NAIFA’s new report, “Finding Success in Diverse Markets,” examines the diverse communities that are rapidly changing the face of America and offers critical insights to insurance and financial advisors for successful engagement. The report is sponsored by The Penn Mutual Life Insurance Company, an organization that recognizes the opportunities that lie ahead for advisors serving diverse markets.
The report contains insights and analysis by Aamir Chalisa, MBA, LUTCF, on serving South Asian, Hispanic, African American and women’s markets; Irma Quinones, CLTC, CLU, ChFC, LUTCF, on her work with Hispanic clients; NAIFA Past-President Juli McNeely, CFP, LUTCF, CLU, on her work with women clients; Ronco Johnson, LUTCF, on serving African American clients; Toni Harris on cultivating the African American market; and Jennifer Marie Long on her work serving the LGBT community.
Introduction: The Changing Face of the American Consumer
Now more than ever, you need to learn how to grow your business in a marketplace that is changing rapidly and becoming increasingly diverse. According to the U.S. Census Bureau, between 2013 and 2050, the Asian population is expected to increase by 115 percent to 34.3 million – more than four times the projected national growth rate over the period. The Hispanic population is projected to grow at a slightly lower rate, at 88 percent, with a 2050 population of 101 million. The African-American population would continue with the slowest growth of ethnic minorities. But even with this relatively slow growth, the African American population will still grow faster than the Non-Hispanic White population, which is expected to decline by five percent.
This rapid growth, NAIFA’s Advisor 20/20 writes, “will transform the United States into a minority-majority country. Second-generation immigrants will become a large part of the advisor ranks and potential clients as they increasingly enter the workforce, start families and look to build their wealth.”
What is more, these consumers have a great deal of buying power, with current estimates indicating that they spend more than $2 billion annually. And what is of special interest to you as an advisor is that quite a few of them represent what you are looking for in an ideal client: They are highly educated, have some disposable income, and are very interested in taking steps to secure their financial future.
Another group that represents a good business opportunity for you is the group that is made up of women, especially independent or so-called “breadwinner” women. As Advisor 2020 aptly points out, “a key opportunity for advisors looking to expand their practices will be connecting with the growing market of socially mobile and independent women. Although women are contributing an increasing share to the family income and making more and more of the financial decisions for their households, they continue to be less likely to have life insurance or to have less total coverage than men. This constitutes a growing and undeserved market for advisors.”
Adding to this mix of consumers are members of the Modern Family, including lesbian, gay, bi-sexual and Transgender (LGBT) Americans. This group is growing rapidly, as well, with a wide range of financial needs and concerns that need to be addressed. Tapping into these concerns and offering them the financial products and services they need will help them protect and grow their assets while offering you opportunities to enhance the financial performance of your practice.
But developing and servicing a new market base take time–and a willingness to learn about groups that may be different from your own and then create strategies that will help you reach those markets and offer them the products they so desperately need. Even if you belong to the same ethnic group as people in your target market, you most likely are in need of information on how to reach them, how to sell to them successfully, and how to retain them as lifelong clients.
To help you with these critical tasks, we have put together this Diversity Report. It profiles NAIFA members who have found great success in working in diverse markets, together with lessons learned along the way. It also provides useful information on multicultural practices and preferences, Facts and Figures about various groups, and tried-and-true methods for achieving success. The goal is to start you off with the tools and resources you need to at least explore the idea of working in diverse markets.
As most of you know, one of the best ways to grow a financial practice is to go “outside the box” and pursue markets that you have not considered before—especially as your search for highly qualified clients intensifies in a business environment that is becoming highly competitive. This report shows you how some forward-thinking advisors are achieving great success by transitioning into new markets and offers critical insights on what you need to know to create your own success.