Expats are often financially advantaged when they move to live abroad. Which is fortunate as most don’t have the support of any state sponsored social security programme as soon as they leave their old nation behind. As an expat yourself you’ll be only too aware of the complex money matters that you have to juggle – from having tax liabilities in more than one country for example, to needing to self-fund everything from pensions to schools fees for your children.
All of these aspects and elements have to be taken into consideration on a case-by-case basis when a wealth manager looks at an expat’s financial position in life. Which is why expatriate wealth management is a complex field of financial planning. Those in the industry who perform well for their client base are well-remunerated as a result, but they do have to work hard for their money.
In order to enable you to see exactly how you might benefit from a review of your position by a professional adviser, today we’re breaking down expat wealth management into every life stage. So whether you’re a professional working hard to get ahead, you’re an expat parent or you’ve take retirement abroad already, you will be able to see how your wealth may be better managed to give you enhanced returns.
An interesting feature from Escape Artist introduces the concept of having different wealth management strategies depending on your life stage. It’s focused on American expatriates however. But if we take the concept and expand upon it specifically for Britons abroad, we come up with four key stages when an expat could potentially benefit from an overhaul of their money’s management: –
Expat Wealth Management for Working Professionals
As stated above, once you take the bold step to go abroad to improve your career prospects and earnings potential, you step away from the safety net of your old home nation’s social security blanket.
This fact doesn’t seem to be deterring Britons from moving overseas to work however, as a recent article in the Telegraph reveals that one in three Brits wants to quit the UK to work abroad.
The British economy and labour market’s prospects are dire – opportunities to work abroad are therefore very appealing. And for professional Brits working abroad some of the key expat wealth management considerations relate to: –
- Intensively saving excess wealth to get ahead financially speaking (particularly of interest to expats only planning to remain working abroad for a fixed/limited period)
- Perhaps taking a higher risk approach to offshore investment opportunities (sometimes a suitable approach for those a long way from retirement)
- Structuring a flexible long-term solution for saving and investing towards a pension and retirement
If you’re working abroad you have many interesting opportunities available to you for saving and investing your money. Perhaps you also have a long time until retirement and so you can intensively and cleverly invest your money, taking all opportunities for tax saving or deferral on gains accrued.
Take advice sooner rather than later from an expat financial adviser; they will help you make the very most of your money whilst you remain working overseas.
Expatriate Wealth Management for Parents Living Abroad
For parents planning a relocation abroad, the number one concern is ensuring that their children integrate and adapt to the relocation. An element of this concern relates to ensuring a smooth transition into a new school abroad for those parents with school-age children.
Many parents favour an international school education for their children, and we’ve written a guide to choosing an international school for your child in our Living Abroad section that may be of help to you. However, international schools are not cheap – and when it comes to education abroad you often get what you pay for.
Therefore, for parents abroad their expatriate wealth management considerations may relate to: –
- Looking at offshore investment strategies to fund education – i.e., saving to afford an international school and university education for children
- Utilising any higher interest or tax advantaged offshore savings solutions specifically for children
- Having the right health and life insurances in place for the protection of the entire family
Whether your children are already in the school system and you want to find a way to continue to afford the best education for them, of you’re looking to plan ahead for their future needs, a good expatriate financial adviser will assess your life goals and find you a way to manage your wealth appropriately so that you fulfil your goals.
Expat Wealth Management and Pension Planning
It is never too early to think about pension planning. However, when you move abroad and leave the UK behind you also leave behind any tax breaks you can get on your British based pension.
The good news is that there are specific international pension options for expats including QROPS (qualifying recognised overseas pension schemes). These allow you to transfer in your previously saved British private pension pot and continue to save towards your retirement.
Our guide to QROPS critical considerations will help you determine whether these pension schemes are right for you. But if not, the good news is that there are many other onshore and offshore savings and investment products and solutions that can be used for long-term saving towards a retirement income.
Speak to an adviser as soon as you can to assess the best method of approach based on your own personal circumstances.
Expat Wealth Management and Retirement Abroad
For those lucky enough to have retired abroad already, expatriate wealth management considerations are likely to include the following: –
- Ensuring any private pension pot will deliver the best retirement income possible
- Taking any tax advantages available to ensure retirement income goes further
- Ensuring health insurance is in place, and is adequate and affordable
- Structuring income producing assets so that they are not eroded by inflation, taxation of currency conversion costs
Wealth management is big business, because many elements of our lives seek to erode our personal wealth. From taxation to inflation, from our government funding wars to an individual’s need to afford a decent education or healthcare for example. JP Morgan, one of the largest active asset management companies in the world has just launched a brand new wealth management division – proving just how fast growing this aspect of financial planning is.
As an expatriate you really do have many advantages that can benefit your wealth’s management – but you need to actively seek advice from professional offshore / expatriate financial advisers to ensure that you find the right products, services and solutions for your money’s management on an individual basis.