ETHNIHUBTM Study Says Newcomers Turn to Family for Financial Advice, Not Experts

In a recent study by ETHNIHUBTM, the diverse audience intelligence platform, only 29% of newcomers seek the help of a professional financial adviser. And the reason why may be closely tied to culture.

The majority of new Canadians emigrate from China, India, and the Philippines. These are the three largest ethno-cultural groups in Canada. And they come from collectivist societies where people prioritize the interest of the group and not of the individual.

According to Hofstede Insights’ 6-D Model that provides an overview of the deep drivers of a country’s culture in comparison with other world cultures, China scored 20 and the Philippines 32 in INDIVIDUALISM. This index determines the degree of interdependence a society maintains among its members. Meanwhile, India has earned an intermediate score of 48, the highest among the three countries, which means that it has both collectivist and individualistic traits.

In a collectivist culture, the family takes precedence over people outside of this close circle. Banking and financial experts fall outside of this sphere and are essentially strangers to newcomers. 39% of newcomers seek the advice of family and friends when it comes to their finances. A financial decision significantly impacts their day-to-day lives and would not be entrusted to a “stranger.”

Even though financial advisors are considered experts and essentially know better, newcomers would defer to elder family members for sound advice on money matters.

On Choosing Their First Canadian Bank
Given this culturally driven disposition, it does not come as a surprise that among the newcomers polled 48% choose their first bank based on their family’s recommendation. Also, most newcomers live with the family when they first arrive in the country. According to the same study, 42% live with their extended family in a multi-generational household.
Often, relatives who came before them offer critical support in the areas of health, wellness, education, and emotional well-being. And even financial support when newcomers are just starting and have yet to secure employment to earn a steady income. And so, the opinion of these trusted and close contacts is highly valued.

Family versus Financial Experts
The findings of this ETHNIHUBTM study should serve as a gentle reminder to banking and financial institutions that when dealing with newcomer customers, the approach is not always cold, straightforward, and business-like. Perhaps the best way they can woo this segment is to make newcomers realize that they can trust financial advisers and that they always have their best interests in mind.

Remember too that they would not only be speaking to a nuclear family. For newcomers, the mantra “all for one, one for all ” applies. Older parents, uncles, aunts, even cousins have an opinion on the financial journey of the whole household.

Each member matters and is well-esteemed. So be warm, go up close, and personal. After all, that’s how one treats family right?

If you want to get more information on ETHNIHUBTM or learn how to connect with multicultural audiences, contact us.