Financial services consumption behavior across Hispanic American consumers

This study creates a generalized framework to explain Hispanic financial asset consumption behavior, and then develops and tests four research hypotheses derived from this framework. The findings demonstrate that Hispanic consumer choices of financial products generate investment portfolios that differ markedly from their non-Hispanic White (NHW) counterparts. In particular, Hispanic portfolios reflect a clear preference for near-term savings, favoring liquidity and low investment risk at the expense of higher yielding assets, and Hispanic investors demonstrate a strong affinity for insurance products, perhaps using these investments to fund intergenerational transfer of wealth over time. Less prevalent in Hispanic families' investment portfolios is significant investment in financial assets offering relatively high returns, such as common stock, mutual funds, brokerage accounts, and corporate bonds. This leads Hispanic households to exhibit investment balances that are significantly smaller than their NHW counterparts and accumulate wealth at a far slower pace over time.