Advisors may face new challenges from more foreign-born clients.

President Bush's proposal to grant temporary legal status to millions of undocumented workers employed in the United States may mean more advisors will be dealing with the financial needs of foreign-born clients.

The Bush administration estimates that at least 8 million undocumented people, more than half of them from Mexico, are in the United States. If these workers and their families are allowed to stay in this country, they no longer will need to fear that their actions-such as using various financial services-somehow would reveal their illegal status. And that could mean more of them will knock on the doors of financial advisors for help in managing their money.

Foreign-born workers often face double taxation and legal issues as well as investment and cultural ones. Some cultural issues may find financial advisors donning a psychologist's hat.

Jeffrey D. Hill, a CFP licensee with LPL Financial Services Inc. in Denver, says he has noticed that Latin clients tend to be cautious, compared with Americans, who are very open in disclosing their finances. In fact, he has been surprised to learn from existing Latin clients-perhaps during an asset-allocation discussion-that there really is another bank account somewhere. The surprise revelation means that a portfolio Hill had considered well diversified actually may be overweighted in cash.

"They (Latinos) just give you a little bit of information until they know you much, much better," Hill explains. "The government has taken over assets from people at different times in the past. I often say things like whenever the time is right, what I really need is to do something comprehensive. You don't have to tell me everything about where things are, but I have to have a general idea for cash flow." Or, after the relationship develops, he might say, "I think you've come to trust me now. I'm really looking at overall picture."

Rita Mansour, manager in the Toledo, Ohio branch of McDonald Financial Group, an affiliate of Cleveland-based KeyCorp, deals with a lot of Muslim clients. Many Muslims won't invest in tobacco, pornography, alcohol or usury, such as finance companies. Mansour knows of two mutual funds that follow those parameters, she says, but they don't have long-term track records. "It's important to me that we can do the proper due diligence," she says.

"One client may say, 'OK, I will buy Hilton hotels,'" she says, but stricter followers won't buy Hilton because the company sells alcohol in its bars. She might put money with private money managers, and an internal portfolio strategies group can help her with individual stock selection.

Mansour says that immigrants in the United States tend to be more conservative investors. "They have the misconception that if they come to a financial advisor, that all we're going to offer is stock solutions," she says. Instead, she works to give them anything from laddered bonds to laddered CD portfolios and conservative REITs.

Connie S. P. Chen, CFP, of Chen Planning Consultants Inc. in New York, who has found herself working with foreign clients, often as a result of marriage, finds they typically have a glaring misconception. Because they are not U.S. citizens or they lack a "green card," which guarantees them permanent residence in the United States, they believe that they needn't file U.S. taxes.

Wrong. In fact, attorneys warn that people with assets in the United States who fail to file taxes both in the United States and in the country in which they live could risk severe penalties from both countries. So Chen must explain to her clients very carefully the tax implications of living in the United States. "As long as you have any assets in the United States, it will not only be subject to income taxation, but also estate tax as well," Chen stresses.

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