RIA launches team for Asian wealth, filling lucrative niche

Maggie Liu was accustomed to holding appreciation events in the late winter, around the Lunar New Year, for Chinese clients at her previous firms. 

Bordeaux Wealth Advisors

"It's always very successful," she said of such events, adding that they generated strong goodwill with clients — reflecting the Chinese concept of "guanxi," or cultivating personal relationships that aid in doing business. 

But when she began interviewing around that time this year with Bordeaux Wealth Advisors, a registered investment advisor based in Menlo Park, California, Liu was impressed with the firm leaders' openness to taking things further with such clients. 

Liu is now a wealth advisor at Bordeaux and the firm's director of Asian Wealth Advisory, a new unit whose launch was announced on Oct. 17. The unit focuses on wealthy Asian families and individuals and will provide them with holistic wealth management and services, "including investment, tax and estate planning and more," according to a press release. 

The news comes as Asian Americans have become the fastest-growing racial or ethnic group in the U.S., with their wealth also growing significantly. A report earlier this year by Merrill Wealth Management identified them as making up around 10% of the American affluent population. Although wealth varies among different Asian ethnic groups, and even within those groups — with many households experiencing severe poverty — Asian Americans have the highest median income of all racial groups in the U.S., according to 2021 Census Bureau data.

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"Whenever we work with Charles Schwab or several center-of-influence-type of referrers, CPAs, estate attorneys, you just see the numbers of these clients that we're working with are increasing, from the Asian community," Liu said. "So definitely the demand is already there. And we have the supply, with the people that are on the team already." 

Bordeaux is owned by RIA aggregator Focus Financial Partners, according to SEC disclosure files. Focus, which was formerly a public company, is now majority-owned by private equity firm Clayton, Dubilier & Rice with minority ownership held by funds at Stone Point Capital. Bordeaux reported $4 billion of assets under management as of the end of 2022, a spokesperson said in an email. Around 1% of its clients are "non-United States persons," according to its Form ADV.  

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The firm's move to court Asians as a team is rare among RIAs, said Liu, who joined Bordeaux in July from Empirical Wealth Management. 

"Normally the other firms that I've worked with before don't necessarily think to put together a formalized practice to focus on that group. It's more of a one-off, event-planning type of situation." 

However, "It's not that other RIA firms don't think about this market," Liu said. Rather, based on her experience at other firms in the industry, other RIAs' approach to wealthy Asian Americans has lacked a "personalized, tailored approach" that reflects a deeper cultural understanding. 

"Successful financial planning relationships are always based on confidence and trust," James Lee, the president of the Financial Planning Association, said in an interview. "We know that consumers like to work with financial planners that are similar to them, both in terms of diversity and culture and language." 

FPA

In his own practice, as the founder and president of RIA ​Lee Investment Management, Lee said he has several Asian American clients who chose to work with him in part because they felt he understood their "unique life challenges." 

For example, many Asian Americans are inclined to prioritize their children's higher education, even at the expense of other financial goals. "They will sacrifice their own retirement and other goals in order to meet that education goal," Lee said. 

Going beyond token talent
In the RIA world, Liu said she has seen firms make a minimal effort at times to meet the unique needs of Asian clients or prospects. 

The firms might hire a single Asian employee and call on them to provide translation services when a prospect or client has language needs, for example. 

"It's like, they will say, 'Oh, you need a Chinese person? Great, we have an advisor who is bilingual.' That is very common, actually, if you look around all the other firms out there," she said. 

Such firms think, "If you speak the language, then you will get the business. … At the end of the day, that's not true," she laughed. 

A single advisor, even if bilingual, simply doesn't have the resources to help such clients with the many complex needs they are likely to report. They might be just an ordinary advisor and likely don't know "how to plan for international outbound asset movement," Liu said. 

In particular, given the importance of family unity for many Asians, wealthy clients who were born or naturalized in the U.S. often have older family members overseas that they want to bring over to the States — but few firms have resources to address such immigration-related planning needs, Liu said. And as the Chinese government increasingly cracks down on citizens' ability to migrate their assets overseas, clients find it challenging to address the legal, tax and estate planning implications of moving. 

"That is actually giving us more planning opportunities," Liu said. 

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At Bordeaux, the new Asian-serving team includes several members with credentials including CPA, CFP and chartered financial analyst, who are all either first-generation immigrants or second-generation to the U.S., Liu said. Liu herself is a certified private wealth advisor. In addition, the team partners with immigration attorneys and other experts familiar with international tax law who can help with the holistic needs of clients and their families. 

Language skills are also important in working with Asian clients, Liu said, but not in isolation — rather, they matter when packaged with those other specialized resources. She recalled the case of a recent referral from the Schwab Advisor Network, a wealthy Chinese American tech professional who wanted to bring her parents over from Shanghai in the next few years. The woman was looking for someone who could speak Mandarin with her mother "the whole time," and said her top priority was an advisor who could facilitate her parents' move, Liu said. 

"The financial consultant at Charles Schwab that sent the referral, looked around all the options … and found that Bordeaux is the only firm in the entire network of hundreds of advisors they can choose that has this specific team" that could provide planning and support for the parents' immigration, Liu said. 

"That is where this whole-team approach that we have within our firm is a tremendous value-add. It really makes us stand out." 

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Bordeaux already has six staffers who speak Mandarin, which reflects their primary client base among Asians at the moment (Chinese immigrants and their families), as well as a few other employees of Asian heritage (including Korean, Indonesian and Filipino). The firm plans to hire Indian Americans, Liu said, to cater to wealthy Asians of that background. Liu herself identifies as Taiwanese American, with family roots in mainland China. 

By making use of these employees' personal connections to clients' cultures, "We're also promoting and encouraging the DEI … culture in our firm, as an overall team unit," Liu said. 

"We personally have all experienced coming to a new country, new places, whether it's for studying, or family immigration."