Hispanic Finances and Financial Services - US - March 2009

SCOPE AND THEMES
What you need to know
Definition
Sources
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Understanding the consumer
Demographics
Acculturation
The Hispanic consumer
Financial position is strong and growing
Unease in today’s economy is leading to cut-backs in spending
Hispanics with lower levels of acculturation overspend in certain categories
Remittances to Latin America remain an essential part of the Hispanic budget
Hispanics and money
Careful with money, untrusting of banks
A significant portion of the Hispanic population is underbanked
Frequent debit card use suggests desire for banking services
Aspirations to save, difficult realities
Home loans non-existent or source of concern
Undocumented Hispanics lack access to credit
Hispanic finances and financial services
A lack of knowledge and an element of interest
The majority of Hispanics do not own any type of investment
Hispanics prefer to make financial decisions on their own
A variety of insurance and a variety of behaviors
Retirement savings falls short
INSIGHTS AND OPPORTUNITIES
Banking the unbanked
Gaining trust and credibility
Products and services that fit
Education, risk and retirement
INSPIRE INSIGHTS
 TREND: MY FINANCIAL SERVICE
What’s it about?
 TREND: THE END OF EASY CREDIT
What’s it about?
Assessing risk
Personal risk
The new normal
U.S. HISPANIC POPULATION
 DEMOGRAPHIC DATA
U.S. Hispanic population
U.S. population by race/Hispanic origin
Figure 1: Population by race/Hispanic origin, 1970-2020
Figure 2: Asian/Pacific Islander, Black, and Hispanic populations, 1940-2020
Figure 3: Population, by race and Hispanic origin, 2003-13
Age
The Hispanic and non-Hispanic population by age
Figure 4: Hispanic population, by age, 2003-13
Figure 5: Total U.S. population, by age, 2003-13
Generations
Hispanics by generation
Figure 6: Generations, by Hispanic origin, 2008
The Hispanic household
Figure 7: Average household size, by Hispanic origin/race of householder, 2001 and 2006
Figure 8: Households, by number of persons in the household—Hispanics vs. non-Hispanics 2006
Figure 9: Households, by presence of children and Hispanic origin, 2006
Hispanic fertility rate
Figure 10: Fertility rate, by race and Hispanic origin of mother, 1996-2006
Country of origin/heritage
Figure 11: Hispanic population, by country of origin/heritage, 2007
Figure 12: Graph: Hispanics, by country of origin/heritage, 2007
 GEOGRAPHIC LOCATION
Hispanics by geographic concentration
Figure 13: Graph: Hispanic population, by region and by country of origin/heritage, 2007
Figure 14: Hispanic population, by region and by country of origin/heritage, 2007
States with greatest Hispanic population growth
Figure 15: Hispanic population greatest percentage increase, 2001-06
Key Hispanic metropolitan areas
Figure 16: Metropolitan areas with the largest number of Hispanic residents, by country of origin, 2006
ACCULTURATION
What is acculturation?
Why is level of acculturation important?
Unacculturated/Enculturated
Acculturated/Bicultural
Assimilated
Figure 17: Hispanics, by acculturation and assimilation level, 1998-2008
What is retro-acculturation?
Retro-acculturation
THE HISPANIC CONSUMER
 HISPANIC PURCHASING POWER
Hispanic purchasing power on the upswing
Figure 18: Purchasing power, by race/Hispanic origin, 2007
 HISPANIC INCOME
But Hispanics lag in U.S. household income distribution
Figure 19: Median household income, by race and Hispanic origin of householder, 2007
Figure 20: Household income distribution, by race and Hispanic origin of householder, 2007
Hispanic household earners
Figure 21: Number of household earners, by income level, December 2008
Income earners by language preference at home
Figure 22: Number of household earners, by language preference, December 2008
Hispanic income levels concentrated in key states
Figure 23: Largest Hispanic markets, by Hispanic disposable income, 2005
 HISPANICS AND THE ECONOMY
Hispanics in today’s economy
Figure 24: Hispanics now looking for deals/sales more than they did a year ago, by household income, December 2008
Figure 25: Hispanic attitudes towards personal finances, by household income, December 2008
Hispanics’ economic outlook
Figure 26: Hispanics who describe the U.S. as a land of opportunity, by household income, December 2008
Remittances to Latin America
Providing for the family
Figure 27: Hispanic attitudes towards personal finances, by language preference, December 2008
Younger Hispanics send more
Figure 28: Hispanic attitudes towards personal finances, by age group, December 2008
Decrease in remittances
Remittances and banks
Figure 29: Western Union television ad, “We Are With You”, February 2008
 HISPANICS’ CATEGORY EXPENDITURES
Figure 30: Expenditures by category, by Hispanic origin of consumer unit reference person, 2007
Household grocery spending
Spending by race/Hispanic origin
Figure 31: Average spent on groceries per week by race/Hispanic origin, July 2007-September 2008
Spending by household income
Figure 32: Household grocery expenditure by income level, Hispanic vs. non-Hispanic, July 2007-September 2008
Hispanic spending by language preference
Figure 33: Hispanic average spent on groceries, by language preference when reading, July 2007-September 2008
HISPANICS AND MONEY
 ATTITUDES TOWARDS MONEY
By race/Hispanic origin
Figure 34: Attitudes towards money, by race/Hispanic origin, July 2007-September 2008
Hispanics by income level
Figure 35: Hispanics’ attitudes towards banking by household income level, July 2007-September 2008
Hispanics by place of birth
Figure 36: Hispanic attitudes towards banking, by place of birth, July 2007-September 2008
 BANKING
Banking and investment use by race/Hispanic origin
Figure 37: Banking and investment services preferred by Hispanics and non-Hispanics, July 2007-September2008
Hispanics by income level
Figure 38: Banking services prefered by Hispanics and non-Hispanics, by income, July 2007-September 2008
Hispanics by place of birth
Figure 39: Hispanics’ banking behavior, by place of birth, July 2007-September 2008
Figure 40: Wachovia Bank television commercial, “ Way2save”, September 2008
 HISPANICS’ USAGE OF DEBIT CARDS
By race/Hispanic origin
Figure 41: ATM/debit card ownership, by race/Hispanic origin, July-September 2008
Figure 42: ATM/debit card usage frequency, by race/Hispanic origin, July 2007-September2008
Hispanics by level of acculturation
Figure 43: ATM/debit card ownership, by Hispanic language preference, July 2007-September 2008
 SAVINGS, THE NEW PRIORITY
Savings by race/Hispanic origin
Figure 44: Ownership of savings vehicles, by race/Hispanic origin, July 2007-September 2008
Saving habits of Hispanics by income
Figure 45: Currently saving money for variious items, by household income, December 2008
Saving habits of Hispanics by language preference
Figure 46: Currently saving money for the following items, by Hispanic language preference, December 2008
Savings habits of Hispanics by age
Figure 47: Currently saving money for the following items, by Hispanic language preference, December 2008
 LOANS AND THE HISPANIC CONSUMER
Loans by race/Hispanic origin
Figure 48: Loan ownership, by race/Hispanic origin, July 2007-September 2008
Loans by Hispanic household income
Figure 49: Hispanic loan ownership, by household income July 2007-September 2008
Loans by language preference when reading
Figure 50: Hispanic loan ownership, by language preference when reading, July 2007-September 2008
Figure 51: Wells Fargo Bank television ad, Mortgages, May 2008
 HISPANICS’ USAGE OF CREDIT CARDS
Figure 52: Consumer credit outstanding, percentage change, 2007
Credit card acquisition by race/Hispanic origin
Figure 53: Credit card ownership, by race/Hispanic origin, July 2007-September 2008
Hispanic credit card debt
Figure 54: Credit card payment behavior, by race/Hispanic origin, November 2008
Hispanic credit card debt by income level
Figure 55: Hispanic ownership of credit cards, by income level, July 2007-September 20008
Hispanic credit card debt by language spoken at home
Figure 56: Hispanic attitudes towards their credit card debt, by language preference, December 2008
Figure 57: Visa television ad, “Life takes Visa”, May 2008
HISPANIC FINANCES AND FINANCIAL SERVICES
 FINANCES AND FINANCIAL SERVICES
Hispanics’ attitudes towards finances and financial services
Investments by race/Hispanic origin
Figure 58: Attitudes towards finances, by race/Hispanic origin, July 2007-September 2008
Hispanics’ investment by language preference
Figure 59: Attitudes towards finances, by language preference in the home, July 2007-September 2008
Hispanics’ investments by income level
Figure 60: Attitudes towards finances, by race/Hispanic origin and income level, July 2007-September 2008
Investment products
Investments by race/Hispanic origin
Figure 61: Investment ownership, by race/Hispanic origin, July 2007-September 2008
Hispanics’ investments by income level
Figure 62: Investment ownership, by race/Hispanic origin and income level, July 2007-September 2008
Figure 63: Prudential retirement television ad, October 2008
Financial decisions
Financial services used by Hispanics, by income
Figure 64: Hispanic financial decisions, by income level, December 2008
Financial services used by Hispanics by educational attainment
Figure 65: Hispanic financial decisions, by education level, December 2008
 HISPANICS AND INSURANCE PRODUCTS
Health insurance
Health insurance by race/Hispanic origin
Figure 66: Ownership of health insurance, by race/Hispanic origign, July 2007-September 2008
Figure 67: Means of obtaining Health insurance by race/Hispanic origin, July 2007-September 2008
Hispanics’ health insurance by income
Figure 68: Ownership of health insurance, by race/Hispanic origign, July 2007-September 2008
Figure 69: Means of obtaining Health insurance, by race/Hispanic origin and income level, July 2007-September 2008
Life insurance
Life insurance by race/Hispanic origin
Figure 70: Ownership of life insurance, by race/Hispanic origin, July 2007-September 2008
Hispanic life insurance by income
Figure 71: Ownership of life insurance, by race/Hispanic origin and income level, July 2007-September 2008
Figure 72: Value of life insurance, by race/Hispanic origin and income level, July 2007-September 2008
Figure 73: Ownership of life insurance by language preference in the home, July 2007-September 2008
Automotive insurance
Automotive insurance by race/Hispanic origin
Figure 74: Ownership of auto insurance, by race/Hispanic origin, July 2007-September 2008
Figure 75: Value of auto insurance, by race/Hispanic origin, July 2007-September 2008
Hispanics’ automotive insurance by income
Figure 76: Value of auto insurance, by race/Hispanic origin and income level, July 2007-September 2008
Home insurance
Home insurance by race/Hispanic origin
Figure 77: Ownership of home insurance, by race/Hispanic origin, July 2007-September 2008
Hispanics’ home insurance by income
Figure 78: Value of home insurance by race/Hispanic origin and income level, July 2007-September 2008
 PLANNING FOR RETIREMENT
Retirement savings
Pensions by race/Hispanic origin
Figure 79: Ownership of 401(k) accounts, by race/Hispanic origin, July 2007-September 2008
Hispanics’ pension savings by income
Figure 80: Ownership of 401(k) accounts, by race/Hispanic origin and income level, July 2007-September 2008
Attitudes towards retirement planning
Pension by race/Hispanic origin
Figure 81: Attitudes towards retirement, by race/Hispanic origin and income level, July 2007-September 2008
CLUSTER ANALYSIS
Crunchers
Who they are
Opportunity
Buyers
Who they are
Opportunity
Retirees
Who they are
Opportunity
Cluster characteristics
Figure 82: Hispanics and budgeting clusters, January 2009
Figure 83: Level of credit card debt, by Hispanics and budgeting clusters, January 2009
Figure 84: Expenditure behavior on non-essentials, by Hispanics and budgeting clusters, January 2009
Figure 85: Seeking sales and deals, by Hispanics and budgeting clusters, January 2009
Figure 86: Attitudes towards finances, by Hispanics and budgeting clusters, January 2009
Figure 87: Reasons for savings, by Hispanics and budgeting clusters, January 2009
Cluster demographics
Figure 88: Hispanics and budgeting clusters, by gender, January 2009
Figure 89: Hispanics and budgeting clusters, by age group, January 2009
Figure 90: Hispanics and budgeting clusters, by income group, January 2009
Figure 91: Hispanics and budgeting clusters, by language dominance, January 2009
Figure 92: Hispanics and budgeting clusters, by place of birth, January 2009
Cluster methodology
APPENDIX: SIMMONS
Figure 93: Hispanics banking behavior, by language preference in home, July-September 2008
APPENDIX: OTHER USEFUL CONSUMER TABLES
Figure 94: Hispanics who describe the U.S. as a land of opportunity, by language preference, December 2008
Figure 95: Hispanics who describe the U.S. as a land of opportunity, by household income, December 2008
APPENDIX: TRADE ASSOCIATIONS