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Wealth Management For Expats

Wealth management can be extremely difficult for expats, incorporating increasingly complex tax rules, understanding different investment opportunities and creating a financial plan that incorporates your risk profile.

Written on 5 July 2023

As an expat, the more wealth you accumulate - whether through property, inheritance, bonuses or investments - the more complex your circumstances will become. While it is never too soon or too late to get a handle on your financial situation, as an expat, the sooner you create a wealth management plan, the better.

Expats face the additional challenge of understanding how relatively simple concepts like interest rates, inflation and foreign currency exchange are affecting their wealth across different jurisdictions.

With interest rates, inflation and foreign exchange rates being more volatile, the more wealth you have, the more these fluctuations will impact you and making positive decisions will get tougher and tougher.

Getting formal advice is imperative to ensure that your money and wealth is working for you, and finding a wealth manager who can assist you with tax, investments, general financial planning is crucial.

We have written this article to give you an idea about what needs to be considered when it comes to wealth management as an expat and also gives you guidance on how to find someone you can trust to manage and grow your wealth.

Decide your future financial and retirement plans

Regardless of whether you are an expat, effective wealth management requires you to set personal goals and objectives yourself. Your first step is to work out what you want to achieve in life and how you want to live.

Naturally, the older you get, the more responsibilities and commitments you will gain, whether that’s children, elderly parents, property or your own personal ambitions.

Top priorities might include ensuring their children get the best possible education and their parents receive excellent care.

But you must also incorporate your own ambitions – whether that’s owning your dream home, retiring early or travelling the world. Some people simply want to be as wealthy as possible so they can enjoy the best possible life.

To achieve any of these ambitions, you have to set yourself personal goals which you believe are achievable and aspirational.

Once you have established your goals you can set about working with a financial planner to understand how much money you will need to accumulate and to create a budget to achieve this.

Determine your tax obligations in each jurisdiction

As an expat, it’s vital to determine your tax obligations in each jurisdiction you have financial or personal connections to. Your tax residence status, for example, will in part determine which tax rules you need to follow with regards to your local and worldwide income and capital gains. A key misconception is that you can choose where you pay tax once you are in it, the best way is plan where to pay tax prior or adapt.

You will almost certainly have to incorporate your domicile in any consideration, even if you have no financial assets there. For example, British expats potentially will still be subject to inheritance tax -even if they no longer have connections to the UK. Similarly, American expats and people with US connections have a lifelong responsibility to the IRS which could also inhibit which wealth managers and financial advisors they can work with.

Your tax obligations will rarely be straightforward once you move abroad, so you should always ensure any wealth management considerations take your tax obligations into account before making any decisions.

See our specialist tax introduction services we offer >

Evaluate the state of your personal financial situation

As part of developing any wealth management plan, you will need to understand and document your current financial situation, including income, savings, property, investments.

You will also need to identify your non-negotiable financial commitments such as mortgages, food, energy costs, pension payments, healthcare expenses, childcare and any insurance costs.

In additional to your non-negotiable financial commitments, you will also have your general spending to consider and include in any budget. Understanding and documenting your regular expenditure will help you determine your disposable income.

Once you have a grasp of your personal financial situation, you will be ready to speak to an independent advisor who will be able to work with you to create a financial plan.

Understanding and incorporating risk

One of the most important factors of wealth management is incorporating your propensity to risk when making a financial plan.

Investments will always carry an element of risk and while some investment options might offer exceptional returns and growth, often these will be linked to highly risky and potentially fraudulent opportunities.

As an expat, your exposure to risk increases due to the lack of a global regulatory body providing standardised protections. In the UK, the FCA provides regulatory protections while in the US you will be protected by a combination of the FDIC, FRB and the SEC.

However, their regulatory authority is extremely limited beyond their own jurisdictions and advisors are not bound to follow their rules if they are not providing advice in those countries.

Factor in foreign exchange with international transfers

One major factor expats face when managing their wealth is the impact of foreign exchange when transferring either regular smaller amounts of money, or lump sums when moving capital to different jurisdictions.

With the global economic situation as it currently is, it is fairly common for currencies to make significant losses or gains in a matter of days or even hours.

Understanding how to make international money transfers to mitigate currency volatility is an important asset when developing a wealth management plan as a change in the value of one currency by even a few percent can have a significant impact on the value you are transferring.

Being able to lock in an exchange rate for several months, for example, could be invaluable if you are in the process of investing in property which could take between three and twelve months to complete.

Request a free introduction to a currency management specialist >

Get specialist wealth management and financial advice

For non-expats, it’s getting easier and easier to make investment and savings decisions with the rise of investment platforms and a wider range of investment options. Even as a non-expat it is still unadvisable to make financial decisions without seeking financial advice first.

Due to the international tax complexities, limitations on what financial products non-residents have access to and foreign exchange considerations, expats should never attempt to make financial decisions on their own.

Not only is an independent financial advisor educated to incorporate the international complexities expats face, they will also be considered “sophisticated investors” which means they will have access to financial products that are not available to everyone.

There are other highly regulated jurisdictions but making sure the firm is regulated to provide the sort of advice you require and has appropriate complaints and compliance procedure along with indemnity insurance is key.

Request introduction to an independent financial advisor >

What do typical expat wealth management services cover?

Expat wealth management will typically incorporate any or all of the following services, although you may have to work with several specialist firms to ensure all elements are covered.

Services typically provided by financial advisory firms:

  • Financial plan creation and budget management
  • Private wealth management in line with your personal objectives and risk profile (balanced, growth or aggressive)
  • Retirement and pension planning
  • Investment management, both passive and active
  • Access to non-high street investments and banks
  • Access to alternative investments
  • Discretionary Fund Management
  • Estate planning
  • Some tax assistance

Services provided by international tax specialists:

  • Tax residence status
  • Cross border tax optimisation
  • Tax returns and capital gains tax
  • Remittance advice
  • Trust management
  • Liaison with tax authorities

Benefits of getting wealth management advice

As you can imagine, the key benefits of getting expert wealth management advice is the assurance that you are making the best possible decisions in a highly complex and potentially volatile situation.

With the increased complexities expats face around tax, investments and foreign exchange ensuring that when you need to make big life decisions, you have a wealth management plan that has been developed with these objectives in mind.

Using wealth management services ultimately give you confidence that, regardless of potential issues, your financial situation will be able to meet your life goals, wherever your life takes you.

Speak to specialists to help with your expat wealth management

Our unique network of trusted partners, we can help with all aspects of your wealth management requirements.

Once you request a free introduction to one of our partners, we will evaluate the information provided to hand-select our most suitable partner to get in touch with you directly and offer an initial, no obligation free consultation. The free consultation will enable you to ask questions and get information guidance relating to your personal situation.

If you decide you wish to proceed with any services, our partner will provide you with a proposal which will outline the services which will be provided and any fees and charges. You'll be under no obligation to proceed, and our partners will not pressure you into working with them.

Request introduction to an independent financial advisor >

See our specialist tax introduction services we offer >

Request a free introduction to a currency management specialist >

Testimonials from people who have used our specialist IFA introduction service

I found the expert I was looking for and received excellent service.

Patrick N. United States, Investment Advice

I learned a lot from the consultant, including very simple things like what inflation is! He explained things very clearly and did not mind explaining simple things. I feel very well informed about all my options after talking to him. Thank you

Rosanna K. United States, Investment Advice

Timely, professional and humane, from the emails to the phone call, could tell the organization runs on empathy and really has a heart to help people

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