Asian-Americans have surpassed Hispanics as the largest immigrant group in the U.S., and their affluence and high levels of income make them a coveted, though challenging, target market for financial advisors.
A comprehensive new study (titled “The Rise of Asian Americans”) by Pew Research shows Asian-Americans represent 36% of new arrivals to the U.S. from 2000 to 2010, overtaking Americans of Hispanic origin, who make up 31% of the nation’s immigrant population.
The nearly 6% of the population (18.2 million Americans) of Asian origin have diverse backgrounds, with most coming from China, the Phillipines and India, but with significant streams from Vietnam, Korea, Japan and other countries.
Despite these disparate origins, the Pew survey found that Asians in general place a very high value on marriage, parenting, education and work, all of which are associated with wealth. And indeed, the median annual household of Asian-Americans is $66,000, far higher than the U.S. average of $49,800, and all the more of an accomplishment given that the vast majority of Asian-Americans are first-generation immigrants; (74% of Asian-American adults are foreign-born).
This relative affluence, together with the fact that Asian-Americans, perhaps because of their immigrant status, are underserved by financial advisors (less than two-thirds of affluent Asian-Americans use advisors, according to research by Tiburon Strategic Advisors), should, in theory, yield a potentially significant market advantage to advisors who understand this population.
Eve Kaplan, a fee-only certified financial planner in Berkeley Heights, N.J., knows more about Asian-Americans than most, and cautions there are profound cultural barriers against attracting them as clients.
Kaplan, who says she spent something like half her life immersed in Asian culture, through work, travel and study, says the first critical thing to know is that the term Asian-American “is an almost impossibly broad category. Indian-Americans are completely different from Chinese Americans.”