Financial Advisors ignore immigrants. Here’s why we matter.

As a migrant who has called the U.S. home for eight years, I, like many others, understand the immense value of financial security. Migrants are a driving force in the American economy, yet traditional financial planning services often fail to address our unique challenges. Visa restrictions make investing in some assets and controlling those investments hard. The result? Billions of dollars are locked out of the market, hindering migrant wealth creation and the overall economic potential of the U.S.

Legally, there are plenty of restrictions that can limit foreign workers and immigrants’ financial growth, including what type of assets to invest in, how much time they can dedicate to their investments, and their involvement in the development of their investment portfolio.?

Since legal immigrants are major contributors to recent and historical U.S. economic growth, it's clear there's a lot of potential locked out of the system. The financial services industry hasn’t been proactive in creating tailored services to help immigrants maximize their investment opportunities, all while navigating their visa restrictions. This is especially worrying when you consider how fragile our visa status can be, and how easily bad financial advice from an outside advisor could jeopardize everything we've built.

This lack of personalization in financial offerings generates uncertainty and fear when wanting to seek financial or tax advisory. We're unsure whether the financial services we are looking for align with our current visa requirements and potential future immigration goals. Financial services often fail to consider the unique challenges immigrants face. This creates a deep gap between the "norm" – Americans with seemingly limitless investment options – and immigrants. The latter are restricted by visa limitations, often unable to invest freely or participate actively in managing their investments if it conflicts with their main source of income.

Let me take a step back and explain my frustration. Like many migrants, I've found myself in a tricky spot. I have a demanding job in the U.S. that takes up most of my time, and I have a visa that doesn't allow me to explore other income opportunities. For years, I've been searching for solid financial advice to make the most of my savings while I'm here. But finding an advisor who truly understands the complexities of my visa situation? That's been a real challenge.?

I have spent countless hours talking to financial advisors across the U.S. who claim to be at the top of their industry, promising the most comprehensive financial advice, and even bundling their services to include ‘perks’ such as unlimited access to a certified financial planner (CFP), however, it all falls apart when I ask a simple question:

‘How are you taking into consideration my current and potential future visa status in your financial strategies?’

Their answers usually go along the lines of, ‘We also have immigrants in our team, we can always ask them for their opinion’, or ‘Don’t worry, we’ll figure it out’. While I appreciate the positivity, that’s not reassuring. The last thing I want to leave hanging without a concrete action plan is how they will take care of my visa - which can easily be the most valuable thing I have. The bottom line is that I decided to stop trying to get a financial advisor as it became clear they were uninterested in including my visa restrictions and goals in their recommendations.

Many of my fellow immigrant friends come to me for advice on managing their finances. This, combined with my own experience navigating the complexities of balancing investment opportunities with visa restrictions, has opened my eyes to the significant challenges we face in growing our hard-earned money.

So what makes immigrants so unique that the financial industry struggles to cater to us properly?

While financial basics might be similar, cultural, economic, and social factors play a big role in immigrant financial decisions. Here are some things that make us unique:

• Cash is King: Financial plans for immigrants often extend beyond their immediate needs in the U.S., which requires having larger than usual cash reserves. Reasons include:

1. Constant Visa Uncertainty: Unexpected expenses such as high immigration lawyer fees often lead immigrants to prioritize having a larger cash reserve than the typical U.S. citizen. We typically resort to lawyers for last-minute emergencies when we fear our visa status might be affected by unexpected circumstances. Which can turn out to be very often. Just initial consultations can range between $150 and $300 per hour. In my case, I have spent over $4,000 over the last few years in consultation fees alone, excluding thousands more for visa requests.
2. Family Focus: Financial plans typically extend beyond their personal needs, often including support for family back home. Remittances are a major economic factor for many migrants. The U.S. is still the largest source of remittances in the world which is mostly driven by immigrants that reside here.

• Visa Restrictions: Financial decisions can impact a visa status. Traditionally, financial service providers and immigration law experts are separated and typically don’t collaborate on an individual’s case, which creates an extra layer of complexity. Questions like ‘How will my taxes change with a Green Card?’ are crucial to help the immigrant not to breach their visa status. The alignment between immigration and financial services also allows the immigrant to apply for visa opportunities that align better with their immigration plans, which is the priority.?

When you add these and other variables to a financial or tax planner’s plate that can’t personally relate to the experience of a client or have the immigration knowledge or tools to guarantee that their suggestions are aligned with the immigration goals of their client, the client can feel in an environment where they don’t feel they can trust advisors.?

The High Cost of Inaction

For example, H-1b visa holders, who in general, are immigrants with higher than average salaries, and who contribute over $75 billion per year to the U.S. economy. This group, which has over 600,000 active visa holders, is an incredibly powerful group that is at a disadvantage because of this lack of personalization.

Some examples of how H-1b investments are affected include:?

• Real Estate: Direct property management might conflict with an H-1B holder's primary job. Typically, H-1b holders would have to hire a third party that would manage the investment property on their behalf, which is an added cost. On top of that, hiring someone else requires careful communication with the U.S. government to avoid jeopardizing their visa status.
• Stock Market: Extensive trading activity could be flagged as "day trading," considered a second job, which can violate visa terms.
• Tax Implications: H-1B visa holders can jeopardize their visa status if their tax returns don't accurately reflect the details and compliance of their investment activities.?

While there is not a lot of data to understand how these factors have affected the decision-making of H-1b visa holders when wanting to invest their capital, we have indications that the share of their income that is invested remains shockingly low, at about 3.4% as of 2019.

Despite the significant economic contributions of H-1B visa holders, there's a striking absence of comprehensive data on their savings and investment patterns. This information gap isn't just an academic oversight - it's symptomatic of the broader neglect of immigrants' unique financial needs. While we have extensive data on general population financial behaviors from sources like the Federal Reserve's Survey of Consumer Finances, visa-specific financial data remains minimal.?

This lack of targeted research not only hampers our understanding but also limits the development of tailored financial services for these crucial groups. The scarcity of data itself underscores the urgent need for greater attention to the financial behaviors and needs of H-1B visa holders and other immigrant groups.

Let’s do something about it.

Building solutions that help us improve our financial conditions while not risking our visa status, should be a priority. Fintech solutions that have a vision of positively impacting immigrants’ journey in the U.S. should focus on improving the financial performance of legal workers who are unable to choose advisors due to the lack of personalization in their services.?

I have spent the past years sharing strategies that I have learned with fellow migrants. I have built a network of financial, tax, and immigration advisors that have helped me maximize my income while staying compliant with my visa.

I plan on sharing more about this topic in the coming weeks, if you want to stay in touch, please sign up at (www.getaspira.com)!

G

Contact:

[email protected]

Disclaimer: The information contained herein is for informational purposes only and should not be construed as financial, tax, or migration advice.? I am not licensed or certified to provide professional services in these areas.? Please consult with a qualified financial advisor, tax professional, or immigration attorney for guidance specific to your situation.