The Government of Canada met its goal to resettle 25,000 Syrian refugees several months ago. Preparing for this influx has been a reminder to people working in the financial services community just how critical and challenging the task of helping newcomers integrate into this country’s financial culture can be. And those refugees represent a small fraction of the new immigrants who will arrive in Canada this year.
Immigration in general is on the rise in Canada, with admission targets up by more than 7% this year over 2015. John McCallum, federal minister of immigration, refugees and citizenship, announced in March that Canada will welcome 300,000 newcomers this year – the highest number of immigrants to this country in modern times. So, dealing with new immigrants will become an important part of many financial advisors’ business.
Even those immigrants who arrive in Canada with some degree of financial stability will face challenges in establishing financial roots here. While the major banks have programs in place to help assimilate newcomers into Canada’s financial mainstream, you can play a role in helping your newly immigrant clients navigate the many challenges they will face in starting their new financial life in Canada.
“It is a very intimidating thing moving to a new country, learning a new language and, for lots of people, knowing no one else,” says Raymond Chun, senior vice president, everyday banking and customer strategy and analytics with TD Canada Trust in Toronto. “It’s difficult for individuals to figure out what they need in the early days. Having someone walk you through something as complicated as financial services is actually a huge benefit.”
The key is to avoid overwhelming newcomers with information or choices while also providing what might be needed to get through the first several months in Canada, according to Christine Shisler, director of multicultural markets with Royal Bank of Canada (RBC) in Toronto. RBC, for example, has enhanced its Newcomer Advantage program over the past 18 months with benefits such as lower rates on foreign-exchange transactions, a promotional bonus for opening up a business account and free use of a safety deposit box for a year.
“We do know that starting that first relationship with the bank happens very early [for immigrants],” Shisler says, “within the first 30 days in Canada.”
But beginning the process of explaining what makes Canada’s financial culture unique also is important, says Chun. To that end, TD has created financial literacy packages (available in several languages, including Arabic) that TD advisors can share with their clients. Over the past several months, TD’s branches have begun disseminating this information among newly Canadian clients. TD has worked with immigration offices and community centres that provide support to refugees to help guide these new families through some of the concepts that define Canada’s financial culture. These efforts can help bridge cultural gaps that need to be explained as early as possible, says Chun: “Depending on where you’re coming from, even the concept of credit can be new.”
Promoting financial literacy is key in working with newcomers, according to John Saikaley, financial advisor with Desjardins Financial Security in Ottawa. As a first-generation Canadian (Saikaley’s parents moved here from Lebanon before he was born), he is one of only a handful of certified financial planners in Canada who speak Arabic. He doesn’t yet have any Syrian clients, but one of his colleagues, who came to Canada from Syria only a few years ago, works exclusively with Syrian clients. Saikaley does, however, work with several Arabic-speaking immigrants. Building trust with these clients takes time, Saikaley says. “You can’t just be in it for the money.”
Below are some tips to keep in mind when working with newly immigrant clients:
– Find out what brought them here
Shelley Smith, financial planner with TD Wealth Financial Planning in Toronto, points out that although immigrants are starting from scratch in building a new life in Canada, that doesn’t mean they are uneducated or broke. Many, in fact, are ideal clients, in that their former professions may have enabled them to develop good saving habits that will help tide these immigrants over while they seek employment in Canada.
Many immigrants choose to start their own business or seek out educational opportunities – both areas in which you can help them devise a plan, Smith says.
– Become familiar with their traditions
“What we tend to find with newcomers,” says Richa Hingorani, senior manager, financial planning support, with RBC in Toronto, “is that [immigrants] often speak in family terms a lot more than we would find with other clients.”
Immigrants often insist on considering the opinions of family members before making decisions, she adds. Siblings, grandparents, even children (especially in the case of education planning) often are included in the discussion.
Saikaley points out that his job often includes home visits with immigrant clients, and these meetings usually require more than the usual 40 minutes. Much of the extra time may be devoted to such issues as education planning or the benefits of life insurance over mortgage life insurance, both of which are unfamiliar concepts to many newcomers. But hospitality also is a big factor. Visiting the home of an immigrant client family, Saikaley says, often requires taking the time to loosen his tie, sit down for some refreshments and catch up with all the family members.
“The kids call me ‘uncle’,” he says, “and I try to remember to carry some candy in my pocket.”
While immersing yourself in someone else’s culture can be disconcerting at first, it can also be rewarding.
Although Saikaley is not Muslim, he respects that faith. “I attend their functions and pray with them,” he says. You can’t expect to work with any immigrant group, he says, without participating in some of their cultural practices.
– Find out what concerns them
Most immigrants have taken risks, in one form or another, in order to come to Canada, Saikaley says. So, don’t expect these clients to take risks with their finances. In fact, some immigrants come from cultures in which institutions are mistrusted – one reason why some immigrants hide their cash in their homes.
Although the level of sophistication and knowledge is very diverse among newcomers, Shisler says, most share common goals. Not surprising, a common concern for most newcomers is protecting their financial nest egg. That is why tax-planning strategies are important to these clients.
Another concern is liquidity, because these clients may need cash to purchase a car or put a down payment on a house. Products such as tax-free savings accounts, with their built-in tax efficiency and easy withdrawal options, are ideal solutions for newcomers, Shisler says.
Darren Coleman, senior vice president and portfolio manager, private client group, with Coleman Wealth (a unit of Raymond James Ltd.) in Toronto, recommends researching the financial culture of any new client. That advice especially pertains to newcomers, he says, because their approach may be unfamiliar to you. “What’s their normal?” he asks.
Coleman likes to explore with newcomers how money is handled in their families. He usually opens the discussion by saying: “Walk me through how you were taught to handle money.”
One of his clients, for example, grew up in Poland in the 1940s. Says Coleman: “His paradigm around money and his trust in government are very different from ours.”
Every decision a client makes – newcomer or otherwise – is filtered through this process, Coleman adds, so he recommends applying it to all client relationships.
– Become familiar with potential pitfalls
Clients who grew up in Canada have had their whole lives to build a financial identity at a relatively calm pace, Chun says. But that time frame is condensed for older newcomers arriving in Canada. That’s why you should meet with newly immigrant clients more frequently than your other clients.
“As they’re learning about Canada and what they want to do,” Chun says,”those dreams start to change much more rapidly than for people who grew up here their whole life.”
Credit, for example, is an unfamiliar concept for people from some cultures, but is essential to building a life here. But credit is not without its drawbacks. As with anyone, debt can become overwhelming if it is not managed properly. So, even though you are not a debt counsellor, warn your clients that although credit can be an indispensable tool, debt can be dangerous.
Saikaley says he has seen a few new Canadians get into trouble with credit. Because it’s a brand new concept for some, particularly Muslims, immigrants can fail to understand how quickly debt can balloon out of control. This danger is magnified by “no money down, no interest” promotions.
Newcomers also have varying levels of experience regarding investments, says Smith. Dealing with “stock market virgins” – people who have never experienced the ups and downs of investing in the stock market or an equities-based mutual fund – can be challenging, especially when there is a dip in the market.
Although there are some challenges to catering to new Canadians, the rewards are gratifying, Smith says. She has been invited to open houses and retirement parties by immigrants with whom she has worked for several years. “It’s fantastic,” she says. “It’s why you love being a financial planner – because you love helping people.”
And, she adds, satisfied immigrant clients provide referrals.
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