Map the road to retirement

For many people moving to Canada, retirement’s low on the priority list. Most who come here under the family-class category think first about making ends meet, says Tony Mahabir, CEO of Canfin Financial Group.

By contrast, wealthier families or those moving for jobs are more concerned about taxes, says Jamie List, co-founder of Bearing Capital Partners in Toronto. They’re unsure of the Canadian tax brackets and which they’ll fall into.

Regardless of income level, though, once they’ve secured a home and built credit, advisors can help them look out further and start financing their futures.

“The average immigrant client takes about two years to settle down,” says Mahabir, who arrived from Guyana in 1983. He helps people acclimate by relating his own experiences.

Read: Tax issues for immigrant clients

His family was worth more than a million Guyanese dollars, but that translated to only $22,000 here. Many newcomers often think their home currencies go further than they actually do.

They then realize they’re facing inflation and higher living costs. Mahabir harnesses their sticker shock to help them make realistic estimates about how much money they’ll need.

By explaining how houses appreciate over time, or by comparing what he paid for food in the 1980s, he shows how prices might rise in future. To meet medium-term goals, he says, they’ll need to start investing now.

Tips For immigrant retirement planning:

During discovery: Avoid jargon such as TFSA and CPP. But expect clients to come in asking about products advertised in the media or recommended by family, like RRSPs and RESPs.

Hard versus soft sells: Many immigrants are wary of sharing personal financial details, and their attitudes are often spurred by corruption back home; “a few of my clients weren’t able to trust the local banks,” says advisor Tony Mahabir. They’ll shy away from aggressive sales approaches—they’ve been warned about scams and frauds—so explain how your advice directly benefits their bottom lines.

Popular products: Immigrants often need life and disability insurance, since they may be sole breadwinners or send money home to extended families.

Read: Second-gen immigrants craving advice

To help them look even further, he asks if they want to retire in Canada or return home, and projects what each scenario might cost. “The more personal the scenarios, the more involved clients will be,” he says. When real numbers are attached to goals, clients are often willing to start the process right away.

More prepared for longevity

Most immigrants didn’t have vehicles like OAS, universal Medicare and government pension plans back home. Instead, they relied on their own abilities to save.

“Saving rates are very high in countries without robust social programs. These clients didn’t expect to receive social assistance, and are often better equipped mentally to face the challenges of longevity.”

So, help new Canadians harness these tendencies so they plan effectively for their retirements. “Tell them to continue saving and help them decide how [government] income streams will fit into their plans,” Mahabir says. “Within four-to-five years, my immigrant clients are at par with my other customers in terms of assets, and often surpass them.”

Read: Proposed U.S. immigration reforms could impact older clients

He once had a client from Greece who started at minimum wage but scraped together enough to start a restaurant and put his children through university.

Those kids and their spouses have lucrative careers and have also become Mahabir’s clients. The lesson: by serving new Canadian clients, you can break into multi-generational planning; it also provides the chance to retain customers over the life of your business. Back to the 6 ways to help immigrants