Being Muslim in post 9/11 America hasn’t been easy and Monem Salam, director and VP of Islamic investing at Saturna Capital in Bellingham, Wash., knows that as well as anyone else.
But even as he agrees that it’s probably easier said than done, he still urges financial advisors to set aside any fears of misgivings they might have and take a long, hard look at the American Muslim community for the great business potential that it offers.
“The American Muslim community is very educated and very affluent, and they are looking for investment solutions,” Salam says. “Many times, they do not know that they can use an advisor to find these solutions. Advisors need to make an effort to not only try and better understand their existing Muslim clientele, but to also look into this market if they don’t really have any Muslim clients on their roster.”
What do advisors need to know about the American Muslim community? First and foremost, Salam says, most Muslims are likely to want to invest in Sharia-compliant investment vehicles, so advisors need to not only understand the essence of Sharia principles, they also need to look for investment options like Saturna’s Amana Funds (which Salam helps manage) that respect these. The Amana Funds – there are three, the Amana Growth Fund, the Amana Income Fund and the Amana Developing World Fund – all invest according to Islamic principles, principles that require that investors avoid interest payments and investments in businesses such as liquor, pornography, gambling, and banks. The funds also avoid bonds and other fixed-income securities and seek protection against inflation by making long-term equity investments.
Sharia finance is not particularly complex, Salam says, but it is imperative that financial advisors looking to acquire a Muslim clientele understand it fully so as to be able to offer these investment options to these clients – not least, he says, because many Muslims do not even know that Sharia-compliant investment options are available in the U.S.
Salam also wants advisors to understand that the American-Muslim community is not homogenous.
“We’re talking South Asian doctors, Arab business owners and African-Americans with significant assets in their 401(k)s,” Salam says. “Each subset is different from the other and advisors need to understand their cultural nuances and work with them.”
But even before mastering the tenets of Sharia-compliant investing or figuring out the differences between different American-Muslim communities, Salam believes that advisors need to make a concerted effort to simply transgress any mental barriers they might have with respect to Muslims. “Advisors are never going to penetrate this market unless they really make an effort,” he says. “They need to educate themselves about Muslims, they need to do things like go visit a mosque, even if people tell them otherwise.
While it might seem that people are closed off initially, I do think that if they show patience and commitment, there is huge potential out there for advisors.”
Salam is the author of a book entitled “A Muslim’s Guide to Investing & Personal Finance,” which, he says, makes for a good tool for both advisors and their Muslim clients. He was also the subject of a 2008 documentary entitled “On a Wing and a Prayer,” that chronicled the difficulties he faced after 9/11 in trying to follow his passion of learning how to fly a plane (Salam’s father was a pilot for a Pakistani commercial airliner).