How Scotia Wealth seeks to capture the South Asian market

Scotia Wealth Management looked at immigration numbers and saw opportunity. Identifying Canada’s large and growing South Asian population they’ve sought to bring more high net worth South Asians into their wealth management division through a relatively straightforward strategy: partnering with one of India’s largest banks. The deal announced last month is between Scotiabank Wealth Management and ICICI Bank Canada, a subsidiary of the Indian financial giant ICICI Bank. ICICI Canada will refer its banking clients to Scotiabank for their wealth management needs. It’s the kind of referral partnership that’s as straightforward to think of as it is challenging to execute.

Amit Brahme, VP of strategic cultural segments at Scotia Wealth Management, explains why his firm has targeted the South Asian market in Canada and how this partnership is designed to help them grow in that space. He highlighted the infrastructure and training required to manage such a deal and hinted at some of the other key cultural segments that his firm is looking to expand their reach into.

“We've been looking at the Canadian landscape, and what you will recognize is that newcomers are a big driver for both the Canadian population as well as household formation. There are different cultural segments that have been key for Canada over the years, as people have come and lived here for generations,” Brahme says. “As part of that strategy, as we look at the various entrepreneurs, the business owners who are part of these key cultural segments. We had a particular focus on South Asians, and ICICI is an extremely well known and trusted brand among that community.”

The clients Scotia Wealth seeks to serve through this deal, Brahme explains, are the high net worth South Asians in Canada banking with ICICI. He notes that this client segment is growing, in part through immigration and in part through the growing number of South Asian entrepreneurs and wealth creators in Canada. He notes that roughly half of the total immigrants coming to Canada now are South Asian, while people of South Asian descent make up roughly seven per cent of the total Canadian population according to StatCan.

While the referral partnership with ICICI is designed to channel more of this growing population to Scotia Wealth advisors, that’s only the first part of successfully capturing this market. Brahme notes that many of these clients might have assets, family, or business interests back in either their home country or another country. Navigating the legal, estate, and tax implications of these cross-border lives can be challenging. Moreover, there are soft skills and cultural competencies that have to be considered, not to mention the potential language barriers that can emerge when pulling from a region with hundreds of languages.

Brahme explains that his firm’s work to manage these challenges begins with advisor education. They’ve worked to expand cultural understanding, so that advisors who are not of a South Asian background can grasp key nuances that their clients might display. They’ve also striven to hire more advisors and associates of South Asian backgrounds, who may have language skills and cultural competencies that can help with this growth goal. To address more tangible challenges like cross-border tax and legal issues, Brahme says Scotia can leverage its various arms and components, using in-house experts where necessary to solve problems and answer questions for complex clients. He notes, too, that the firm is building additional pieces of infrastructure to manage some of these emerging questions.

The ICICI partnership and growth in the South Asian market are Scotia Wealth’s current priority, but Brahme says that they are already exploring growth in other key cultural segments. While that may not take the same form as a partnership with a foreign institution, he says that Scotia has identified other cultural communities as potential future growth areas for their wealth management division. It’s a strategy that aims at serving Canada’s unique position as a nation of immigrants where many distinct cultural communities thrive.

“Being a newcomer myself who came to Canada about 20 years ago, I found that many business owners, entrepreneurs, wealth creators, and high income professionals have a connection through a country, a culture, or a professional organization,” Brahme says. “There are different ways in which you can connect with them as a cultural segment. In doing so you can ensure that they understand a total wealth approach and the advice model that se use. We are focused on this relationship with ICICI and the lessons it will teach us, and then we can think about the next steps.”