sun-life-canadas-emerging-markets

The first article in this ‘emerging markets’ series explored the Chinese market and our second article, the Filipino market. In this third article in the series, we focus on the Arab market.

The Arab community in Canada comes from many different countries (such as Lebanon, Egypt, Morocco, Algeria and many others) and religious backgrounds, including Muslim and Christian faiths.1 This diversity means that clients from within this community can significantly differ in their views on financial products and planning, making it difficult to recognize similarities in this emerging market.

This is something Saïda Ghayati, Associate Manager for one of Sun Life Financial’s financial centres in Laval, Quebec, is very aware of. She began her career as an advisor more than 15 years ago and worked with many clients from this emerging market before becoming an associate manager 7 years ago. She now helps advisors understand and effectively work with this market. “This community is divided when it comes to how they perceive the products and services we offer, so it’s important to understand each client,” she says. In her experience, avoiding debt is high on the list of priorities for many of these clients. Also high on the list: buying a vacation home in their native land for their retirement. For many, this goal is the main focus of their retirement planning. “I’ve found this to be the case even for those who have been in Canada for a very long time,” she says. “Often, they still have family in their country of origin and want to spend time with them in retirement.”

Arabs are the sixth largest visible minority group in Canada.2 Statistics Canada estimates that between 2006 and 2031, this group could be one of the fastest growing minority groups in the country.3

When working with clients to help them achieve these goals, advisors have to be mindful of what products some clients may or may not be willing to consider. It’s important to know that religion has a significant influence in this market. “Many Muslim clients, for example, won’t consider interest-bearing investment products but will consider market-based products. This is because investing in a product with guaranteed interest isn’t allowed according to their religious beliefs,” she explains. Tax-Free Savings Accounts (TFSAs), for example, tend to be popular, more so than registered retirement savings plans because withdrawals are tax free. “This is appealing for clients who don’t know if they’ll be living here or abroad in retirement” she says.

Religious beliefs also come into play when considering insurance. In Ghayati’s experience, “Many Muslim clients won’t consider life insurance and those that do, do so only to make sure they leave no debts behind to burden their family with.” Ghayati suggests exploring health coverage with these clients. “They’re much more open to a conversation about health protection,” she says, “especially critical illness insurance, in my experience.” She adds that it’s good to keep in mind some clients may need to consult with a religious leader before making a decision on a product.

A RELATIVELY YOUNG POPULATION

In general, the visible minority population is younger than the overall population in Canada. Arabs are the second youngest visible minority group with a median age of 30.2.4

THE BOTTOM LINE

“Find out what a client’s beliefs are in relation to the products and services we offer as advisors. Some clients believe in financial planning more than others,” Ghayati says. “Some will consider certain products and some won’t.” The bottom line? To provide valued, effective advice, get to know and understand your clients.

To help start conversations with clients about building and protecting their savings, protecting their families, covering future health needs, and planning for retirement, use the Money for Life whiteboard videos from Sun Life Financial. To learn more about these and other available resources, talk with a Sun Life Sales Director.

According to the 2011 National Household Survey:

  • 94.8% of Canada’s foreign-born population lived in Ontario, British Columbia, Quebec and Alberta in 2011. Most were living in Canada’s largest urban centres.
  • Arabs are the second largest visible minority group in Montreal.5

1 Colin Lindsay, 2007, The Arab Community in Canada, Statistics Canada Catalogue no. 89-621-X2007009. Profiles of Ethnic Communities in Canada, no 9.

2 Statistics Canada, 2013, Visible Minority (15), Immigrant Status and Period of Immigration (11), Age Groups (10) and Sex (3) for the Population in Private Households of Canada, Provinces, Territories, Census Metropolitan Areas and Census Agglomerations, 2011 National Household Survey (table). Statistics Canada Catalogue no. 99-010-X2011030. Last updated March 4, 2014.

3 Éric Caron Malenfant, André Lebel and Laurent Martel, 2010, Projections of the Diversity of the Canadian Population, 2006 to 2031, Statistics Canada Catalogue no. 91-551. Last updated March 9, 2010.

4 Statistics Canada, 2013, Immigration and Ethnocultural Diversity in Canada, Statistics Canada Catalogue no. 99-010-X2011001. Ottawa, Ontario. 2011 National Household Survey. Last updated January 14, 2014.

5 Ibid.

Originally published on Advisor.ca