Looking for a Financial Advisor for First Gen Indian Immigrants?

Opportunities abound for individuals and families who have recently moved to the United States from a foreign country, but so do challenges that must be overcome. As first-generation Indian immigrants, smart financial planning requires learning how to save for retirement and attain goals like funding children’s higher education in a tax-efficient manner.

Rather than adding to an already long list of skills immigrants in America must learn on their own, many first gen Indians choose to hire financial advisors who share their Indian heritage and can help them create a thoughtful financial plan so they can enjoy life more with less money stress.

You’ll likely find dozens of nearby financial advisors well-suited to help you reach your money goals with a personalized plan. But it may be more difficult to find a financial advisor who specializes in serving first gen Indian immigrants.

Fortunately, many financial advisors offer virtual services so you can meet online no matter where you (or they) live. This means you can choose to hire a specialist financial advisor who lives hundreds of miles away if you decide their knowledge and experience working with first gen Indian immigrants is a better fit to help with your unique financial planning needs.

Financial Planning for First Gen Indian Immigrants

💡 In the Q&A below, you’ll gain insights from financial advisors who work with first gen Indian immigrants to help them make smart decisions to enjoy life more today while preparing for a comfortable retirement in the future.

🙋‍♀️ Do you have questions not answered below? Use the form on this page to submit your questions, and we’ll update this article with answers from the financial professionals and educators in the Wealthtender community. You can also contact the financial advisors featured in this article directly to set up an introductory call or ask your questions by email.

Q&A: Financial Advisors Specializing in Serving First Gen Indian Immigrants

Answers to Questions with Amol Desai, CFP®, CFA

We asked Amol Desai, a Houston-based financial advisor and specialist for first generation Indian immigrants, to answer questions about the unique financial planning challenges and opportunities for the clients he serves.

Q: What is a common financial planning challenge unique to first gen Indian immigrants that you frequently encounter when working with your clients? How do you work with them to overcome this challenge?

Amol: I get to interact – during my planning work for my clients & during other social interactions – with many households who migrated from India to the United States in their 20s. Typically, they come here for their graduate studies. After graduation, they start their jobs and families and get busy building a rewarding career and life for themselves.

As they grow in their career, with increased income and asset levels, they start to realize that the US financial system is complex, with lots of nuances and continually changing tax laws. They find that they don’t necessarily have the relevant know-how and/or time to ensure optimal organization of their personal finances. In addition, they also have financial assets still held in India. It’s a challenge for them to know how to think about maintaining assets in both the US and India.

Some key questions they often face are:

• What are the tax implications of holding assets in 2 countries?
• Should I report my assets in India to the IRS? If yes, when and how should I report it?
• Will there be any tax liability?
• What are the penalties for non-compliance?
• Should I keep investing in India? Or Should I liquidate and bring everything to the US?
• How does the foreign exchange risk play out and how to manage it?

I help all my clients by first understanding their own specific situation because there is no one right answer for everybody. Often there are competing financial priorities that require a careful and incremental approach to developing an actionable plan suitable for every household’s unique needs.

Working on these challenges involves educating my clients about the concepts applicable to their own situation which may include a need to file form FBAR, understanding PFIC rules and related tax formalities if they hold their Indian investments through mutual funds, consequences of being a beneficiary to a substantial inheritance in India, minimizing foreign exchange risk of their portfolios etc. When combined with their personal financial goals and needs here in the US, it often presents competing financial priorities. A careful thought and step-by-step approach is adopted to develop an actionable plan that can tackle all the issues involved.

Q: For first gen Indian immigrants who are unsure whether or not they should hire a financial advisor at the current point in their lives, what guidance can you provide to help them make a more informed and educated decision?

Amol: When someone is considering hiring a financial advisor, I often find that they are not entirely clear about why they want to work with an advisor and what they can expect from such an advisor-client relationship. I like to facilitate my potential clients to dig deeper in their thought process and understand why exactly they want to work with an advisor.

If you want to earn high rates of returns on your investments year after year and are in search of some magical investment strategies that you believe some financial advisor would know, I want to caution you. Contrary to a common perception that an advisor’s primary job is to help you earn high returns, the reality is that any competent advisor looks at investment management as only one tool in his/her toolbox. And, instead of continually chasing high returns, the advisor prefers to focus on identifying client’s values, goals, constraints and any other aspects of personal finance like tax implications, insurance needs etc. so that an actionable and comprehensive plan to optimize all areas of personal finance can be developed.

I like to broaden potential clients’ perception about financial advisors and their work by explaining what comprehensive financial planning is and how it goes beyond just investment management. It involves a systematic process to analyze and find improvement opportunities in cashflow management, maximization of employee benefits available, retirement planning, investment planning and management, tax optimization planning, insurance needs assessment, estate planning etc. and addressing various ad-hoc situations as clients’ lives evolve.

Once you understand what planning is and how advisors work, it’s not difficult to realize that to optimize our personal finances, we require 2 key aspects – the up-to-date technical knowledge and a discipline to act systematically on this knowledge. In addition, if you are a first-generation migrant from India and still connected to your roots back home, it presents an additional layer of complexity around cross-border planning considerations. If you possess the skills (the knowledge and the discipline to act on it) or have time and interest to acquire and practice it, you don’t need to work with an advisor.

Assess realistically if you have the discipline and know-how to make and implement a plan for yourself or is it preferable to have a collaborative professional on your side who is willing to understand your specific circumstances to guide you in building and navigating your financial future? If yes, then hire a competent advisor, who is more than just about managing your investments without knowing your ‘why’ (your values, goals and circumstances).

I recently did a webinar on this specific topic which also describes, towards the end, what you should expect from a competent advisor and how to choose the one that fits your needs. Use this link to register or watch the webinar replay.

Q: How do the services you offer first gen Indian immigrants distinguish your firm from other advisory firms?

Amol: I primarily offer comprehensive financial planning services that include investment management along with all other aspects of personal finance for a first-generation Indian immigrant to the US.

Being a first-generation Indian immigrant myself, I have experienced firsthand what it takes to come to a new country for education, go through an exhaustingly long process of immigration while building a career, slowly familiarizing yourself to a foreign financial system and trying to research, understand and navigate the issues involved when maintaining assets in India in addition to the US. Optimizing your financial life here in the US while still having roots back home (I still have my parents and sister in India) requires understanding of an extra layer of complexity than any other regular advisory firm. My clients depend on such understanding and often rely on the fact that I come from a similar background and incorporate my own experiences in the planning and investment management that I do for them.

My ability to ask the right questions around my clients’ cross-border planning issues when I first start working with them often distinguishes my firm from other advisory firms. Some important questions include: Do they have any financial accounts in India? What account balances these accounts generally hold?, What type of investments do they own (mutual funds, stocks, real estate etc.)?, Are there any financial dependents in India to whom they need to provide support from the US? Is there any recent or soon to be expected inheritance we need to consider? Any plans of selling Indian investments and any unrealized capital gains in such investments?

Knowing answers to these is key to plan any related future actions in a tax-efficient way.

Besides having a personal relatability with my fellow first-generation Indian immigrants due to my own background and experiences, my clients also appreciate the professional distinguishing factors I possess. They know that my engineering background has provided me with a strong analytical perspective. They understand the hard work, passion and curiosity that goes into continuously learning so I can keep myself up-to-date with the highest quality knowledge and skills required in this profession. Multiple highly respected credentials like CFP, CFA, and GFP Fellow are very rare to achieve and hold for one individual, and my clients appreciate that their advisor has put in significant time and effort towards it.

Get to Know Amol Desai, Financial Advisor for First Gen Indian Immigrants:

View Amol’s profile page on Wealthtender or visit his website to learn more.

Q: Is there a particularly memorable experience or a moment you recall with a first gen Indian immigrant client when you first realized they have unique opportunities and circumstances when it comes to their financial planning needs?

Amol: During my initial data gathering and analysis for one of my new first-gen Indian immigrant clients in 2021, I found out that he had received a substantial inheritance in India back in 2016 in the form of an investment in a single stock. The stock was purchased by the parent many years ago with a very low cost basis resulting in a large amount of unrealized capital gains that my client was now holding as his Indian portfolio. This situation presented me with 2 great opportunities that were extremely valuable to my client:

1. Opportunity to Educate: As a US tax resident my client was unaware of his liability to pay taxes on his global income. If he now sells the stock in 2021 he would need to pay capital gains taxes in India as well as in the US as per the local tax rules. However, if he had sold the stock immediately as he received it in 2016 he would not have been liable for any taxes. Because, back in 2016, India did not impose any long-term capital gains taxes whereas in the US he benefits from the ‘Step-up’ in basis rule. Here is the learning opportunity – In the US when you receive an asset (except the assets called IRD assets) as inheritance, the fair market value of the asset on the day of receipt becomes the cost-basis of the asset. Therefore, if you sell it as soon as possible after you receive it, there will be negligible capital gains and hence negligible capital gains taxes.

My client lost this opportunity in 2016, but it was worth learning about the rules in case a similar situation arises for him or his loved ones in the future.

2. Planning Opportunity: To hold a single stock in foreign currency (Indian Rupee) was risky. My client was holding a concentrated stock position and was also exposed to a substantial foreign exchange risk (what if rupee depreciates vs dollar in the long run?). Considering many other factors present at that time, we wanted to sell the stock and bring the proceeds back to the US so they could be invested in a more diversified portfolio. However, the unrealized capital gains built into the stock were of such proportions that a lump-sum sale would have put my client in a 20% long-term capital gains tax-bracket vs. 15% in the US. Instead, we implemented a plan of a staggered sale of the stock over 3 years where his long-term capital gains tax rate would never go above 15% but he would have to accept a gradual reduction of the foreign exchange risk. This strategy saved him thousands on taxes over 3 years.

Such tradeoffs are common in many planning situations. There is never a single solution that is right for everybody. Preferred solution that comes out of a planning exercise often varies and heavily depends on client-specific circumstances and goals.