I am often asked by financial advisors how they can more effectively prospect in niche multicultural markets. Not only do markets such as Hispanic, African American or LGBT crave more targeted support to help them protect and grow their finances and retirement savings, but these markets are also a growing force in American society. As a result, more financial advisors are interested in finding inroads into multicultural markets. The problem is that they often don’t know how to get started.
It is a common mistake to stereotype and assume that one size fits all when it comes to a specific multicultural market. The truth is that there are many differences and nuances within each multicultural market. This is partly why succeeding in a niche market is easier said than done. While it takes time and energy to understand varying cultural norms and values, gaining that insight can make a huge difference in your ability to succeed. You need to immerse yourself in the culture and be genuinely interested in the market’s specific needs and concerns.
There are a number of steps you can take to help grow your business in multicultural markets. In the end, it’s all about building connections and trust with individuals. Always keep that end goal top of mind.
First, fish where your prospective market swims. Find the right avenues and places that will bring you to the niche market. As an example, if you are interested in prospecting in the Hispanic small business owner market, seek out a local Hispanic Chamber of Commerce. There are over 200 of these organizations in the country and they bring together Hispanic business owners on a regular basis to discuss best practice, explore business opportunities and learn from each other. This is just one example of how you can make sure you are fishing in the right ponds.
Working with multicultural partners, whether they are local ethnic distributors or organizations that cater to a particular group, is another way to be in the right place to take advantage of opportunities. If you partner with distributors who understand and are active in serving multicultural markets, doors will likely open to you.
Second, connect with their core values. Sensitivity to different cultural nuances can go a long way when you are trying to establish connections. This is not about stereotyping or pigeonholing individuals, but about staying attuned to different cultural values. As an example, Hispanic culture places family as a top priority. This is important to know as you head into a meeting with a prospective Hispanic client. Focusing on how retirement savings and insurance are able to help build a family’s financial security and wellbeing may resonate more powerfully. In addition, Hispanic culture has an old-world formality that is different from American culture. Etiquette and manners are held in high regard. So, in general, be mindful of different cultural values that impact how a prospective client is going to view you. You want to instill trust, not discomfort.
Third, educate multicultural clients about combining their retirement savings and financial protection strategy. Most people understand the value of life insurance for family protection, but don’t see how it can complement their retirement saving. This is a helpful connection for you to make when talking to anyone, but particularly with multicultural prospective clients. Misconceptions about life insurance within the Hispanic community or other niche markets — such as thinking they don’t need coverage or the cost is too much — can shut down opportunities for you. In addition, not many people wake up in the morning and decide that today they are going to buy life insurance. To combat this challenge, new product innovations are combining death benefit protection with retirement accumulation features by packaging together term and cash value insurance policies. If you approach prospective multicultural clients with a concept that marries two key financial goals — protecting their family and putting money away to grow supplemental retirement income — you can broaden the conversation to be a holistic financial planning discussion and become a more valued partner. Why is this particularly important for multicultural markets? Retirement readiness is a pressing need for Hispanics and African Americans. These groups are behind on retirement savings and have less confidence in their retirement security, according to a 2011 ING U.S. multicultural study.
Success in growing your multicultural business isn’t necessarily harder than traditional sales, but it does require a significant shift in mindset and behavior that is highly attuned to cultural differences and nuances.