Only five years into his career as a financial advisor, 25-year-old Saad Rehman has already established a unique specialization serving a market that boasts huge potential: the Canadian Muslim community.

The Saskatoon-based wealth advisor with ScotiaMcLeod Inc. is committed to educating Muslim Canadians on investing and financial planning. He hopes to grow his business by focusing on this underserved segment of the Canadian population.

“There’s a very narrow segment of the Muslim population that invests right now,” Rehman says. “There’s a gap in the community when it comes to investment knowledge.”

Muslims who choose to abide by Islamic principles in all aspects of their lives have unique financial needs, including products that are compliant with these principles. A lack of such offerings, and a lack of advisors catering to their community, has left Muslims in Canada with limited options when it comes to financial services.

Rehman, born in Pakistan and of the Muslim faith, is able to relate closely to the Muslim immigrant community. He immigrated to Canada as a child, spending a few years in Toronto before moving to Saskatoon in 2002, where he earned a degree in economics from the University of Saskatchewan.

Rehman joined ScotiaMcLeod a year ago. Rather than developing his own book of business from scratch, he joined the practice of an advisor with almost 30 years of experience. This has allowed Rehman to learn from a seasoned professional and work with the existing clients of the practice while also attracting new clients.

The joint practice offers comprehensive financial planning services, including both asset management and insurance planning, and targets clients with at least $250,000 in investible assets.

Rehman’s efforts to attract his own clients are largely focused on the Canadian Muslim community, which currently numbers more than one million. He has found his Muslim background helpful in this pursuit, including his familiarity with Shariah law — the body of law that guides all aspects of Muslim life, including financial dealings.

In order to be Shariah-compliant, financial products must meet a variety of criteria. For instance, Shariah law prohibits interest payments, investments in highly leveraged companies and financial involvement in certain sectors, including alcohol and gambling.

But there is no unanimous ruling on what is Shariah-compliant. “Like any religion,” Rehman says, “everything is open for interpretation.”

Through his personal connections to the Muslim community, and through referrals and semi-nars, Rehman has generated a base of Muslim clients that comprises about 15% of his total assets under management. His goal is to expand this proportion to at least 25% of his total AUM.

These assets need not be based in Saskatoon. Rehman recently agreed to take on several clients in Ontario referred to him after they couldn’t find a local advisor knowledgeable on Islamic finance.

“My target market is, as I look at it, all of Canada,” Rehman says.

Rehman says the Muslim market can be lucrative. Some members of the community hold investible assets of millions of dollars in bank accounts, which they’ve never considered investing. Rehman finds that after educating these individuals, however, they often embrace investing. And for Muslim clients without asset-management needs, financial advisors have an opportunity to serve their insurance needs.

“I think there’s a huge opportunity in the insurance segment,” Rehman says. “Not everybody is going to have investible assets, but everybody will always have risk factors to cover.”

When working with Muslim clients, Rehman finds that education is an important part of the process. As many new clients have never invested, he says they typically have little financial knowledge.

“You’re planning for a person who’s not familiar with investments at all,” Rehman says. “It takes time for them to understand the markets and investment concepts, and, further to that, the [Shariah-compliant] opportunities.”

Furthermore, as Muslim clients vary drastically in the degree to which they’ll embrace financial products, it’s important to understand each client’s unique beliefs, Rehman says: “You really have to know the religion, and how that would tie in.”

The limited scope of Shariah-compliant investment products presents another challenge to working with Muslim clients. With few such managed products offered in Canada, Rehman typically conducts his own research to determine which specific stocks and products are acceptable for a client’s portfolio.

“It’s a really narrow universe of opportunities,” he says.

These challenges can add up to much more time spent with these clients. In fact, Rehman estimates that he puts in twice as much time and effort when working with Muslim clients than with his non-Muslim clients.

@page_break@So, why bother putting in so much extra time and effort? “Once the educational level is there and they’ve built that trust,” Rehman says, “then they are great clients to have.”

He points out that fostering relationships with Muslim clients can lead to plenty of referrals. Saskatoon’s Muslim community of about 5,000 to 6,000 is fairly tight-knit, connected through such organizations as the Saskatoon Muslim Foundation. And, as Rehman learned when he received referrals to clients in Ontario, the local Muslim community’s connections extend beyond city borders. Another reason for Rehman’s pursuit of the Muslim market is his sense of responsibility to help his community enjoy the benefits of investing and understand the importance of financial planning.

“My social responsibility, to an extent,” he says, “is to educate other Muslim people.”

Rehman is hopeful that other members of the financial services industry will make similar efforts to educate and serve the Muslim community. He is currently writing a book on Islamic finance, and is working to develop a curriculum for an Islamic finance course to be offered at the University of Saskatchewan, which he hopes will foster greater knowledge of and growth in the sector in Canada. IE