On a mission to motivate Latinos to save and prosper

Louis Barajas grew up in Boyle Heights in East Los Angeles, a neighborhood once known as a “murder capital,” where his father started a business in 1971. Since he spoke limited English, he asked Louis, then 13, to help him file his taxes, and together they bought a book on tax preparation. Two years later, his father was audited and Louis acted as translator. The puzzled auditors asked the 15-year-old how he had understood concepts like depreciation, to which he replied that he had read the instructions and figured it out.

“That day I made a commitment to my father that I’d learn about business and finance to protect my family,” he recalls.

Upon graduating from UCLA, Mr. Barajas began working for a financial planning firm as he prepared for Claremont Graduate School. After earning his MBA, he worked on financial plans for the CPA consulting firm Kenneth Leventhal & Co., which specialized in wealthy, high-profile clients. This story is part of an ongoing initiative by InvestmentNews to provide inspiration, education and awareness around workplace diversity and inclusion. The project aims to cultivate a financial advice profession where diverse perspectives and experiences are welcomed and respected, and where industry best practices can be shared across organizations.

A turning point came in 1990. Amid family upheavals, including the unexpected death of Mr. Barajas’s beloved grandmother and the birth of his first daughter, he decided to start his own firm, which would be dedicated to helping Latinos.

Mr. Barajas, a self-described “pragmatic idealist,” embraced the struggle. Back in East LA, he furnished his new offices with auctioned equipment from failing savings and loan institutions. When he had trouble finding financial planning clients, his father suggested he offer tax return preparation, which would enable him to steer clients toward planning.

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Mr. Barajas resolved to motivate Latinos and encourage them to save, “just a little,” and inspire them with accounts of people who had made it out of barrios. His first book, The Latino Journey to Financial Greatness, published in 2003, identifies some cultural barriers obstructing them. That book and four others he wrote subsequently performed well, leading to appearances on CBS and CNN and a weekly column for the business section of La Opinion, the largest Spanish-language newspaper in the U.S.

When Mr. Barajas was starting his firm, Hispanics constituted the largest unbanked minority.

“I want to help people who don’t have access,” he explained. “They want better lives for their kids but don’t know where to get help.”

The median wealth for white households in the U.S. is 18 times that of Latino households, according to the Center for Global Policy Solutions. Latino families also save less and are more likely to accumulate debt.

Some are misinformed and have made bad choices, like failing to start retirement plans. Some eschew life insurance for fear a new husband might usurp their widow’s policy proceeds. Meanwhile those financial planners who do work in the community tend to be real estate agents, with less experience in financial markets and investments.

Mr. Barajas still tries to “stand up for people” in honor of his father, who was once rejected for a home loan by many banks. “But I don’t believe in ‘pro bono,’” he insisted, “though it has its place in emergencies.” That said, he uses a generous sliding fee scale, even allowing some clients to pay with food.

Yet his firm, Wealth Management LAB, as a Latino-owned firm, also serves Latino international celebrities. The entire nine-person team is Hispanic, including two financial planners. The fee-only business charges annual retainers or hourly rates, with no minimums, and has about $40 million in assets under management.

Mr. Barajas believes the Latino community is constrained by its mindset and cultural beliefs, which are even more of an impediment than financial illiteracy. Still, he supports education, teaching as an adjunct professor at East Los Angeles College.

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“I myself made it out of the barrio because my uncle bought me books,” he said. That uncle, a meat cutter, loved reading so much that he always bought two books — for himself and his nephew.

Ross Levin, CEO and founder of Accredited Investors Wealth Management in Minneapolis, has observed Mr. Barajas’ intellectual curiosity and is impressed by his persistence as a “constant seeker.”

During the decade they have known one another, he has noticed that “Louis is as interested in the questions as in the answers.” Mr. Levin describes why that trait matters: “Clients may have similar situations, but advice can vary dramatically from a boilerplate approach.”

He adds his respect for Mr. Barajas’ commitment to the Latino community, and his determination to create a skill set for the underserved: “He has truly built his business doing well by doing good.”