Customizing advice for newcomers

This can vary widely. Raymond Yates, financial advisor and senior partner with Save Right Financial Inc. in Mississauga, Ont., says some newcomers have immediate access to the support of family, which makes settling in much easier. Other newcomers are in “a state of flux,” he says, and it is often “the role of the advisor to guide them through the ‘dos and don’ts’ of the Canadian landscape.”

Still others “come with a blank slate” and need all the help they can get, adds Rhowena Adolfo, director, Oshawa-Whitby division, and consultant with Winnipeg-based Investors Group Inc. in Whitby, Ont., whether it’s through governmental agencies or community-based groups.

Pankaj Mehra, director of India, South Asia and the Philippines markets with Bank of Nova Scotia in Toronto, has found that some newcomers use the Internet to learn about Canada’s banking system prior to arrival. He says Scotiabank also has strategic alliances with local partners in several countries, as well as an extensive international branch network that allows newcomers to open accounts before they arrive in Canada. These clients can be “up and running when they land,” he says. (See story on page 12.)

Some other Canadian banks have similar arrangements, giving them an edge over non-bank financial advisors. Banks also have the advantages of a national presence and huge branch networks.

“Banks are in a privileged position,” says Yates, “because newcomers turn to them first for certain essential requirements, such as savings and chequing accounts.”

Banks have seized the opportunity to connect strongly with this market by designing specific programs for newcomers. The features of these programs vary but generally include: no fee, unlimited savings and chequing accounts and debit card transactions for between six months and one year; unsecured and secured, no credit history-required credit cards; free safety deposit boxes for up to one year; and preferred rates on foreign-exchange transactions.

Paul Sy, director of multicultural banking with Royal Bank of Canada (RBC) in Toronto, says RBC offers a no-fee chequing facility because newcomers typically need a void cheque to rent a home. As well, these clients benefit from preferential foreign-exchange rates because newcomers are three times more likely to use foreign exchange. The offer of no credit history-required credit cards, if used appropriately, gives newcomers the opportunity to build a credit history, which can be essential when it comes time to obtain a mortgage or a car loan.

@page_break@ Some banks have designed special arrangements for mortgages or for financing with certain car dealerships for newcomers, although these clients must meet standard credit criteria.

Eric Liu, an advisor with Edward Jones in Vancouver, works mostly with newcomers from China. He has found that many clients need to become familiar with the concepts of financial planning and investing in equities. These clients are more inclined to engage in more familiar investments, such as real estate or income-producing products that preserve wealth.

The next generation is of prime importance to many of Liu’s clients. “They care about their children,” Liu says, so he often recommends product-specific strategies such as registered education savings plans.

Once Liu gains greater access to his newcomer clients, he then explores further “options that generate higher returns” than similar bank products and services.

Liu also introduces other products, such as life insurance and segregated funds: “I take them through the five steps of financial planning.” His objective is to see that his clients receive more value from one source of advice, and thus win their loyalty as clients.

Banks, of course, remain strong players. Mehra says that more bank branches are staffed by some individuals who speak the language of the community in which newcomers settle. Scotiabank offers an online branch locator in 53 languages, allowing newcomers to locate the branch most suitable for them.

Sy says RBC can serve its clients in 180 languages. If a newcomer walks into an RBC branch in which the preferred language is not spoken, staff will use a “private conference room to ‘conference in’ with someone who can speak the required language.”

When a newcomer visits a Scotiabank branch, a needs analysis is conducted prior to assigning the appropriate staff, says Mehra. The bank doesn’t “push products,” he adds, but tries to find the most relevant strategy. Once a relationship is established, newcomers can access and monitor their accounts electronically or through the branch network in a manner similar to all Canadians. These clients are made aware of the limits and restrictions on their accounts, the use of passwords and personal identification numbers, and, more important, of the necessity of maintaining a good credit history.

In Adolfo’s case, if newcomers already have banking relationships, she reviews “what [they have] already done or already know since arriving in Canada.” If no prior relationships exist, Adolfo explains the kinds of accounts that are available, the use of credit and, in general, how the financial system works. Later, she discusses the client’s goals and outlines options.

Throughout the process, you need to appreciate what your clients are dealing with. They “have a multitude of important tasks to attend to,” says Sy, “such as finding new homes, schools for their kids and jobs – a process that can be overwhelming.”

It takes time to connect with newcomers, Yates says, but it’s time well spent: “Be patient, and you can end up getting a family of newcomers as clients.”

Meeting the needs of NEWCOMERS

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

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