, a financial advisor at the MONY Group in New York. “These are people who are interested, but don't know who to call.”

Gonzalez has seen examples of that wariness first hand. One prospect, a grocery store entrepreneur from the Dominican Republic with a net worth of more than $5 million, had never invested in a mutual fund or life insurance. Gonzalez won him over, but not until he earned the man's trust by meeting with him at least seven times.

Help Wanted

Frank Terzuoli of Mercer Management Consulting says most financial services companies balk at the costs of a Hispanic marketing campaign. “Frankly, most financial institutions have just dabbled in this market — perhaps printing up a few pamphlets.”

Terzuoli says the long education curve of prospective clients and the need to be flexible with credit requirements when offering services to individuals without a credit history are just a few of the roadblocks that have kept most financial firms from embarking on a thorough Hispanic marketing effort. Also, he says, it is difficult to find the right pitchmen. “It is not just a matter of finding people with a Hispanic surname,” he says. They must have college educations and extensive experience.

That's where Martinez comes in.

Since joining Smith Barney from Merrill Lynch last April, Martinez has helped organize the firm's Hispanic marketing initiative. The three-year-old program encourages financial consultants to reach out to Hispanics, not only by supplying Spanish-language marketing materials and holding public seminars, but also by offering in-house workshops and other marketing tools.

“Al is a great example of someone who has taken advantage of these resources and has also become someone that we can go to for ideas,” says Aubrey Hurse, first vice president, target marketing at Smith Barney.

Hurse says the firm was spurred in part by the rapid growth of affluent Hispanics. The number of Hispanics who earn $100,000 a year or more and have at least $500,000 in assets is growing eight times as fast as than the general affluent market.

Martinez says the key to his success is building a diverse client base. In order to earn a steady income, Martinez says he depends on non-Hispanics to make up the bulk of his clients.

Over time, he expects this will change. Even now, while only 25 percent of his clients are Hispanic, they provide him with about 35 percent of his business. Hispanics, he notes, are not the wealthiest of his clients, just more loyal.

Maria Lagos is just such a customer. Before meeting Martinez 10 years ago, she and her husband didn't use a broker and kept all their assets in fixed-income investments. Martinez helped them diversify their portfolio, and he continues to make recommendations. “But what's most important is that he listens,” says Lagos. “He is always willing to answer questions. Even if he is out of the office, it never takes him more than half an hour to return our phone call.” In return for his attentive service, she and her husband have followed him twice as he moved to different firms. They opened checking and credit card accounts through Martinez, and even referred a friend.

Building on a base of clients like Lagos, Martinez says he expects that eventually half of his business will come from Hispanics.

“I have my frustrations, and my doubts. But I'm committed to this market,” Martinez says.