While the likes of behavioural finance can help paint a picture of how clients invest and manage their money based on cultural factors, less emphasis has been placed on an adviser’s adeptness at relating to and working effectively with people from different backgrounds.
However, Amanda Craft, a financial planning PhD candidate at Griffith University, is paving the way for this area of study within advice while she works towards her thesis on the “Cultural Intelligence of Financial Advisers”.
According to Ms Craft, the initial idea behind her thesis began back in 2009, while she was studying international business and commerce.
Having spent two years as an accountant in rural Western Australia, Ms Craft encountered a diverse array of clients.
“It became really obvious, the cultural differences and the completely different ways people approached money,” she told ifa.
“I kept asking myself the question, ‘Why aren’t we teaching accountants and financial advisers and lawyers? Why aren’t we teaching them how to handle people who have a really different attitude to money?’”
Ms Craft began by asking advisers about their own experiences to find out whether they found culture was something that mattered in their line of work.
“Some of the advisers thought that it didn’t matter to their job, or that it wasn’t something in their day-to-day life,” she recounted.
“But when pressed, every single person I interviewed could tell me a story about a client from another country or another background, and somehow that affected the advice that they gave. I thought that was very interesting.”
She similarly asked advisers to assess the intercultural skills of their peers and received diverse responses.
“Some thought, ‘No, I don’t think that all advisers have the skill of dealing with people from different cultures’, while others said, ‘Of course they do, they absolutely must. Because you have to get to know every client as an individual’.
“In doing that, you are asking that person about their values, beliefs, expectations and what actions they prefer to take. So you are effectively asking people about culture, just not labelling it as culture.”
Following these initial research phases, Ms Craft refined her thesis to focus on a cultural intelligence framework. This, she emphasised, encompasses an understanding of culture that extends beyond national identity.
“[Culture is] your values that drive your belief and your thoughts. Those then get expressed in your behaviour and your actions,” Ms Craft said.
“You can have a personal culture, so you have your personal beliefs and your personal expectations of yourself and your own behaviours. And you can have a family culture, how people in your family do things.”
This also extends to corporate or organisational culture, she added, which includes an advisory firm’s operations and practices.
With both the submission of her thesis and the publication of the interview portion of her research set for the near future, Ms Craft’s aim is to provide advisers with a “practical and useful” resource – for those who want it.
“This is going to be, I suspect, my life’s work,” she said.
“I don’t think everybody will necessarily need to use something like this. But I think of it in the same way we use risk profiles – you have clients, and not everybody uses a risk profile questionnaire, but having that tool can be helpful for some advisers.
“I’m also intending to develop and run continuing professional development workshops, because unlike most other intelligences, everyone thinks intelligence is fixed. Intelligence is not fixed.”
Cultural intelligence, Ms Craft said, is a skill, and one that can be honed like any other.
“The point of cultural intelligence is that you can improve it. The more you know, the more you practice, the better you get.”
Fascinating study – it would make very interesting reading for us advisers.