Financial advisors sometimes puzzle over how to effectively reach and serve black and Hispanic clients. A Vanguard study released recently suggests they can start by drilling home a simple message: emergency savings accounts are a must.

Blacks were almost twice as likely to take a hardship withdrawal from their 401(k) accounts as whites, and Hispanics were about one third as likely to do so, according to a Vanguard study released this week.

But the planning opportunity lies in a deeper look at the findings. When blacks savers dipped into those 401(k) accounts, they withdrew around 3.5 percentage points less of their account balances than whites and Hispanics. Taken by themselves, Hispanics withdrew a similar fraction of their account balances as whites.

Smart advisors who are tapped into the thinking of minority clients—or any group who might share similar income characteristics—can spot the planning opportunity right away.

“For these groups, this is the largest single source of money they have accumulated,” said Dywane Hall, a registered principal and branch manager for LPL Financial in Alexandria, Va. “They do not have the outside savings sources that say Caucasians may have.”

Some black and Hispanic clients do not perceive of their 401(k) plans as income replacement mechanisms for retirement, like they should, Hall says. Instead, they see them as regular bank accounts. Sometimes clients even consider using the money to help send children to college, Hall said.

“The retirement plan sponsors have to do a better job of educating them on how tapping that money affects their ability to retire at levels of dignity,” he said. “Let’s take a look at it from a holistic standpoint.”

Holistically speaking, many compelling reasons exist for planners to dissuade blacks and Hispanics from tapping into their 401(k) accounts before retirement. First, the IRS, considers 401(k) withdrawals to be accretive to income, under certain circumstances. That means an income tax bill follows, Hall said.

Processing fees, such as the check-cutting fees asset custodians charge on withdrawals, are another major consideration, said Lee DeLorenzo, CFP, president of United Asset Strategies, a planning firm based in Garden City, N.Y.

DeLorenzo advises on a plan comprised of a couple hundred participants, many of whom are of Caribbean and Hispanic descent. She observes higher hardship withdrawal rates among lower-paid plan participants across all ethnic and racial groups. If a client took a $1,000 withdrawal, and absorbed a custodial check-cutting fee of $60, that saver is already getting charged a 6% fee on that transaction.

“You say, ‘well, that’s criminal,’” DeLorenzo said.

Also frustrating, from a planning perspective, is that sometimes those lower-earning plan participants cannot afford to contribute enough money to their 401(k) accounts to qualify for the full match, plus sock away money in a separate rainy-day account, DeLorenzo said.

Yet the Vanguard study controlled for gender, education and levels of wealth and found similar hardship withdrawal rates along racial and ethnic lines, said Cyndy Pagliaro, a senior research analyst with Vanguard's Center for Retirement Research. Also, Asian plan participants were excluded from the hardship withdrawal analysis, because they took so few draw downs that the sample size was not meaningful.

From Vanguard’s perspective, the solution is simple: Encourage a stronger culture of emergency savings among all clients.

“When you look at the impact on their retirement plan savings, blacks and Hispanics are not withdrawing anymore than anyone else,” Pagliaro said. “Advisors can work with them to set up separate emergency accounts.”