Building Pathways Through Diversity

Multicultural initiatives are critical to understanding customers’ financial needs

by Caroline Feeney

The Asian American and Pacific Islander community is the nation’s fastest-growing population segment. Asian Americans grew from 4.5% of the U.S. population in 2000 to 6.6% by 2014, according to U.S. Census data; during this same period their buying power grew 180%, faster than for any other ethnic segment in the U.S.

Prudential’s study of the Asian American community shows that the need for a nuanced, culturally acute roadmap to helping this community realize its financial goals has never been greater. Like the U.S. general population, Asian Americans rank retirement-related goals as their top financial priorities. But relatively few Asian Americans seek the help of a financial professional – only 18% of Asian Americans currently work with a financial professional, compared with 26% of the general population.

That translates into fewer than 1 in 5 working with a financial professional, although 43% are willing to consider it. Though they cited things like high fees and feeling as if they do not have enough assets, Asian Americans said they “have never found one I can trust.”

Respect is earned… so is trust

My colleague Hurong Lou, who is a manager, financial services, for Prudential Advisors’ regional office in Marlton, N.J., says the lessons his grandmother taught him growing up as a first-generation Chinese immigrant in Philadelphia are still with him. One in particular has been an enduring theme that has carried over to his professional life.

Hurong said his grandmother taught him that “respect is earned and so is trust.” To have anyone trust you is a privilege, not a right. And she warned him never to betray that trust.

Personal and professional experience taught Hurong that Asian Americans, particularly recent and first-generation immigrants, have a certain lack of trust and understanding when it comes to working with financial advisors. Slowly and patiently, Hurong earned the trust of many in the substantial Asian-American community in the Philadelphia region.

It is this type of intimate understanding that is one of the primary drivers behind our research study, “The Asian American Financial Experience.” Conducting research into cross-sections of Americans helps us to better understand their needs and how they experience the world, which ultimately helps us to better serve them.

In a society where people are living longer, our network of financial professionals is constantly looking for and developing innovative ways of meeting our clients’ evolving needs, and working to help Americans of all socioeconomic backgrounds achieve their unique financial goals. That’s part of the reason why we make a concerted effort to develop multicultural initiatives. This allows us to drill down and to really understand the financial questions that keep people up at night.

A Diverse Diversity

And understanding these cross-sections is not as cut-and-dry as it may seem on the surface. While the U.S. population is clearly made up of diverse cultures and nationalities, many of these cultures and communities are broadly diverse in and of themselves.

For example, our study found that within the Asian American community, there are at least eight distinct nationalities. These include Chinese, which are even further distinguished between people from Taiwan and Hong Kong, Indian, Filipino, Vietnamese, Korean, Hawaiian/Pacific Islander and Japanese. Another category, “Other Asian,” makes up 16 percent of the Asian American population and includes people from Bangladesh, Cambodia, Indonesia, Laos, Malaysia, Pakistan, Singapore, Sri Lanka and Thailand.

Similar diversity can be seen within other multicultural communities that comprise the U.S. population. As daunting a challenge as that may seem, it emphasizes the importance for Prudential to stay focused on its founding principle – to make life insurance affordable for working-class families, grounded in the belief that everyone should have the opportunity to achieve financial prosperity. For the past century-and-a-half, that strong sense of responsibility has guided our efforts to help customers power their ambitions and achieve financial security across an incredibly diverse population.

One of the key findings from the survey is that the Asian American financial experience is influenced in almost every aspect by the importance of family. Asian Americans surveyed place a higher importance on providing college tuition for their children and taking care of family members as their top financial goals compared to the U.S. general population. Approximately 20% of Asian American provide financial assistance to their relatives, versus only 6% of the U.S. general population.

Embracing Financial Literacy

While Asian Americans are relatively confident they will achieve their financial goals, they do see a need to improve their financial literacy. Our study also found that Asian Americans are relatively confident they will achieve their financial goals. Reflecting a general confidence in their financial health, Asian Americans surveyed plan to retire at age 64.6, on average, a difference of 15 1/2 months compared with their non-Asian American survey participants, who on average plan to retire at age 65.9 But for all their confidence in their financial health and outlook, Asian Americans do not feel any more financial savvy than their general population counterparts.

Studies like the 2016 Asian American Financial Experience are a modern-day continuation of Prudential’s founding principles. The survey results found that even within the Asian American community, there are varying priorities.

For example, Chinese Americans are less likely to be living paycheck to paycheck and expect to rely more on personal investments and savings in retirement. While Indian Americans share similar qualities, they are more likely to care that their financial professional was recommended by a religious or community source. And Filipino Americans, more likely to be working in a mix of manual and professional careers, expect to work to supplement their income in retirement. They also cited obtaining insurance as a priority so as not to burden others.

These findings are solid proof to us that the individual knowledge and insight of our advisors is so critical. Being on the front lines, actually out there talking to individuals, our diverse team of advisors is uniquely positioned to understand this community’s needs through a combination of their own personal experiences and the knowledge gained from speaking with people every day.

When Population Mirrors the Workforce

It is one thing to conduct research and to study, which is extremely valuable. However, that cannot take the place of practical experience. The reality is that our population is richly diverse. Recruiting an equally diverse workforce that reflects our customers is a must. Our advisors share many of the same experiences as our customers and often live within the communities they serve, further helping them to make credible connections.

The combination of research and practical experience helps us to develop a nuanced roadmap to help Asian Americans and all multicultural groups realize their financial goals. Companies that take the time to really understand their customers, what makes them unique, what is most important to them and what their biggest concerns are, are best-positioned to serve them.

We also do similar studies on the financial experience of women, African Americans, Hispanic Americans and the LGBT community. Our research is a component of a broader effort within the company. It teaches us that a we need a multi-faceted, multi-cultural approach to working with our clients. A “one size fits all” approach will not cut it.

We need to get into our communities and really get to understand different cultures and the things that matter most to them. Pathways and our signature study series are just some of the ways we really get to understand the priorities of our incredibly diverse customers.

And while it is critical to understand the unique priorities of different groups, it is equally important to remember that there are some truths and priorities we all share. When it comes to working with financial professionals, our study found that both Asian Americans and the general U.S. population believe the best ways for financial professionals to build trust is by treating clients with respect and being someone who is “reliable and follows through” on their promises. Being “upfront and transparent” is also important.

We can’t truly help the different communities achieve their financial dreams without deep insight into their experiences and needs.◊

“Prudential Advisors” is a brand name of The Prudential Insurance Company of America and its subsidiaries.

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