Financial advice is not one-size-fits-all. The way people view money is impacted by their culture.
Planners who are aware of cultural influences can help clients make better choices. For example, clients from collectivistic cultures often consider their extended families in setting goals and responsibilities.
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Cultural Values and Attitudes Towards Money
Whether you are a financial professional or an individual, your culture affects how you think about money and what you value in life. It also influences your attitude toward risk taking and savings.
National culture has a significant impact on money attitudes and can influence behaviours related to indebtedness and mortgages (Guiso, Sapienza, and Zingales, 2013), shopping behaviours (Gentina et al., 2015), and stock market investment behaviours (Mitchell and Mickel, 1999).
It is important for financial professionals to be in tune with the cultures they work with. This will increase the effectiveness of their education programs and enable them to understand patterns in how different groups view problems, and approach financial decision-making. It will help them to build deeper, more supportive relationships with their clients. They will better understand their clients’ “money story” and the cultural influences that have shaped it. It will also help them to create better financial plans and outcomes for their clients.
Cultural Values and Attitudes Towards Financial Institutions
While companies must address culture to be successful, financial firms are unique in that they play a public role in allocating capital and exerting market discipline throughout a complex global economy. Large problems can arise from small corners of these firms, as the recent fines against BNP Paribas for violating sanctions programs and Credit Suisse for facilitating tax evasion attest.
National culture also influences banks’ risk taking. Several scholars find evidence that cultures with high individualism and low uncertainty avoidance tend to promote risk-taking in banking.
To reduce these risks, it is necessary to take cultural differences into account when designing financial education programs. This includes knowing the specific culture of the client (education levels, socioeconomic status, religion, traditions, family values, etc.) so that trainers can customize their presentations to the needs of each group. It also means that the trainers will be more aware of possible misalignments between their own values and those of the clients they serve.
Cultural Values and Attitudes Towards Investments
Different cultures can have different attitudes toward investments. For example, individuals from collectivist societies may be more inclined to take risks with their investments because they can rely on family and friends for financial support in times of need. Conversely, individualism-based societies might be more risk averse.
Cultural factors can also influence the time frame that people set aside for investing. For example, in western countries homeownership is often seen as a rite of passage and so many invest money in property rather than in other asset classes.
Additionally, the meanings that different cultures attach to symbols and dates can influence investment decision-making. For example, a belief that stocks are more volatile on Friday the 13th is based on a fear of paraskevidekatriaphobia, which is associated with bad luck in many cultures. Financial educators must be aware of the impact that culture has on saving and investing behaviour, and develop financial education programmes that reflect these differences.
Cultural Values and Attitudes Towards Savings
Cultural values and beliefs can affect savings, investment decision-making and financial growth. As a broad generalisation, Western societies are more individualistic and Eastern societies are more collectivist. These differences can have implications for individuals, such as their attitude toward risk and whether they are willing to take the plunge and invest.
Other factors, such as age and income, are also important determinants of saving behaviour. But the impact of culture is still considerable, especially among first and second-generation immigrants (though it declines slightly in the third generation).
The authors of  used a unique dataset to study the effect of cultural heritage on saving behavior. They matched immigrants with their country of origin and then compared the results. The approach allowed them to isolate the influence of culture from that of other economic and institutional influences. This is a key advantage over other studies, which rely on cross-sectional data and do not control for different types of heterogeneity.