Malaysia has long been a magnet for expatriates, drawing professionals and business owners from around the world. Last year, the nation’s Immigration Department issued 154,155 expatriate passes, the highest since 2018. This surge was driven by the need to fill the skills gap in various industries. As the expat community continues to grow, so does the demand for tailored financial solutions.

Seeing a limited number of his colleagues serving this niche group, Nicholas Wong Yik Him, a two-year MDRT member from Perak, Malaysia, shares his insights on how advisors can tap into the expat demographic to offer them financial services. Nicholas recounts this is one of the reasons he continues to serve expats and why he has grown to be a go-to among colleagues.

Understanding the expat's background and needs

The cornerstone of any successful financial planning for expats begins with a deep understanding of their unique circumstances. Nicholas stresses that financial advisors must take time to comprehend the expat’s personal and professional background, whether they are business owners or employees, their long-term and short-term financial goals, and even their family situation.

Nicholas explains, “Expats come from diverse backgrounds and their financial priorities vary significantly depending on where they come from and their current situation in Malaysia. For instance, an expat from Australia might be looking for different solutions than someone from China.”

By focusing on personal and financial backgrounds, advisors can craft more personalized financial solution, which often differ greatly from plans created for local clients. The ability to accurately assess and cater to these varied needs is a hallmark of a successful approach.

Professionalism and a process-oriented approach

Professionalism is indispensable when working with expatriates, Nicholas insists. The expats he encounters are often high earners or come from professional backgrounds, where rigorous financial planning and clear processes are expected in financial dealings. In his experience, advisors who exhibit a clear, systematic process tend to gain the trust of their expat clients more easily.

"My expat clients appreciate a professional and structured approach," he says. “They need to thoroughly know about the process of financial planning before they agree with the solutions. They need to understand it first before deciding on a solution that they may need.”

Nicholas outlines three essential steps: fact-finding, planned approach, and implementation. Each step must be transparent and data-driven, offering clients confidence that their advisor is prepared and knowledgeable. This also helps mitigate any surprises or misunderstandings, especially given the varied regulations and financial landscapes expats are used to.

Navigating documentation challenges

Documentation is another area where expats sometimes face difficulties, as each country may have its own stringent requirements when it comes to financial and insurance products. Nicholas mentions that one of the most common challenges is dealing with the more complex paperwork that often differs from client to client based on their home country’s regulations.

Expats can become frustrated by delays, so ensuring all necessary documentation is in place before any formal meetings is key. “Being prepared avoids unnecessary surprises,” Nicholas says, adding that clear communication about the documentation required upfront also helps manage the client's expectations. This attention to detail not only simplifies the process but builds credibility with clients who might already have had negative experiences in the past.

“I’ve had a client that once came from a middle eastern region that I was unfamiliar with. Knowing the potential client was keen on exploring financial solutions, I reached out to my team members to check on the documentation requirements for expats from that region. Although it was a complicated case, where additional documentation and rigorous background checks were conducted, I was able to advise the client accordingly and he was very happy because I was upfront about the whole process with clarity,” Nicholas adds.

Building trust and managing expectations

A common hurdle Nicholas encounters is building trust with expat clients, a common challenge throughout the industry. Nicholas elaborates, “Many expats arrive in Malaysia with prior experiences in financial services, often coming from nations with more advanced financial sectors. This leads them to compare local services with those from their home countries.”

Expats from places like China or Australia, for instance, may expect a higher level of service and expertise due to the more sophisticated financial solutions available back home.

To overcome this, Nicholas focuses on managing both his own expectations and those of his clients. “Expats may start with smaller financial commitments and gradually increase them as they become more comfortable with the advisor,” he notes. This requires patience and the ability to think long-term rather than expecting immediate large investments from the clients.

Regular follow-ups and reviews are also crucial. The first time Nicholas conducted a review was when a Chinese client of his started questioning whether he should continue with his current financial plan. Seeing this as a red flag, Nicholas set up a meeting soon after and created an Excel sheet to draw up their investments so far, comparing it with the potential benefits over the course of five years and ten years. This provided visibility of how the solutions were performing while retaining him as a client. This not only reassures clients but also reinforces the advisor-client relationship.

Positioning as a solutions provider

The final key to success in the expat market is positioning oneself not just as a financial advisor but as a problem-solver. “Positioning yourself as a solutions provider rather than just another advisor sets you apart,” Nicholas emphasizes.

Confidence plays a significant role in this. Nicholas recounts that exuding confidence, being transparent about issues, and treating expats no differently from other clients helps in building stronger, more reliable relationships. A particularly effective strategy has been transparency during challenging situations, such as claims during contestable periods, where a confident and straightforward approach has led to positive outcomes.

As Malaysia continues to attract more expatriates, advisors must adapt their approach to better serve the needs of foreign residents. While challenges like complex documentation and high expectations are common, a structured, process-driven approach and strong relationship-building skills are essential for success in this market.

Contact: MDRTeditorial@teamlewis.com

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A guide for financial advisors on serving expatriates in Malaysia