Marketing To Asian-Americans: Tailor Your Approach To The Generation

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There are more differences within the Asian-American community than the country individuals come from and the language they speak.

Some are recent immigrants who cling to their native language and culture. By and large, they tend to be interested in nonfluctuating products with guarantees, like life insurance and fixed annuities.

Others are American-born children of immigrants who tend to be highly educated and earn high incomes. Many have cashed their shares of initial public offerings from the dot-com boom and are now looking toward forming estate trusts and buying financial planning services, says Christine Young, a New York Life agent who works in the San Francisco office.

“Newly arrived immigrants want security but dont have much spare money, so we focus on life insurance and other protection products, like retirement products,” Young says. Theyre “very popular in the Asian-American market because of the savings concept.”

Andi Kang, a certified financial planner in Huntington Beach, Calif., agrees that many Asian-American clients are conservative. In fact, when they first meet with Kang, most of her clients have their assets either in real estate or cash.

“We talk about how to diversify their investments outside of real estate,” Kang says. “Depending on interest rates, we may go into fixed annuities. First, we talk about diversification and looking at their investments and looking at what to do with the excess cash theyve saved over time.

“Older Asians are very cautious when it comes to the stock market,” she says.

Not so with second-generation Asian-Americans, says Young. Often, theyve built up assets in this country. They usually own a house, other investments or stock. New York Life typically sells financial planning services to this segment, she says.

Having worked with this segment for more than 20 years, Young sees first-hand the differences between the generations. Her new immigrant clients owned mom-and-pop businesses. Theirs is a more typically Asian sensibility, with a focus on earning money, and saving and protecting that money. Now shes handling their children who tend to be high-net-worth clients.

The second generation has a more typically American sensibility. They dont fear the fluctuations of the stock market and are more willing from the initial meeting to do more with their assets than their parents might be, according to Young.

Long term care insurance is a useful tool for gauging the difference in perspective between the generations. It is not yet popular among new immigrants, she says.

“The Asian reaction is slower because they are conservative,” Young says. “They wait for the product to mature before they buy.”

But, individuals in the second generation do tend to be interested in long term care insurance, she says. Successful positioning of the product often includes suggesting it can help ones parents receive care at home, should it be needed.

Measuring the levels of Asian and American sensibilities can be a way of tailoring the sales presentation to this segment, but it should not influence the products the planner selects for recommendation, says Steven Kagawa, president, The Pacific Bridge Companies, Monrovia, Calif.

Kagawas clients are mainly Japanese. He concedes there are cultural differences that impact typical Japanese and American reasoning. Japanese tend to be very conservative, whereas Americans are more bullish and “hate it when the market goes south,” he says.

“But the bottom line is that the principles of financial planning remain the same–the message needs to be conveyed differently, but the overall bottom line is the same.”

In fact, his clients tend to be very interested in different American products, once the benefits are clearly explained.

“We focus on delivering it culturally correctly, so the principles can be understood,” Kagawa says. “It means a different presentation than a typical American one.”

Sally Chung, management associate with the Navarro Agency, Chicago, a unit of Penn Mutual Life Insurance Company, Philadelphia, echoes this sentiment.

Her Asian-American clients, mainly Korean, tend to be conservative as well. But that does not mean they will not entertain buying products they might not at first deem “safe,” once theyve been clearly explained.

“Mostly I have to educate them first and help them conceptualize what they want to do as far as products are concerned,” Chung says. “I have to talk about risk.”

Products like variable universal life insurance and annuities can help Asian-Americans reach their goals, mainly college education and retirement, Chung says. Usually, they are wary of buying products that involve equities. But once all the benefits and charges involved are explained, they become much more willing to try new things.

Estate planning is an area where Chung feels the Korean-American market is highly underserved. In the next decade, the first generation is going to transfer “huge wealth,” to their children, without much education about the wealth transfer process in the United States.

“They need education about tax liabilities,” she says. “They dont even know that without citizenship they forfeit rights to their wealth; in Korea its easy to transfer wealth.

“I think theres really opportunity there; they work so hard, they accumulate it, but they dont know how to preserve it or invest it,” Chung says.

Understanding American financial services products and how they can help them achieve their goals is paramount to Kayoko Niheis clients. An investment advisor rep with Pacific Bridge, Niheis clients are mainly Japanese businessmen who either have a family in the United States and plan to stay here, or who plan to go back to Japan in a few years.

Nihei says her clients are most interested in life insurance. Although many already have life insurance policies in Japan, Nihei encourages them to buy an American policy because they can be much less expensive, more flexible and offer more choices than the basic Japanese policy.

In Japan, life insurance comes in one-size-only and is sold in packages with riders already built in. The underwriting is the same for everyone, so everyone basically buys the same thing, Nihei says. In other words, premiums are the same for smokers and nonsmokers alike.

Because underwriting is much less intrusive than it can be in the United States, Japanese are unaccustomed to a financial planner asking personal questions, she says.

So, when she first meets with a client, she focuses on developing rapport and even a friendship. Once shes gained their trust, she then asks the sensitive questions, like how much money they have in their bank accounts. Although this information is necessary for a financial planner to serve her clients well, it can be very uncomfortable for Japanese clients because there is no such role as a financial planner in Japan.

“If I just start asking questions immediately, they may not answer. Theyre not used to that type of financial planning,” Nihei says. In Japan “they sell the same product to everybody. Here we have to do fact-finding, and Japanese are not used to that.”


Reproduced from National Underwriter Edition, April 21, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.