Immigrants to Canada arrive with a whole array of financial planning needs, and advisors who develop relationships early can grow their business while helping newcomers to settle in.

“Newcomers are the future of this country,” said Tina Tehranchian, CFP and branch manager at Assante Capital Management in Richmond Hill, Ont. “If you start a relationship with them early on when they arrive, within a few years many are going to be very prosperous. Many are entrepreneurs that could be great prospects for financial planners.”

Tehranchian emigrated from Iran in 1990, and is currently active in the Iranian community in the Toronto area.

Newcomers to Canada arrive from various regions of the world, and therefore have very different backgrounds when it comes to finance and taxation. But Tehranchian says one underlying theme is that many are unaware of the details of Canada’s financial services systems, available products and tax regulations. “It is important for newcomers to try to start educating themselves about financial planning here in Canada, at least learning about the different strategies and products that are available.” And advisors and planners should be there to help out.

Tehranchian says risk management is the first thing that newcomers should consider. While a family might not be on ideal financial footing, products like life insurance and critical illness insurance are an important start in order to avoid debilitating problems. Later, as they become more established, other longer-term considerations such as retirement and savings for children’s education can come into play.

According to Tehranchian, the financial planning community is generally open to working with newcomers to Canada, although she points to the understandable prevalence of short-term goals as a possible stumbling block for some advisors. “Most newcomers are not initially willing to make long-term commitments,” she said, due to the uncertainty of their new situation and the plethora of issues to deal with when immigrating. “And a lot of the financial products that we have in Canada are geared towards long-term commitment.”

Clients from other countries will often require a little extra time in order to educate them about strategies, products and options in Canada, said Tehranchian. But that can be true of any client, she added. “Things that are specific to Canada, such as RRSPs and RESPs, definitely, no matter where [newcomers] are coming from you need to go over the basics,” she said. “But sometimes you have to do the same thing with young clients who were born here in Canada as well.”

Clients might need to learn, but it’s also vital that advisors take the time to educate themselves about the needs of their clients. In many cases, cultural differences can affect the planning needs of an immigrant client. For example, retirement planning takes on a whole new meaning if the retiree is expected to financially take care of older or extended family members as well.

“The financial planner has to be sensitive to those differences,” said Tehranchian. Although she added that a conscientious planner will respect those differences while at the same time ensuring the client has all the information. “It’s also important to educate [newcomers] about how things are in Canada and the fact that their children might be more attuned to Canada’s culture than that of the country they left.”

Tehranchian points to special strategies that apply to newcomers, such as immigrant trusts. In some circumstances, these trusts can be established before a newcomer arrives, but they must be created within the first five years of becoming a resident. For those that arrive with personal assets, these trusts allow them to grow that money in a tax-sheltered way for up to five years. Tehranchian says many of her newcomer clients were not aware of this opportunity and without the right advice could miss out on one or more years of tax-deferred investing.

According to the Financial Planners Standards Council, the 2006 Census counted more than 6 million people who were born outside of Canada, representing one in five, or 20%, of the total population. This is the highest proportion of foreign-born population in 75 years. As well, immigration was responsible for two-thirds of Canada’s population growth between 2001-2006.

Advisors take note. “Whether you target a specific ethnic market or not, more than half of the population of Toronto is from different backgrounds,” said Tehranchian. “Any financial planner would be exposed to different cultures and different backgrounds. Inevitably we all have to develop a sensitivity to the needs of newcomers.”