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This article originally appeared on DiversityInc.com on December 16, 2005.

Arming Latinos with excessive information on financial literacy is doing very little to create real change in bettering their lives.

The National Council of La Raza (NCLR) revealed a report Thursday noting that Latinos are not benefiting from recent policy efforts to improve financial know-how and wealth-building skills. The study, "Financial Counseling: A Meaningful Strategy For Building Wealth In The Latino Community," pushes for a wake-up call to policymakers and community leaders. The solution lies not in excessive information, but one-on-one financial counseling to better educate the country's largest minority population.

"There is no indication [Latinos] are changing their behavior or [information] is reaching the people intended to reach," Beatriz Ibarra, author of the report and NCLR Assets Policy Analyst, said in a telephone press conference Thursday. "We concluded ... that counseling is really the key strategy."

The good news is that policymakers understand the importance of financial literacy as a whole. This most recently has been demonstrated by President Bush's introduction of an initiative in May to specifically improve financial literacy for Latinos. Congress also designated April as Financial Literacy Month. But these mostly symbolic gestures have failed to generate real results for Latinos; 14.5 million Latinos don't even have basic checking accounts, according to NCLR.

The need for financial literacy extends to Latinos of all education levels and longevity in the United States, but it is especially important for low-income Latino families. At issue is the ability of low-income Latinos to access the help of financial counselors.

"The current structure of the market for financial advice ensures that only those who

can afford it may access good-quality information and counseling," the report reads. "Because Latinos tend both to be asset-poor and to have lower comparative incomes, many are barred from accessing the best financial advice that the market can provide." 

Louis Barajas, president and founder of Wealth & Business Planning, noted that less than 2 percent of all financial planners in the United States are Latino. Obstacles include the reluctance of financial firms to provide services in low-income markets, he said. Trust is an issue with immigrants who have experienced corrupt financial practices in their home countries. Barajas stressed that financial literacy crosses all generational lines. 

"These issues we are raising are not issues that disappear as people become more assimilated and integrated into the economy and work force," Barajas said.

Ian Bautista, president and CEO of El Centro, said half of the Latino immigrants his agency surveyed in 2002 don't have bank accounts. El Centro is an NCLR affiliate and offers one-on-one financial counseling to Latinos in Kansas City. He hopes the report spurs real efforts that go beyond the anecdotal success stories he has witnessed.

The report documents a shocking disparity in wealth between Latino and white families. Studies show the median net worth of Latino households in 2002 was $7,932 compared to $88,651 for white households, according to the study. Citing a Pew Hispanic Center survey, the study stated that more than 35 percent of Latinos did not have a banks account, as well as 42 percent of foreign-born Latinos. This harsh reality often places Latinos at higher risk of predatory lenders and high interest loans. 

The report lists the major challenges and recommendations for the financial well-being of Latinos:

Challenges:

Lack of affordable, certified financial counselors in the marketplace
Lack of explicit economic incentives for low-income families to connect with financial advisers and counselors
Lack of federal resources for targeted, community-based, one-on-one financial-counseling programs

Recommendations:

Creating new incentives for low-income families. One way is for Congress to create a refundable federal income-tax credit for low-income families that covers the cost of one-on-one financial counseling services
Creating an infrastructure of community-based financial counselors by authorizing a program through the U.S. Department Health and Human Services to work with local community organizations on financial-counseling services
Increasing funds for low-income tax-preparation sites to support a financial-counseling component.

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