Expat investments post-Brexit
Written by E4E Editor on 24 June 2016
As the results came through one by one, the UK gradually moved away from the European Union.
Experts had warned in the weeks and months before the final result that the one indicator which would show us the mood of investors was the valuation of GBP against the Euro and USD.
As it turns out, the pound crashed, reaching levels not seen since the 80s, losing up to 10% of its value.
The economic shockwaves didn’t end there. The FTSE took a massive hit when trading began early in the morning.
The markets then went on a mini-revival as various news items filtered throughout the day.
What does Brexit mean for your investments?
However, one question which was at the forefront of peoples’ minds was, what does this mean for my investments?
Many expats either have assets in the UK, such as property and pensions, which could also earn them an income. There’s often a natural reaction to run from a declining market, to get out before the going gets worse.
However, our view is that this is a hit. It may be a long term hit and often the kneejerk gut reaction is not the most profitable, especially during a period of high emotion.
Similarly, the reaction from some of the more unscrupulous advisers would be to pick up the phone and target British expats in an attempt to get to part of their money. After all, fear can be a great motivator.
But as with our earlier article, our key bit of advice is not to panic and to try to research any decision rationally, speaking to independent experts where appropriate.
It’s quite possible that in the coming days, expats will be contacted with offers of exceptional returns, or away from the uncertainty of the UK. That maybe through the transfer of a pension, re-investment of savings or releasing equity in property to invest elsewhere.
None of these ideas are necessarily bad, however, in every case it will depend on the individual in question, their personal situation and their risk tolerance.
Best advice: stay calm
Our recommendation is to remain calm. Don’t sign anything without getting a second opinion, and certainly don’t transfer any money.
If you do decide to go ahead with an investment decision, ensure you have had at least two pieces of independent advice, but also – and probably more importantly – ensure you fully understand the fees and commission structures before signing anything.
Offshore advisers are not regulated in the same way as the UK, no matter what they may say, and therefore they are not required to charge a fixed fee, meaning that any investment could be diminished by a large commission fee which may be taken out of your asset.
Also be sure you understand any risks around the length of agreements. Again, there is no one size fits all investment vehicle in the market and your personal circumstances will dictate the best course of action. However, in times of increased uncertainty, short term investment “sprints” are incredibly risky, and often the biggest winners are those who stay abreast of events, but invest for the longer term – negating any aftershocks which may occur.
If in doubt, request a free consultation with an independent adviser
But, above all else, if you are in any doubt, get a second or third opinion. If you’re unsure who to ask, we can put you in touch with independent experts in the UK and abroad who will be able to offer a free consultation to get a better understanding of your circumstances.
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