Hispanic-American Investment up in Real Estate, Bank Deposits, Merrill Lynch and Cap...

Hispanic-American Investment up in Real Estate, Bank Deposits, Merrill Lynch and Cap Gemini Ernst & Young World Wealth Report Shows


NEW YORK, NY–(HISPANIC PR WIRE – BUSINESS WIRE)–June 18, 2003–Almost half of wealthy Hispanic-Americans increased their investments in real estate (42%)and added to their cash holdings (43%) last year, according to the2003 World Wealth Report just published by Cap Gemini Ernst & Young and Merrill Lynch.

The benchmark report also found almost a third of high net worth Hispanic-Americans increased their holdings in stocks and mutual funds despite volatile markets.

High net worth individuals (HNWIs) are people with financial assets of over US$1million, excluding real estate.

“For wealthy Hispanic-American investors, growing wealth and saving for retirement and their family are key financial goals,” said James Gorman, president of Merrill Lynch’s Global Private Client group.

“However, only a third (33%) of Hispanic-American high net worth individuals have a financial plan, and 41% do not have an estate plan,” said Mr. Gorman. “However, two thirds (67%) do use a financial advisor, according to the World Wealth Report.”

In referencing the World Wealth Report, James Greene, vice president at Cap Gemini Ernst & Young and head of its North American financial services practice, said: “We found the likelihood for all high net worth individuals around the world to make an investment related decision without consulting professionals declined to 45% of those surveyed in 2002 from 55% in 2000.

“However, the change in demand for increased guidance was not indicative of a return to the pre-1990s ‘manage it for me’ approach. Rather, HNWIs now look for advisors who take a collaborative counsel approach characterized by transparency, reliability, and high service levels. HNWIs without a financial plan were, in general, more dissatisfied with services they received, and demonstrated disloyalty through a higher tendency to switch providers.

Mr. Greene added: “As wealthy Hispanic-Americans’ financial needs grow in complexity they expect their providers to comprehensively address a wide spectrum of wealth management services. They are increasingly looking for providers who offer comprehensive financial planning and advice across financial products.

“Our research indicates that in general up to 85% of HNWI investors demand comprehensive financial planning and advisory capabilities from their providers, a significant increase from previous years,” he said today.

A separate Hispanic Affluent Study, undertaken in April-May 2003 by Ipsos and Merrill Lynch, found the financial priority of 89% of Hispanic-Americans was preserving the value of their capital, compared to 97% reported for the general population. Some 85% also mentioned growing wealth as a key financial priority.

Mario Paredes, director of Hispanic business at Merrill Lynch’s multicultural and diversified business development group, said this Merrill Lynch IPSOS study also found: “The financial areas in which Hispanic-American investors report the highest level of knowledge are retirement planning (53%), stocks and bonds (47%) and asset allocation (42%). The areas in which Hispanic-American investors believe they are least knowledgeable are hedge funds (67% not knowledgeable), structured products (60%), and managed future funds (49%).

“Just over a third (36%) of affluent Hispanic-Americans say personal savings and investments will be their primary source of retirement income,” said Mr. Paredes. World Wealth Rises

More broadly, the World Wealth Report noted the number of high net worth individuals worldwide grew 2.1%, just under 200,000 individuals, to 7.3 million people last year. Their combined wealth rose approximately 3.6% to US$27.2 trillion (25.9 trillion euros), despite drops in most of the world’s equity markets, as they diversified their asset allocation.

HNWI Growth by Region

Region Assets/wealth # of people

Asia 10.7% 4.9%

Middle East 4.6% 4.7%

Europe 4.0% 3.9%

Latin America 2.7% – 3.6%

North America – 2.1% – 1.9%


Merrill Lynch, Cap Gemini Ernst & Young World Wealth Report 2003

The Cap Gemini Ernst & Young Group is one of the world’s largest providers of Consulting, Technology and Outsourcing services. The company helps businesses implement growth strategies and leverage technology. Early 2003, the organization employed approximately 53,000 people world wide and reported 2002 global revenues of 7.047 billion euros. More information about individual service lines, offices and research is available at http://www.cgey.com

Merrill Lynch’s Global Private Client group is one of the world’s pre-eminent private wealth management and advisory services. Its financial consultants combine world-class global resources with local expertise and experience to add value to their clients’ wealth management. This individual approach provides clients with personalized financial strategies, innovative products and exceptional client service. Merrill Lynch (NYSE: MER) is one of the world’s leading financial management and advisory companies with offices in 36 countries and private client assets of approximately $1.1 trillion. As an investment bank, it is a leading global underwriter of debt and equity securities and strategic advisor to corporations, governments, institutions, and individuals worldwide. Through Merrill Lynch Investment Managers, the company is one of the world’s largest managers of financial assets. For more information on Merrill Lynch, please visit http://www.ml.com.



Merrill Lynch

Guy McKanna, +1 212/449-3987 or 917/859-3558

Hispanic-American Investment up in Real Estate, Bank Deposits, Merrill Lynch and Cap Gemini Ernst & Young World Wealth Report Shows