Hispanic business owners: We need more financial guidance.

Running their business and nearer term goals inhibit time to plan.
Top concerns revolve around family’s long term financial needs.

 

NEW YORK, May 4, 2016—Hispanic small business owners report a desire to be engaged in financial planning with the help of a professional financial representative. A survey of small to medium size business owners of Hispanic background, reveals that 81% think it is important to consult a financial professional, yet less than half (42%) have an established relationship with an agent.

Hispanic business owners who are sole or partial owners of a small or medium company that had two or more employees, were surveyed to better understand the financial needs and preparedness of Hispanic business owners nationwide. The survey was sponsored by New York Life.

“It isn’t surprising that business owners feel that they have little time to focus on financial planning, but what is revealing is that over 81% know it is important and have yet to sit down with a professional to plan for the future” said Hector Vilchis, Corporate Vice President at New York Life. “Hispanic businesses are growing at more than 15 times the rate of all US firms (U.S. Hispanic Chamber of Commerce) and they contribute over $600 billion in revenue to the US economy, so it is imperative that they have the solid footing that proper planning can provide.”


The State of Financial Preparedness


In addition, the survey revealed:


  • Top financial concerns among business owners were not being able to afford children’s college expenses (61%); becoming a burden to my family later in life (43%) and have enough income in retirement (26%);
  • The value of financial planning is understood by these business owners with 81% recognizing that it is important to plan for retirement; 81% think it is important to consult a financial representative and 38 % want to leave a legacy for their family’s future;
  • More than half of Hispanic small business owners (60 %) have not been approached by a financial representative; and
  • As a result, 40 % lack life insurance coverage, any type of estate planning and almost 30 % have no retirement plan.

“What stands out for me is that more than half of small business owners haven’t been approached by a financial professional—that tells me that we as financial professionals have an opportunity and responsibility to educate and engage the Hispanic business community for their financial wellbeing. Even further, as the number of Hispanic business owners becomes more numerous and their businesses prosper, New York Life will be there to support the growing financial needs. New York Life is expanding our agent force that serves the Hispanic clients to meet the current and future financial needs of families and small businesses,” added Hector.


The Future—Personal Not Robo Advisor


Small business owners also report that financial planning can give them the peace of mind they want and prevent them from becoming a burden to their families in the future, which they want to avoid. In addition, almost 70 % report that family members would operate their business if something happened to them today, yet only a quarter have a business succession plan. When these business owners seek out financial advice they turn to professionals (88 %) and personal contacts e.g. friends, family and other business owners (63 %) more than online (57 %).

“New York Life agents are proud to serve small businesses in communities around the country and we hope these insights encourage small business owners to take the important step to plan and encourage agents and financial representatives to connect to local businesses in their neighborhood and provide the guidance these owners seek and value,” added Hector.


Methodology

This survey was conducted by Geoscape in 2015. A national sample of 151 Hispanic business owners who were the sole or partial owner of a company that had two or more employees, with an estimated margin of error of +/- 8.0 % points.

New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States* and one of the largest life insurers in the world. New York Life has the highest possible financial strength ratings currently awarded to any life insurer from all four of the major credit rating agencies: A.M. Best (A++), Fitch (AAA), Moody’s InvestorsService (Aaa), Standard & Poor’s (AA+).** Headquartered in New York City, New York Life’s family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life Investments*** provides institutional asset management. Other New York Life affiliates provide an array of securities products and services, as well as retail mutual funds.Please visit New York Life’s website at www.newyorklife.com for more information.

 

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Further Reading
  • Based on revenue as reported by “Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual),” Fortune magazine, 6/16/14. For methodology, please see http://fortune.com/fortune500/.
  • Individual independent rating agency commentary as of 8/13/14.
  • New York Life Investments is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC.