Migrants on the moove

Migrants can be an affluent market for financial planners, but, it seems, also a difficult one which requires much patience and hard work before it pays off.

Migrants can be an affluent market for financial planners, but, it seems, also a difficult one which requires much patience and hard work before it pays off.

With nearly one in four Australians having been born overseas, the migrant mar-ket is a big and growing one. Indeed, over 112,300 people made this country their home last year alone and the inflows are expected to continue.

New Zealand and Britain have traditionally been the largest source of migrants, but other regions, most notably Asia, are rising in importance.

And, given Australia's focus on letting in business and skilled migrants, many of the newcomers are either rather wealthy or are likely to be high income earn-ers.

Every financial planner's dream? Not necessarily, it seems.

"I am always happy to help migrants, but I don't actively seek them as clients. They are much more difficult as customers," says Jossel Ginsburg of Ginsburg Fi-nancial Services who deals with English speaking immigrants from South Africa, the United States, Britain and Canada.

"The migrant market is entirely different to the local market," adds Simon Wu, who operates as part of the Count Wealth Accountants network and boast clients from Hong Kong, Mainland China, Taiwan, Malaysia and Indonesia, all of whom are of Chinese origin.

"You first have to break the language barrier and then you have to deal with the cultural differences," he says.

"Chinese clients know very little about financial planning concepts and, yet, they are big investors and gamblers. They want quick returns which don't always gel with reality."

Wu and other financial planners say they spend much time educating their clients about how to invest in Australia. And, those who deal with clients fresh off the plane say they have to offer a much wider service than just financial planning.

"Much of my time with new immigrants is spent looking through my client list to see to see who can help them with something else they need," Ginsburg says.

Likewise, Matthew Poon, an Associated Planners authorised representative whose clients are mainly from Hong Kong, says many of his clients will also ask him to recommend a good school or doctor.

Those dealing in the migrant market say building up a client base takes much more time and patience - and often means doing a lot of work for nothing.

"If they trust you, Australians will deal with you right away, but South Afri-cans tend to shop around, which often adds to their confusion," Ginsburg says.

Poon adds: "Australians see my credentials and trust them immediately. But many of my migrant customers only come back 2-3 years later and give me money to in-vest."

Wu concurs, noting that some clients visit him four or five times before making investment decisions. "It takes time to build up trust," he says.

Both Wu an Poon add that most Chinese clients will not disclose all their assets and liabilities, making the job of financial planning harder.

These clients are also a lot more sensitive about fees and all charges have to be justified, says Wu.

One key similarity amongst just about all immigrants is a need to buy property quickly.

"Housing is a big concern of migrants. We try and slow them down a bit," says Gordon Hatch, manager of Taurus Financial Services in Chatswood, who says about 30 per cent of his clients are ex-South Africans.

"Migrants have a natural tendency to put their money into bricks and mortar, or the bank," notes Michael Mant, manager of RetireInvest's Paramatta office, who has many Maltese and Italian clients.

"Its only after a friend or family member has a satisfactory experience with a financial planner that they will consider consulting one," he says.

Most of Poon's clients own a lot more direct residential property than Austra-lians . "I think it is a cultural thing, having some tiles above their heads," he says.

"My clients always say that you can touch property," Wu adds. "In Asian coun-tries, there is always a lot of people in a small area which has created the perception that property prices can only go up. When they buy Australian prop-erty, many of my clients expect to double their money the way that they did in Asia."

Both Wu and Poon say the concept of buying into managed funds is a difficult one for their clients mainly because these supervision and performance of these funds in Asia hasn't been that good.

"Even I would not put money in managed funds there," Poon says.

"Compared to the average Australian, my Hong Kong clients need much more control over their affairs. And, they don't like my detailed reports that much. They just want a simple figure of how their finances stand," he adds.

For South Africans the first shock is the poor exchange rate they get for their dwindling Rand.

"Many South Africans want to set up or buy a business. Financial planners plan for the long term, but these clients really need a short term cash management-type account," Ginsburg says.

He adds that it is much more difficult to insure migrants properly. "The major-ity of insurance companies don't want to insure people until they have an income history in Australia. And, most migrants don't bring enough proof of their prior earnings."

For British immigrants, a common concern is whether to transfer their pensions to Australia and how to do this most tax effectively, says David Ford, general manager of Pension Transfer Direct.

They also have to get used to slight differences in the financial system, like spouses not being able to have joint life insurance policies here, he says.

Most financial planners dealing in the migrant market add that their clients find the Australian regulatory systems highly complex.

"A lot of immigrants are flabbergasted at how convoluted the tax system is here," notes Ginsburg.

But, while migrants may initially be a difficult target market, advisers say it improves over time as the newcomers settle, wizen up to the ways of Australia and start planning for the long term.

"There isn't always much money to be earned from them in the beginning. But, on the whole, immigrants are usually successful and they eventually become a good market," Ginsburg says.

Most financial planners in this market are also immigrants, usually dealing with clients from the countries they originate from. But each seems to have a differ-ent way of attracting new clients.

Ginsburg, for example, had a large insurance brokerage in South Africa, which still refers people to him.

Wu has a high profile in the Chinese community. His regular newspaper columns, the books he has written and the radio show he hosts attracts an endless stream of clients to his door.

Hatch is the convenor of the Australian Business Migration Network in NSW while Ford advertises in newspapers, attends migration seminars in Britain and runs a series of seminars.

Most, however, also rely heavily on referrals. Mant, for one, has built up his thriving Italian and Maltese client base purely by word of mouth.