Rebecca Schreiber, CFP, RIA, didn’t plan to have a multicultural financial-planning practice. In fact, she didn’t start out wanting to be a financial planner. She got into the business because she couldn’t find a fee-only planner she could afford; so she took some courses to educate herself and continued when she saw it was something she was interested in—and something from which she could make a living.
Her firm, Solid Ground Financial Planning, in the Washington, D.C., suburb of Silver Spring, Md., draws its clients from the diverse population of the nation’s capital. Many of her clients are first-generation Asian-Americans (Japanese, Thai, Chinese) and African-Americans (from a diverse number of countries), who work in the federal government. And while they come to her with financial problems that are unique to their backgrounds, Schreiber sees an even stronger force at work: their age. She and her clients are Gen Xers, which she sees as a factor that transcends culture and country. “We speak the same language,” she says. “We have the same culture—the culture of Gen X.”
And just what is that culture? “They think that if they have the right information, they’ll be successful,” she says. “They appreciate advice that allows for different outcomes and like to know they have options.” And transparency is key, she adds, because Gen Xers are “highly skeptical—the product of Enron and WorldCom.”
The family unit
That’s not to say that Schreiber isn’t addressing their culture-specific needs. She has found that she has to address the whole family, sometimes two or three generations. “Unlike American families whose generations separate their financial assets, many multicultural families approach financial stability as a group effort,” she says. This often includes all of them living under one roof, which lowers living and child-care costs.
Additionally, she has found that her clients, especially Asian-Americans, are their own Sandwich Generation because they are expected to care for their parents and in-laws, as well as their children. “The family is one unit,” she says. ”Their survival is made as a whole. Whoever can, supports the others. So you have to ask them who they’re taking care of and if they expect to take care of others in the future.”
She also notes that these young Asian-American clients often have “more cash than they know what to do with because they inherited a frugal nature from their parents,” she says. Additionally, it is often the case that the parents give substantial cash gifts to the children to invest.
In addition, you have to “plan for a broader range of possibilities,” says Schreiber. She points to a client who needed to send money on an ongoing basis to her relatives in Africa, which had an impact on her planning. On the flip side are the opportunities, such as the ability to buy property overseas, again something that Schreiber has to take into account when doing her clients’ planning.
Do’s and don’ts
Here are some pointers to be aware of as you address the needs of multicultural Gen X clients:
- “They don’t want to hear, ’Don’t worry about it. I’ll take care of it. You’ll be fine.’ They don’t trust that way,” says Schreiber.
- They are “not that into life insurance.” She calls it a hard but necessary sell.
- Don’t talk down to them. Many Gen X women earn as much or more money than their husbands. They want equality in their finances and often want to keep separate accounts.
- They want you to “really lay the cards on the table from the beginning,” she says. Transparency is key.
- Schreiber gets her name out into the community through guest columns in publications and through radio interviews. It’s something that they remember, she says.
Schreiber finds that the journey with her Gen X clients from multicultural families has been well worth it, but she cautions others who are thinking of tapping this market that they need to be ready for a challenge. “They are very well educated and very picky consumers,” she says. “They will maintain long-term relationships, but you have to earn them. They’re not afraid to go elsewhere.”
Maggie Leyes is a freelance writer and a regular contributor to Advisor Today.