Ever since moving from Hong Kong to New York nine years ago, K.Y. Au socked his money away in a savings account. "I had a language barrier," he said. "I didn't understand the literature. Besides, my father's generation only kept money under the pillowcase."

Now, just one Social Security check into his 66th year, Au is awakening to the stock market. What, after all, is a person to do when bull market millionaires are blossoming all around and Wall Street is knocking on the door?

Recently, walking near the Chinatown real estate office where he works, Au came across a new Merrill Lynch & Co. branch, touting its Chinese name, "Beautiful Forest." At home in New Jersey, he got a mailing in Chinese from Metropolitan Life Insurance. And, reading a Chinese-language newspaper the other day, he spotted an ad for a company called Trustworthy, Well Established Asset Management. In English, the firm's name is Charles Schwab & Co.

The messages were penetrating. "I'm going to open a mutual fund," Au says he decided.

Au represents the forefront of the emerging American investor. Once dominated by middle-aged white men, the stock market is increasingly of interest to a patchwork of immigrants, working women, African Americans and Latinos, stock-picking retirees and their Web-surfing grandchildren.

The changing face came to light this week in a study released by the Securities Industry Association and the Investment Company Institute. Nearly half of all American households have stock, the report by the trade groups representing financial services firms and mutual funds confirmed, as more and more Americans join employee-sponsored stock plans.

It's what is within that group--and what is not there yet--that is profoundly reshaping Wall Street. An increasingly diverse population and work force, changes in technology and untapped wealth in minority communities are radically changing the methods through which American stocks are sold--and the way giant financial institutions deliver their messages.

"Everybody's got different needs and ways of being reached," said Marta Von Loewenfeldt, a marketing manager at Schwab, which is at the forefront of this new "segmentation" strategy. Schwab has a range of separate initiatives aimed at Asians, Hispanics, African Americans and--soon--women.

On paper, the new study shows, the typical equity owner looks the same as in the 1950s. A 47-year-old married, working person with a college degree and a moderate income (now $60,000). Eighty percent are covered by employer-sponsored retirement plans, and 53 percent have individual retirement accounts.

But drill down, and stock owners are a scattered group with competing philosophies, approaches, backgrounds.

There are renegade do-it-yourselfers who have walked out of day jobs to sit at computers all day and trade in and out of stocks. There are masses buying stocks outside of plans sponsored by their employers--nearly 22 million U.S. households, or 21.4 percent.

There are conservative elderly people who employ the help of a broker to choose stocks and make trades (the report shows 67 percent still want advice). There are more women not only investing on their own but also influencing household decisions. (About 54 percent of households boasted joint-decisions.)

And there are immigrants seeking to dip in a toe, but are loathe to trust anybody with their hard-earned savings. "Until now, I've only trusted banks," said S.H. Lee, a Korean immigrant who recently retired from Samsung Co. Now, he plans to take a small portion of his savings and invest it in a mutual fund. "A friend's son was working on Wall Street and explained it to me," he said.

He is still a world away from the risk that someone 19 to 35 is willing to take. According to the new study, Generation Xers hold 80 percent of their assets in stocks, because they are so far from retirement they can afford to wait out the leaps and lurches of the markets. Nineteen percent of all U.S. stocks are now held by Gen-Xers, the study showed.

That is about twice the amount that the "Silent Generation" of investors aged 55 to 74 will risk. By comparison, baby boomers, who own about half the stock in America, put 57 percent of their assets into equities. Those older than 75--known as the GI generation--house 37 percent of their assets there.

All these disparate customers have forced Wall Street firms to split their marketing efforts into pieces and scatter to speak distinctly to each group.

"Financial services companies have become much more sophisticated in the art of segmentation," said Joan Miller, a senior vice president at State Street Corp., overseeing the Boston banking and financial services company's aggressive approach to capturing emerging investors. "As the population and the workplace become more diverse, it is something we are all thinking about. We can't look at investors holistically anymore."

The competition to grab each segment is fierce, particularly as brokerages struggle to keep up profits in a world where technology is making it cheaper and easier for people to trade without their advice.

Some 54 percent of current stockholders purchased their first shares before 1990, and 28 percent made their first purchase between 1990 and 1995, according to the study. Only 18 percent made their first investment after 1995.

But there is a new, vast, untapped market that Wall Street firms are scrambling to capture. Together, Hispanics, Blacks and Asians represent only 12 percent of stockholders.

"Their economic clout has been well documented," said Miller of State Street. "The ethnic force is going to be felt by industries across the spectrum. I think with the next census, in 2000, it is going to become more apparent than ever how we need to serve these groups better. And there is nowhere where opportunity is more ripe than in the financial services industry."

Which is why in May, State Street took the aggressive step of translating the prospectuses for several of its mutual funds into Chinese and Spanish. And it is also why you can flip through the monthly magazine Hispanic Business and see ads from a variety of firms, including GE Capital Corp. and Merrill Lynch, targeting a market that the survey shows still represents just 5 percent of investors.

Another vastly under-tapped segment is African American investors. They account for 12 percent of the population, but only 5 percent of investors, according to the survey.

"Generally, they haven't trusted the financial services field--they don't know anybody in it," said Von Loewenfeldt of Schwab. "Very few work in that field. They don't sit around the breakfast table talking about the market with their nephew who is a stockbroker."

So, Schwab set out a couple years ago to be that nephew at the breakfast table. "A group of African American workers approached management and said you're missing a great opportunity here," Loewenfeldt said. "They said African Americans are looking for an organization that can help them, demystify the markets and put them in control."

Schwab began doing surveys of black investors with Ariel Mutual Funds of Chicago. In March, it published a report identifying some of the differences in attitudes toward investing between whites and African Americans with similar incomes.

The study of about 800 whites and 800 blacks with annual incomes above $50,000 concluded that African Americans were "under-invested" because of various social and cultural obstacles. Historically partial to certificates of deposit, passbook savings accounts and real estate, blacks were also less likely to point to retirement as a number one goal for saving and investing.

African American investors were more likely than whites to say they will begin investing in the next year. It showed only 56 percent of blacks had money in stocks, vs. 71 percent of whites.

"Everyone in the industry looked closely at that study," said Deborah J. Frazier, an investment adviser at Merrill Lynch. "It was a wake-up call that this market was grossly under-served."

Now, throughout the country investment advisers are talking up the virtues of Wall Street to African Americans. In Detroit, for example, Gail Perry Mason, a vice president at First of Michigan, a banking firm, on Oct. 28 will bring a group of 100 black women who collectively own 100,000 shares of Sara Lee Corp. to the annual meeting.

"Women and minorities have been overlooked," she said. "As shareholders, we need to make our voices heard."

Frazier, an African American woman, began working with New York State Comptroller Carl McCall to set up seminars in African American and Hispanic communities. The goal is to build an understanding--and trust.

"Recently, African American investors have become more receptive," Frazier said. "They feel they've missed a great opportunity. Looking at a market that's giving us double-digit returns for years, it's a topic that has gotten everyone's interest."

Charles Grannum, 40, a Brooklyn dentist who is African American, until recently had most of his money in a savings account. When he finally began investing in the stock market, he became a first-generation investor. "Stocks and bonds were never discussed in my household," he said.

"I try to get my friends to do it, but some are old-fashioned still," he added. "They're really scared of the risk."

Those who have jumped in, he said, "quickly go out and sell whenever the market pulls back a little. They want instant gratification."

Overall, the new study shows that nearly all investors say they view stock purchases as a long-term investment, with 87 percent preaching a buy-and-hold philosophy. In answer to a separate question, however, 19 percent said they would cash out for short-term gains.

Another extremely under-served segment is the Asian community. And signs abound of how fiercely Wall Street is going after it. In a Chinese and Korean neighborhood of Flushing, Queens, Schwab and PaineWebber Inc. just opened elaborate offices. Several investment banks are adopting Chinese names--Chase Manhattan Bank has printed up brochures that mingle Chinese and Korean with English (they can't legally distribute one entirely in a foreign language, unless it is accompanied by an English prospectus).

It's a matter of simple arithmetic. The new survey shows Asians represent 4 percent of the population, but just 2 percent of the investing public. Further, median household income is $6,000 a year above that of Caucasians and $21,000 above that of African Americans, according to U.S. Census data. And Asians save 20 percent of their income, a much higher rate than the average savings level.

"Asians have a lot of money sitting in CDs and savings and looking for the channels through which they can invest their money," said Alex Lee, of L3 Advertising, a New York company that is helping several institutions, including Chase and State Street, to bridge the gap.

Generally, Chinese, Korean, Asian-Indian and Vietnamese are newer immigrants who retain their heritage strongly, Lee noted. "Japanese, generally, are either here just for a few years or have been here for generations. They are more assimilated to the American culture."

Oh, and he helped the bank choose a new name. State Street hardly means anything to people in Boston--let alone people who recently moved from China. Meet the Great Wisdom Fund.

At Schwab, the fastest-growing unit is the one that focuses on Asians. It is growing 50 percent a year--accounting for 4 percent to 5 percent of the company's overall business, according to Larry Yu, senior vice president of Schwab's Asia Pacific Services Group, which has risen from two people in 1990 to 220 now.

"They are educated and wealthy," Yu said. "All this group needs is someone to tell them how to participate." To do this, Schwab has staffed a 24-hour call center with people who speak Mandarin and Cantonese. And it ran 100 seminars this year attended by more than 1,000 people.

"What we've done is really position ourselves as an educator," Yu said. "We're debating internally whether we need to build a Chinese Web site, where they can perform real-time trading. Making an English Web site is hard enough."

There's a good case for this. According to Lee of L3, Asians rank first in home computers and Internet usage, with some 54 percent owning computers, and 59 percent online.

Lee worked closely with State Street Research to retool a green brochure geared to Chinese investors. The result is a bright red folder packed with information--in Chinese--about various mutual funds. "Historically, red is a favored color among Chinese," he said.

But, even this is delicate. "You have to be careful," Lee said, "because in some cultures, red symbolizes communism."

The Faces Of the Investor

Minorities are a vastly undertapped market for investment firms. Here is the ethnic breakout of those invested in the market, according to a study by the Investment Company Institute and the Securities Industry Association:

Ethnic background

Caucasian 90%

African American 5%

Asian 2%

Hispanic 5%

Other 2%

NOTE: Multiple responses included because Hispanics can be of any race.

Here are some other characteristics of those invested in the market:

Median age 47

Median household income $60,000

Median household financial assets $85,000

Percent who are:

Married 67%

College graduates

(or with post-graduate degrees) 53%

Employed 80%

Retired from lifetime occupation 21%

Percent of household investment decision-makers who are:

Male 26%

Female 20%

Co-decision-makers 54%

Equity investments owned:

Individual stock (net)* 54%

Inside employer-sponsored retirement plans 20%

Outside employer-sponsored retirement plans 44%

Stock mutual funds (net)* 85%

Inside employer-sponsored retirement plans 58%

Outside employer-sponsored retirement plans 57%

Bought first equity:

Before 1990 54%

1990 to 1995 28%

1996 or later 18%

Source of first equity:

Inside employee-sponsored

retirement plan 44%

Outside employee-sponsored

retirement plan 56%

Type of equity first purchased:

Individual stock only 31%

Stock mutual fund only 59%

Both individual stock

and stock mutual funds 10%

Non-equity investments owned*:

Savings accounts, money market deposit

accounts or certificates of deposit 83%

Bond investments (net)* 22%

Individual bonds 9%

Bond mutual funds 16%

Fixed or variable annuities 21%

Hybrid mutual funds 39%

Money market mutual funds 26%

Investment real estate 26%

Have employer-sponsored retirement plan coverage80%

Have IRA 53%

What became of proceeds from the most recent sale in 1998 of stock mutual funds (outside employer-sponsored retirement plans):

Reinvested the proceeds 57%

Spent all proceeds 26%

Spent part, reinvested part 17%

Of those who reinvested, here is what they bought*:

Shares of other stock mutual funds 75%

Shares of individual stocks 34%

Other type of investment 19%

*Multiple responses

NOTE: Results are from a survey conducted by the Boston Research Group under the direction of the Investment Company Institute and the Securities Industry Association. A total of 4,842 household financial decision makers were interviewed by telephone in January and February 1999. Results above are from the 2,336 decision makers who indicated their households owned equities. The overall sampling error is plus or minus 2 percent at the 95 confidence level.

The Ages of Investing

Nearly half of Americans are invested in the stock market. Of those, younger people are putting more of their assets into stocks and stock funds than are older investors.

19 to 35 years old

Median amount of household financial assets in the market: $20,000

Percent (median) of household financial assets in the market:

80%

36 to 54 years old

Median amount of household financial assets in the market: $50,000

Percent (median) of household financial assets in the market: 57%

55 to 74 years old

Median amount of household financial assets in the market: $85,000

Percent (median) of household financial assets in the market: 43%

75 and older

Median amount of household financial assets in the market: $74,000

Percent (median) of household financial assets in the market:

37%

SOURCES: Investment Company Institute, Securities Industry Association