The Cost of Expat Financial Advice
Financial advice is an invaluable
service, particularly for expatriates navigating the complexities of living
overseas in a country with a different tax regime, social security system and
currency. However, thousands of expats do not access professional financial
support, often because of an assumption that a skilled financial adviser will
be unaffordable.
One of the many considerations is that
the role and focus of a financial adviser is to help you make good judgements,
to preserve your wealth and improve your financial position – the fees payable
will typically be a fraction of the amount you may save by avoiding inadvisable
decision-making or choosing high-risk investments.
In this article we explain how expat
financial advice costs vary and explore some of the reasons hiring a financial
adviser may be the best investment you can make.
Factors That Influence the Costs of Expat Wealth
Management Advice
Costs are, of course, important, and a
credible wealth management for expats
firm will provide transparent fee structures and information before undertaking
any work. Many local financial advisory teams will offer complimentary initial
consultations to help you assess the knowledge on offer and discuss potential
fees related to the advice you require or tasks you’d like a financial adviser
to undertake.
Chase Buchanan does not provide
standardised fees for the simple reason that every client is different and will
need alternative advice and assistance adapted to their financial goals and
aspirations. As a rough indication, wealth management costs are an average of
between 1% and 2% of the assets under the supervision and management of a
portfolio manager.
There are numerous variables that will
affect the cost of professional expat financial planning and advice, which we
explore below.
Scope of Financial Advice
Meeting with an adviser as a one-off
to seek guidance about an individual transaction or ad hoc property purchase
will carry different fees from an ongoing service where you work closely with
your adviser to create a long-term investment and wealth management strategy.
Most accomplished wealth managers and
advisers collaborate with clients over many years, getting to know their goals
and aspirations and adjusting their services as their clients’ wealth grows or
investment markets shift.
The Complexity of Your Affairs
Many expats need specific advice about
restructuring assets, transferring pensions to a new country or establishing
tax residency status. The more complex and intricate your financial planning
needs, the more time an adviser will spend evaluating options and crafting
projections and outlines to showcase the detail of the products or approaches
they suggest.
Tasks Assigned to a Financial Adviser
Many financial advisers will offer a
broad scope of services, from arranging tailored insurance coverage and education
fee planning to more in-depth financial planning and tax management. If an
expat hires an adviser for a particular task, such as facilitating a UK pension
transfer and advising on the best-suited options or setting up a trust and
helping them write a will, this will carry a different cost than ongoing estate
or succession planning.
The Quality and Experience of Your Adviser
As in any professional sector, the
more capable and experienced your financial adviser or wealth manager, the
higher their fees may be in relation to the services provided. However, along
with this level of proficiency comes the assurance that the advice you receive
will be highly specific, independently assessed and designed to deliver the
best possible outcomes for you.
The variations in regulatory standards
around the world can also mean that local advisers are not bound by the same
codes of conduct as in the UK, so it is important to research any prospective
advisers and be satisfied they are competent and qualified.
For example, an adviser representing a
bank or lender can only suggest products that the institution provides, and
some businesses referring to their services as ‘financial planning’ may not be
subject to regulatory oversight.
Chase Buchanan always advises expats
to work with regulated, independent and established financial advisers to
ensure the recommendations they receive are tailored to their requirements and
take into account the full picture of their financial and residency status.
Risks of Making Financial Decisions without Professional
Guidance
An HSBC report found that only a tiny
proportion of expats seek help from a professional financial adviser – 91% go
it alone and make decisions based on their own assumptions, personal research
or instincts.
The cost of either underpaying for
low-quality advice or making consequential decisions about your financial
affairs can be extremely high, as demonstrated in the same report, which shows
that expats find their finances difficult
to manage, with 52% of those saying it was due to their tax situation.
Among the most prevalent goals, 60% of
expats surveyed said retirement planning was one of their primary objectives.
Yet, without bespoke expat financial advice, it is highly unlikely they will
have full access to the breadth of pension planning and investment products
available, many of which offer tax efficiencies and other advantages.
Assessing the True Value of Expat Financial Advice
The value of your expat financial
advice and the fees payable are not always directly linked. It is vital that
any advice you rely on to make hugely impactful judgements, such as choosing
how to manage your pension funds, understanding tax obligations, buying a
property overseas or transitioning an investment portfolio, is valid, relevant
and accurate.
With more and more people choosing to
relocate to seek better living standards, a warmer climate and career
opportunities, the knowledge available from experienced advisers specialising
in expat wealth management can be impossible to quantify.
Advisers map out your wealth, assets,
income and tax status, provide detailed suggestions to explain various options
and the pros and cons of each, and offer advice to ensure any decisions you
make benefit your overall finances and are consistent with your aims.
Our article evaluating the Value of
Your Financial Adviser during a Crisis provides further insights. It explains
why your adviser’s support and suggestions can be necessary to making sound,
informed decisions about your finances and wealth, particularly during
difficult periods.
For more information about expat
financial advice, tax and residency guides, services or the indicative fee
structures linked with portfolio management, please get in touch with your
Chase Buchanan Wealth Management local office at your convenience.
Original Source: - The Cost
of Expat Financial Advice
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