Cultural diversity is essential in wealth management and influences industry practices and customer experience.
A study found that companies that embrace diversity have a competitive advantage and are better able to win and retain top talent and improve their customer experience, employee satisfaction, and decision-making.
Here’s how cultural diversity can improve wealth management practices -
Helps in the development of a customised approach to wealth management
Customers from different cultural backgrounds come with unique needs, financial goals, risk levels and perspectives on wealth. This makes it necessary for businesses to tailor solutions that align with their customer’s values and interests.
Brings the need for better cross-cultural communication
Cultural diversity brings the need for better communication skills to understand clients from diverse backgrounds. This includes navigating different languages, communication styles and cultural norms, which can help build long-term customer relationships.
Impacts investment preferences
A culturally diverse customer base comes with different attitudes towards risk, investment strategies and their choice of asset classes. Some cultures prefer stability and security and may prioritise low-risk or balanced investments, while others may be open to high-risk investments for higher returns.
For example, in Islamic culture, all forms of interest are forbidden under the Sharia law. African American culture sees real estate as their preferred investment vehicle over traditional investment accounts. The investing attitude also varies from collective to individual cultures.
Understanding your customer base can help wealth managers position their customer’s financial goals with their cultural values and create a well-tailored and thoughtful approach to building their wealth.
Promotes inclusive decision-making and a diverse workforce
Culturally diverse teams bring different perspectives and experiences to the decision-making process in a company and help foster creativity and innovation. This inclusive decision-making also helps develop comprehensive and culturally relevant decisions, which is an attractive marker for any company and reflects the diversity of its customers.
Companies with high diversity are also seen to outperform their low-diversity peers in terms of profitability.
Can open global market opportunities
Businesses that embrace cultural diversity can tap into new markets and cater to clients from different countries or cultural backgrounds. In addition, with the help of a diverse customer base, wealth managers can position themselves as trusted service providers and expand their customer base globally.
WealthKernel supports cultural diversity and aims to democratise access to finance. We are supported by a diverse tenant base, including Wealth8, an investing platform aimed primarily at the Black and Multi-ethnic communities in the UK and Africans, and Wahed Invest, a halal and value-based investing services provider.
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