As financial planners and advice practices evolve and adapt to service the increasingly diverse and multicultural needs of Australians, three CFP® professionals share their insights on how their businesses are responding. Jayson Forrest reports.

Australia has a rich history of cultural diversity. Home to approximately 26 million residents, one-third (33.3 per cent) of us were born overseas, with more than 1-in-3 speaking a language other than English. We are an island nation of more than 250 nationalities.

But statistics aside, cultural diversity hasn’t come without its challenges, particularly when you factor in other aspects of diversity – such as gender, age, sexuality, ethnicity, religion, and disability – which all bring unique sets of challenges, particularly with respect to the financial needs of Australians.

No longer can professionals deliver templated or ‘cookie cutter’ advice. Consumer expectations have changed, as they increasingly expect their diverse and highly personalised needs to be reflected in their financial planning advice.

It’s a view supported by Dawn Thomas CFP^® – a Private Wealth Adviser at Integro.

“One of the beautiful things we are currently seeing with financial planners is their increasing confidence with their own style and versions of advice,” says Dawn. “This is allowing clients to see a much broader range of different types of planners they can connect with, providing clients with the ability to find a practitioner who best suits them and their individual needs.”

Dawn believes financial advice is at its best when a planner and client can connect with each other on a personal and professional level.

“So, as more planners becoming loud and proud about who they are and how they differ from their peers, they will be able to find those cohorts of clients who have been reluctant to seek advice because they haven’t been understood before.”

Multicultural challenges

For Hari Maragos CFP^® – Principal and Senior Financial Adviser at Victoria Wealth Management – the extent to which the profession is adapting to service the increasingly diverse needs of Australians is a topic he has long thought about, and one that he feels the profession has yet to fully address.

“People tend to think about diversity and equality from a gender perspective only. But what we forget is that Australia has been a cultural melting pot for 80 years. One of the great things about Australia is its multicultural diversity. But when it comes to financial planning, clients with a multicultural background, where English is their second language (if at all), I feel these clients are unconsciously being excluded from the advice process,” says Hari.

“As a profession, we have been very one-dimensional in the provision of advice, particularly for clients with different cultural backgrounds. That’s because information, whether it’s an SOA or a PDS, is delivered in English to satisfy compliance and governance requirements. But what happens if your understanding of English isn’t good?”

Hari admits that when he deals with some of his clients, he might speak with them in Greek and record the conversation. However, in doing so, he acknowledges there are compliance and governance issues. How does his compliance team know that what he is saying to clients in Greek is appropriate and correct for them?

“But when a person from a multicultural background sees a lawyer, one of the first things the lawyer will ask is whether they need an interpreter. However, the financial planning profession has never insisted on having an independent interpreter in these types of client meetings. Instead, we rely on family and friends to interpret. This raises the issue of informed consent,” says Hari.

He explains: “Even with an interpreter, languages have their nuances, which are often lost in translation. So, how can we know what the client’s goals and objectives are if we haven’t achieved informed consent? It’s our responsibility, as financial planners, to be able to explain things to clients in a way they fully understand. I believe this is a challenge the profession needs to address.”

Inclusivity in the advice process

Working within a culturally diverse society amplifies the need for financial inclusivity in the advice process. Dawn is adamant that no group in society can be underestimated or marginalised in seeking advice. As an advocate of women, she highlights single women in retirement as being the fastest growing demographic of poverty and homelessness in society.

“Women are particularly vulnerable at retirement. Worryingly, one woman is killed every week in Australia as a result of partner violence. And economic abuse is a common component of domestic abuse situations, which can limit a woman’s ability to leave an abusive relationship,” says Dawn.

And while the profession’s Code of Ethics requires all financial planners to consider the broader impact of a client’s circumstances, Dawn concedes it can become a tricky undertaking when one of the clients in a couple feels intimidated to speak freely in the presence of their partner.

“That’s where a planner’s skillset comes to the fore. You need to pick up on body cues. So, if you’re not able to get the information you need from the client or are not satisfied by the quality of the information you are receiving, then you shouldn’t hesitate to meet with the client separately,” she says.

“Of course, if we feel that we cannot get both clients’ input or participation into the advice process, then we inform them that we cannot do the advice on behalf of them both. It can be a delicate conversation to have, as you don’t want to cross a barrier with a client that’s too personal for them. But we need our clients to be transparent with us.”

Dawn acknowledges this is an aspect of financial planning she is still learning to master.

However, when discussing financial inclusivity from a multicultural perspective, Hari questions the “cultural competency” of planners. He refers to FASEA Standard 10 which imposes, as an ethical duty, a requirement by planners to develop and maintain a high level of relevant knowledge and skills.

“As professionals, we have the technical knowledge, but do we have the cultural knowledge and awareness to be able to communicate with clients?”

He references research from Monash University, which has verified that questioning techniques used by lawyers and doctors have their roots set in 800 years of Anglo-Western culture. These questioning techniques ignore cultural diversity, language barriers, ethnicity and religious differences.

“This means that unless you can fluently speak and understand the nuances of your client’s language, what your client is actually telling you can be misinterpreted or lost in translation. So, how can we, as financial planners, ensure we have reached informed consent?” asks Hari.

Diversity and financial wellbeing

Getting an increasingly diverse client base to engage with their financial wellbeing is challenging, with financial literacy the key to overcoming this hurdle, says Sheila Cabacungan CFP^® – Principal Financial Planner and Owner of Wealth Forum.

For Sheila, financial wellbeing is all about accessibility to affordable advice and improved financial literacy. She questions why a person in this country spends more time learning how to drive a car than on how to budget and save.

Dawn agrees: “People often feel they are not financially savvy, so they automatically switch off to anything financial. Just look at superannuation, which is quite complex. Even the Productivity Commission has reported that many Australians have disengaged with their super.”

However, Dawn believes a strength of financial planners is their communication skills. This means adapting their way and style of communicating to individual clients. For example, when Dawn conducts presentations for women, she does this in a ‘safe’ environment, where there are no silly questions or prejudgments made.

“You need to be able to communicate to clients in a way that is digestible for them. Even if a client understands one or two points you’re making, they feel empowered and more confident about learning more. That’s really important,” she says. “I love seeing those lightbulb moments when you really connect with someone, and they feel they have understood something they previously didn’t think they were capable of understanding.”

As a profession, Dawn believes we are guilty of leaning too heavily on traditional ways of communication through PowerPoint presentations, complex charts and data filled tables. “I think we’re guilty of not necessarily considering the person in front of us who might need that information conveyed to them differently.”

It’s a view supported by Sheila. “Financial literacy is a life skill. The world revolves around money. Consumers need to know how the world works and their place in it. However, with the rise in inflation and interest rates, regrettably, houses are going to be put up for sale. That’s because too many consumers don’t know how to deal with a rising inflationary and interest rate environment.

“As financial planners, we can demonstrate the value of advice through financial literacy. It’s about helping Australians to save, budget, and spend within their financial means.”

As an advocate of cultural respect and inclusion, Hari admits that it can be challenging to get a culturally diverse client base engaged with their financial wellbeing. However, he believes the key is overcoming language and cultural barriers.

“There is a lot of information available in the marketplace about building wealth. The problem is, that information is in English,” he says. “Perhaps there needs to be a discussion about having all that information translated into the languages that make up today’s modern Australia. This would mean financial planning could reach a greater proportion of the Australian population, who might currently be disengaged because of language and culture.”

Adapting to change

When working with its diverse client base, Perth-based Integro uses a ‘who-is-the-best-planner-for-the-client’ approach. This means it’s not uncommon for two planners to attend a client meeting to determine which planner is best suited to the client or whether, in fact, both planners are needed.

“We have a very flexible approach to our planner/client relationships at Integro,” says Dawn. “Clients know they could be dealing with one or more planners as part of the relationship. It also provides the business with the opportunity to see which practitioner fits more comfortably with the client. We never hesitate to pass on a client to a colleague within the business who is better suited for that particular client.”

Dawn is delighted to see this planner/client matchmaking approach increasingly happening across the wider profession. She cites three external planners who have referred clients to her over the last 12 months, because they felt she was better suited to their clients’ personality and specific needs.

At Wealth Forum, Sheila has expanded her skillsets to accommodate the increasingly diverse needs of her clients.

“The technical skill of being a financial planner now comes with a lot more behavioural finance and people skills,” she says. “The six-step financial planning process is only part of what I do now. Instead, it’s more about the behavioural side of financial planning – like financial counselling and life coaching – that I’m spending more of my time working with clients on.”

Adding to her string of qualifications, Sheila has completed a mental heath qualification. She did so to enable her to better deal with distressed clients during the COVID pandemic.

“Throughout COVID, many of my clients couldn’t make good decisions about their money without first dealing with what was going on in their heads and hearts. For these clients, it wasn’t just the physical threat of COVID, but also the threat of making the wrong decision, which could result in them losing their business or house, and having to let staff go,” she says.

“So, the skillsets of planners are changing and need to change, so we can better look after the financial and emotional needs of our clients.”

Sheila has also had to change the way she acquires clients. She participates in two radio programs each week, in addition to her educational speaking gigs with community, small business and women’s groups.

However, Sheila concedes her community engagement approach is taking her a lot longer to acquire new clients. “That’s because you really have to do the work to demonstrate the value of an advice relationship. But when people do sign up, you’ve got clients for the long-term and who value the advice process.”

Like many other advice businesses, Hari admits that Victoria Wealth Management is “struggling” to adapt to working more closely with a multicultural and diverse client base. It is struggling in the sense that it cannot deliver advice information to clients, such as in an SOA, in any language other than English, due to compliance and governance requirements.

“So, while I can have a conversation with somebody about advice in Greek, how do I then evidence that advice to show it fulfils all my duties and responsibilities as a planner? It has to be translated into English, but you run the risk of missing the cultural and language nuances of what’s being said,” Hari says. “In an era of informed consent, from a cultural competency perspective, how are we making sure we are even asking our clients the right questions? It’s a challenge for all advice businesses.”

Workplace diversity

While catering for the diverse needs of their client base, how do these advice businesses ensure diversity within the workplace?

Integro does not use staff quotas to determine who joins the business. Instead, it approaches recruitment with a mindset of not recruiting the same type of planners every time.

“If you look at the planning team at Integro, we are all quite different but remain united by our shared values system,” says Dawn. “So, for us, it’s not about trying to find more of the same. Instead, it’s about finding people with different skillsets and personalities, which enable us to provide a deeper offering to clients.”

Dawn accepts that when it comes to developing a business culture that embraces both client and employee diversity, the business remains open to change and evolving its processes.

“We know that we’re only going to get better by exploring different perspectives that come up through the advice process. Providing an environment where people feel safe to raise things that are not working for particular clients or colleagues, allows ideas to come forward, which enables us to fine-tune our process as we move along.”

Even though Sheila is a sole-practitioner, for her business, workplace diversity is built on collaboration and trusted relationships with referral partners, like accountants.

“Wealth Forum may be a one-person operation, but by collaborating with accountants and my referral partners – particularly when working with my small business clients – I’m effectively working within a team. It’s also important that this teamwork means that each professional partner stays within their designated lane and doesn’t overstep boundaries, whether that’s regulatory or client relationship boundaries,” she says.

“That’s how I am creating workplace diversity, by ensuring that every single view that a client needs to hear is represented.”

Top 7: Tips for building a culture of diversity

As champions of client and workplace diversity, our CFP^® practitioners provide the following tips for advice businesses wanting to improve their culture of diversity.

1. Inclusive language

The use of inclusive language in the workplace is extremely important. This includes addressing people by their chosen pronouns. “We need to be aware of the language being used in the workplace. What might be a joke to you, is hurtful to somebody else. This can marginalise people,” says Dawn.

2. Eliminate toxic behaviour

People in leadership positions need to set the standard by identifying and calling out toxic behaviour, and fixing it. This type of workplace behaviour can’t be tolerated and needs to be eliminated.

3. Believe and support your team

Employees need to be believed and supported when they raise examples of toxic behaviour, such as bullying, racism, and sexual harassment. Dawn admits to having experienced workplace bullying in the past, where she did not feel safe to speak up.

“That’s because the onus is often placed on the victim to prove their case,” she says. “So, when you have situations like gaslighting, it’s really left up to the victim to prove the allegation. Instead, support your team. Failure to do so, and you risk losing staff and gaining a potential lawsuit.”

4. Collaboration

Sheila believes it’s important for planners to be open to collaboration with other aligned professionals, like accountants, particularly if the client is already dealing with them. “This is a great way to leverage the trust that is already there,” she says.

5. Choose your ideal clients

While the needs of clients are so diverse, it doesn’t mean planners have to service every type of client. Planners should choose their ideal client type and service them. For other clients who seek your services but don’t fit your client criteria, they can be referred to other planners who can better service those clients.

6. New ways of working

Be open to new ways of working. This includes embracing technology, like Zoom, and remote working to enhance the client experience, while building greater business efficiency. According to Sheila, planners shouldn’t rely on pre-COVID business models, as client expectations have moved on since then.

“I’m actually learning a lot from the ‘cool kids’ on the block, like Adele Martin CFP^®,” says Sheila. “That’s because the way they are using technology and social media to engage and interact with their clients is refreshing and it works.”

7. Questioning techniques

Be mindful of cultural languages and the nuances within those languages when asking clients questions. Financial planning is a highly complicated and extremely personal topic for people, requiring planners to take considerable care in how they ask clients questions, and particularly more so with clients from a different cultural background.