Written by: Catherine McBreen | Spectrem Group
One of America’s strengths has always been its wide variety of cultures stemming from the many large populations of citizens with different and unique ethnic backgrounds. Those cultural differences reveal themselves in a variety of ways, including diet and food choices, religious beliefs, family dynamics and, of course, attitudes towards money and wealth. Spectrem’s study on the differences in investment attitudes and behaviors based on ethnicity reveals those investment choices which indicate significant differences in investors based on their ethnicity. In segmenting investors who are White, Black, Asian or Hispanic, Ethnic Influences on Investment Decisions allows advisors to have a greater understanding of their clients for whom ethnic culture plays a large role in their lives. Americans with a strong Asian background have numerous cultural influences which play a role in their investment decisions. Strong family connections are probably one factor, and it is likely that Asian investors consider both the opinions of their elders and the financial needs of their elders when making investment choices.
Here are a few of the findings of the Spectrem study related to the unique nature of investment attitudes and behaviors among Asian clients:
- This is not surprising, but it is revealing – 28 percent of all Asian investors with a net worth over $100,000 are employed in the information technology field. This makes them likely to be both interested and informed regarding technology companies as potential investment selections.
- Asians are the youngest ethnic group on average, and it is often the case that younger investors are the least likely to use a financial advisor. That is true of the Asian investors surveyed in the study, and of those who do not use an advisor, many of them believe they can do a better job of investing than a professional advisor.
- Another trait of younger investors shows up among Asian investors – 33 percent self-describe as either aggressive or most aggressive in terms of risk tolerance.
- Perhaps because of the attitude Asian families have regarding personal respect, Asian investors are the most demanding of their financial advisor providing swift contact when queries are sent via telephone or email.