Laying out the welcome mat

The 2011 census shows that about 250,000 immigrants came to Canada every year between 2006 and 2011. Their arrival provides a growing opportunity for financial advisors, whose guidance is often essential for newcomers who must weave their way through the ins and outs of an unfamiliar financial system.

“The whole process of getting established in Canada can be very overwhelming – finding a home, getting your kids in school, etc.,” says Paul Sy, director of multicultural banking with Royal Bank of Canada (RBC). “So, having the right financial advice and having someone walk you through everything can help set goals and set you on the right path right from the beginning.”

In general, newcomers head to communities where the job possibilities are greatest and where there may already be an established community of people from the same region or country. Typically, that means Toronto and Vancouver, but the boom towns of the West – Calgary, Edmonton, Regina and Saskatoon – are also attracting many new arrivals from other countries. About 155,000 of the immigrants in the 2006-11 period were economic immigrants – people selected for their skills and ability to contribute to Canada’s economy, including skilled workers and business people.

Many immigrants find that getting started in a new banking system is daunting – and sometimes even scary. Common barriers to Canada’s financial system were cited during a 2011 Forum on Financial Literacy for Newcomers to Canada sponsored by Social and Enterprise Development Innovations, a charitable organization with the mandate to expand economic opportunities for Canadians living in poverty.

The challenges for immigrants include language barriers, access to useful and relevant information, confidence, cultural barriers and difficulty in getting credit.

Both advisors and financial services institutions need to consider the background of newcomers, says Douglas Melville, ombudsman and CEO of the Ombudsman for Banking Services and Investments: “In some communities, there is a natural distrust of government and regulatory bodies and law enforcement, given some of the experiences they had back home. You have to get over that hurdle in order to earn their trust and have them be comfortable opening up.”

Newcomers also may not be aware of the details of the Canadian legal system and how those apply to financial services. For example, Melville says, many may not understand the financial obligations that go with getting a credit card or that sharing their PIN with another person can put them at financial and legal risk.

But, he says, advisors can provide the right kind of advice, which is prescribed by regulatory authority, and products that have been approved for distribution: “[Advisors help] by taking the extra time to help newcomers truly appreciate the significance of their rights and obligations on every product and service that is sold to them.”

Financial services institutions – which appreciate that newcomers are responsible for two-thirds of Canada’s population growth and thus are a key part of these firms’ future markets – are responding to these challenges. Many firms now offer special services and products to help orient newcomers to the Canadian financial system, including extensive marketing campaigns aimed at letting newcomers know that these services are available.

@page_break@ Indeed, visibility is the No. 1 reason newcomers make banks their first stop when seeking financial information such as the basics of day-to-day banking, chequing accounts and how to use ATMs in Canada.

It’s also the place where many newcomers learn the importance of establishing a good credit history, says Sy. “Canadians take for granted how important a credit history is. When it comes to getting your first apartment, renting a car, getting a mortgage for your first home, [you need a good credit history],” he says, noting that RBC will show newcomers how to go about building up their credit score.

RBC has also introduced a six-month, no-fee account with unlimited transactions and cheques, a preferred rate on foreign-exchange transactions for 12 months and discounts on other products and services.

Sy says RBC encourages newcomers to get good advice in order to fulfil both their financial obligations and their dreams: “The whole advice piece is so important because you can have the right products and services, but, because the situation of each newcomer is so different and their goals are so different you really want to tailor the products and services.”

When it comes to language, RBC call centres have had a service in place for two years that has the ability to translate 180 languages. The service was rolled out to about 300 branches this past July. “From that aspect,” says Sy, “it’s not just the delivery of the advice; it’s putting in place the infrastructure so that that advice is meaningful and relevant.”

Some immigrants don’t need to wait until they come to Canada to start their banking in this country. Bank of Nova Scotia, for example, offers in-country resources in India, China and Mexico, says Winnie Leong, vice president of multicultural banking at Scotiabank. The bank also offers financial literacy programs and workshops for immigrants once they arrive in Canada.

There are three main groups of newcomers that Scotiabank sees coming into its branches: landed immigrants, including skilled workers; foreign workers here on permits; and international students who come to Canada to pursue their professional and academic ambitions.

Many of these clients are looking for financial advice and some may have worked with financial advisors in their home country. “That depends on the customer and on where they come from,” says Leong. “Some of them are very affluent and have worked with investment advisors. Some may just want to start a savings plan.”

Financial institutions have taken different approaches to getting their names out to newcomers. In Toronto, for example, the Scotiabank CHIN Picnic and the Scotiabank Caribbean Carnival are two major ethno-cultural events.

Winnipeg-based Investors Group Inc., which has more than 100 offices across Canada, hires members of minority groups to become advisors, who then reach out through various means, such as advertising in local ethnic-language publications, says Vas Pachapurkar, Investors Group’s vice president, financial services, for Ontario. As well, the firm takes a very grassroots approach, he says, working with local chambers of commerce and other community-based organizations.

Once newcomers have learned the basics of banking, they often seek out alternatives to banks, says Pachapurkar: “People often start at a bank, learning how to get a credit card and credit history. But once they start to accumulate money, they often ask: ‘What else is out there?’ and go online and find us.” IE

In the October issue: Tips on finding the right newcomer clients

In the first of a three-part series, IE looks at the services and products that advisors can offer to the newly arrived

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