Can you see JP Morgan Chase employees holding CEO Jamie Dimon hostage to protest layoffs? Or hear suburban parents saying to their kids, “Too bad your college savings plan tanked, but that’s the way the cookie crumbles”? Probably not. But in other cultures, reactions to the recent months of economic upheaval and change might not be what you’d expect. In fact, the intensity of people’s responses may well be influenced on deep and subtle levels by their ethnic and cultural backgrounds.
How so? Well, there’s a good chance our reactions would be different if our culture practiced an attitude of submission to fate. Think of the rigid restrictions on people born in certain Indian castes, as well as phrases such as que ser?, ser?; inshallah, and si Dios quiere, all variations on “The future is out of our hands.”
In some other cultures, a reverse may produce rebellion and fury. In France this often takes the form of mass strikes, attacks on cars and stores, holding bosses hostage, and demonstrations that bring out the riot police. More progressive ex-employees in Argentina have taken over the companies that fired them and transformed them into worker-run cooperatives.
Here in the U.S., people are reacting to the economic turmoil largely by adopting behavior that lets them keep slogging toward their goals. Granted, there’s some resignation and anger, but many of us have responded by reducing spending, getting another job, or postponing retirement.
To keep the current crisis from weakening your bonds with your clients, you need to tune into their beliefs and fears at the deepest level. Here are some situations where this understanding can be crucial in helping clients from other cultural and ethnic backgrounds weather the storm.
Q: After the market crash, my clients pulled in their horns and stopped spending. They emigrated from Japan about 20 years ago and have always been savers, but now they’re putting aside more than 40% of their income. They’d like me to explain to their two teenage children, who are upset about not having much spending money, why saving should be paramount right now. Personally, I feel the parents are overreacting. How should I handle this?
A: The Japanese have traditionally been enormous savers. In fact, hoarding money is believed to have deepened the economic crisis in Japan, since so little was being exchanged to buy goods and services. Intensifying this behavior is a cultural belief in gaman: toughing it out, persevering, sacrificing for a higher good.
I would acknowledge the power of these messages with your Japanese clients. Show them that you understand the wisdom and benefits of saving money, especially in hard times. Once they feel comfortable that you respect their feelings and their behavior, you may be able to help them see things from the viewpoint of their children.
Try to educate the parents on the virtues of moderation in all things, including saving as well as spending. Tell them that as an experienced financial professional, you have seen clients go overboard in a way that strains family relationships more than it benefits them.
Just remember that cultural messages and behaviors run deep, and overcoming them will require attentive listening and patience on your part.
Q: I’ve been working for three years with a young black client who was brought up not to trust the stock market. Starting with REITs, I encouraged him to move into a total market index fund and an actively managed large cap fund with a fine track record. When things went south last fall, he panicked and told me to sell everything. Since his goal is to build wealth, I’ve talked with him about venturing back into the market, but he’s dragging his feet. Any ideas to help me overcome his anxiety?
A: As you observed, African-Americans have traditionally distrusted stocks and invested in various forms of real estate instead. The market crash, along with the Wall Street scandals and frauds that have come to light, seemingly validated this wariness. In fact, I wager that many others from a variety of backgrounds have joined them on the sidelines of the stock market.
There’s no quick fix for this client. Begin by listening to his fear, distrust, and anger, and affirming aspects of his commentary that you think make sense from his perspective. For example, you might say, “I understand why land has always felt safer to you. It’s something you can see and touch, while investing in the stock market may feel more nebulous and unreal.”
Once he feels understood, gradually educate him on what he might gain from putting his toe back into the market. You might suggest that he invest a small “bucket” of savings as an experiment, without risking the majority of his capital.
Remember to take it slow. No amount of rational explanation will override the power of your client’s fears and his old, deeply held beliefs–not until the stressful bear market is over, at any rate. But if you listen and respond to him carefully and with respect, you may be able to nudge him toward stocks again, at least in a limited way.