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The intent of this piece is not to encourage segregation of clients along ethnic or racial lines, but rather to highlight the need for advisors and the opportunity for financial professionals within a specific group.
To be sure, those needs and opportunities are present across a variety of groups and the more finely a demographic is sliced, the more apparent those opportunities. That’s certainly true of the Asian American Pacific Islander (AAPI) community, which is highly diverse in geographic terms.
According to National Geographic, AAPI nations include the following: Afghanistan, Armenia, Azerbaijan, Bahrain, Bangladesh, Bhutan, Cambodia, China, Georgia, India, Indonesia, Iran, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Lebanon, Malaysia, Maldives, Mongolia, Myanmar (Burma), Nepal, North Korea, Oman, Pakistan, Philippines, Qatar, Russia (parts in Europe and Asia), Saudi Arabia, Singapore, South Korea, Sri Lanka, Syria, Tajikistan, Thailand, Timor-Leste (East Timor), Turkey (parts in Europe and Asia), Turkmenistan, United Arab Emirates (UAE), Uzbekistan, Vietnam, and Yemen.
That’s a lot of countries and the implication is that, for example, a Korean-American might have different financials than say their Lebanese counterpart, but both could be well-served by working with advisors.
Demographic Trends Matter
Smart advisors acknowledge and embrace demographic trends, realizing that with each there’s opportunity and that’s certainly true of the AAPI community.
“In the U.S., the AAPI community has almost doubled in size over the past two decades, from 11.9 million in 2000 to over 24 million in 2021,” notes Mary Mannion of J.P. Morgan Wealth Management. “A diverse community in terms of income, ethnicity, language and education, by 2060, that number is expected to climb to 46 million.”
Advisors should also note that of the 24 million AAPI people currently living in the U.S., 80% are either Chinese, Filipino, Indian, Japanese, Korean and Vietnamese, meaning attitudes and trends within those segments need to examined and should not be considered uniform across all of those groups.
“56% of AAPI respondents said they felt confident, compared to the nearly equivalent 55% of the general market,” adds Mannion. “When broken down further, however, Filipino and Korean participants reported feeling less confident, at 49% and 35%, respectively. In contrast, Other Asian and Indian respondents felt markedly more confident about their retirement savings plans than the general market and the average Asian respondent, at 63% and 68%, respectively.”
Point is the AAPI community is highly diverse and far from monolithic. However…
AAPI Have Similar Goals, Concerns
This might sound contradictory to what’s outlined above, but too often our society looks at things through a racial lens. It’s naïve, but in a more perfect, people would be viewed as, well, people. There’s a lesson there for advisors and it’s that the goals and fears found among AAPI investors are the same as what advisors see with clients of other backgrounds.
For example, many AAPI are worried they’re not a contributing enough to employer-sponsored retirement plans and, according to J.P. Morgan, 71% prefer being self-directed investors. Both spell opportunity for advisors as does the following.
“Survey respondents made it clear that they do not find their current information sources to be helpful. Educational resources such as investing 101, investing strategy and market analyses content can aid in helping AAPI investors feel confident that their retirement plans are sound,” concludes Mannion.
Related: Why Cash, Money Markets Make Sense for Some Investors