New and recent immigrants are the fastest growing segment of this country's affluent, presenting an opportunity for advisors. But those seeking to win them over, may need to up their game and find areas of specialization.
New and recent immigrants are the fastest growing segment of this country's affluent, presenting an opportunity for advisors. But those seeking to win them over, may need to up their game and find areas of specialization.
The Statue of Liberty welcomes “poor,” “wretched” and “huddling masses,” but recent immigrants to North America are now far more likely to be wealthy, sophisticated and urbane. A new study by BMO Harris Private Banking shows that new and recent Canadians now account for about a third of the country’s affluent population.
As the fastest growing segment of the mass affluent in Canada, these new Canadians present an opportunity for advisors. But those seeking to win them over, may need to raise their game and find areas of specialization.
“One bit of advice is that these people are more aware and more educated than earlier generations of immigrants: they really know what’s happening, they are educated and sophisticated, so you really need to know your stuff,” says Anita Dalakoti, an multilingual Indian-born advisor in Vancouver specializing in insurance and investment solutions.
The study by BMO Harris Private Banking revealed that about 24% of those who are considered affluent, having investible income of $1 million or more, are immigrants to Canada while an additional 24% or describe themselves as first-generation Canadians with at least one parent born outside of Canada. Among this group, 68% reported that their wealth was self-made.
This demographic shift has provided a boon for advisors with well-established connections in immigrant communities. Vishu Dhiri , advisor with Global Securities in Surrey, has a strong center of influence in the South Asian community. He has been seeing a definite increase in the client base and their wallet size over the past decade. “I would say 75-80% of my clients are first generation immigrants and the balance are second or third generation.”
Part of the shift is because Canada major cities score high on global livability indexes, attracting wealthy immigrants seeking lifestyle benefits. In addition, for several decades Canada has eased entry for skilled professionals as well as “business class”
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and “entrepreneur class” immigrants, the latter two being those who show specific intention to invest or start enterprises. That means that new and recent Canadians are wealthier, and are often elite and demanding clients.
“Because of larger immigration more people are arriving and a great proportion of them are professionals who have a knowledge of the stock markets already from [places like] India,” says Dhiri. “They are a growing market, but also there are those who have been here for a number of years, who have been building wealth and growing their businesses. They are a group who very much value financial services.”
Networking is important. Dhiri is an active member of the South Asian Business Association and attends Punjab Cultural University alumni meetings which twice a year in the Vancouver area. He also is active in providing seminars and in business and community groups. “All these activities help me in growing my business and also help me provide vital services to the community and letting them know what is available.”
Networking can also help you identify specific demands and needs of each cultural community, areas which may require specialization and tailored advice.
Dalakoti, who lived for 18 years in China and speaks Mandarin (in addition to English, Hindi, Russian, Urdu and basic French) notes that the Chinese immigrants of recent years are quite different than those of the 1990s.
“The Hong Kong guys were from a different era and they have done well too. Their kids have gone to schools and universities here, they have businesses and they are well established,” she says. “It’s predominantly mainland Chinese now. The new Chinese who are coming, in my experience, come in with a lot of money and they are finding a way to place it and live here.”
Often the main breadwinner will remain running a business in China, while the spouse and children settle in Canada. “One of their interests is in getting money into Canada legally,” says Dalakoti. “They buy large properties here and they want the Canadian passport as a form of security. But their wealth and their ability to generate income is still in China.”
“These people are going to need people like us to guide them,” says Dalakoti. “There are so many legal ways of doing things in Canada. Many of these people may not know then, but they don’t want to figure things them out themselves. My advice [to them] is always: ‘find and advisor, or find an accountant who is dealing with things like this and let the professionals handle it or at least advise you.’”
