You’re either about to move overseas and embark on expat life or you’re already there. Or maybe, at the moment, you’re just researching. Either way, you’re probably here to figure out whether you need an International Financial Adviser. It helps to know exactly what an IFA can help with. So, we’ve prepared this handy guide.

Moving is already one of the most stressful things anyone can go through. But moving to a new country? That’s a whole different ballgame. Amidst all the chaos and emotional upheaval, you need to think about one very important thing: your finances.

Work visas, paperwork, finding a new home, schools, pets, saying goodbye to loved ones – it’s no wonder finances often end up on the back burner for many expats. But taking care of your finances and figuring out how to protect them when moving overseas should be one of your top priorities. Especially when your new country has different financial regulations than your home country.

So, what’s the best way for expats to manage their money while living abroad, whether it’s short or long-term?

Getting yourself a specialist International Financial Adviser is the key. We may be a bit biased since we ARE International Financial Advisers. But, there’s no way around it. Moving overseas makes managing your finances far trickier. And the financial advice you’ve received in the past may not be appropriate or specific enough to help you in your new country of residence.

Are the solutions you have in place still appropriate for you now?

What are your best options in terms of achieving maximum tax efficiency and financial structuring?

What would happen if you took ill while living overseas – or worse?

Are your family protected?

To answer all those questions – and many more – unless you are a financial adviser, you’re going to need one. And even if you ARE a financial adviser, you’re still going to need one who has international expertise.

Savings products advice

If you leave behind savings in your home country, it’s important to note that any interest earned on your savings accounts is considered income. This means you must report it while filing taxes in your tax residency. Other financial products you have overseas may also be subject to taxation.

There are many questions to answer surrounding savings for expats. Would you be better off with new local products over your existing ones? Or would you be better with global/offshore savings accounts? Can you still ensure you have access to your savings from overseas? Would you fall foul of exchange rate fluctuations if you did? Don’t wait until there’s an emergency to find out.

Life and sickness cover

One of the most critical issues an FA with international expertise can help you with is understanding what will happen to you and your loved ones if the worst happens. Life and critical illness cover will differ depending on your locale. So, you need an IFA who can help you ensure your family will be taken care of no matter where you are in the world.

Will advice and succession planning

Planning for your will may not be a pleasant thought, but it becomes even more crucial if you own assets in multiple countries. Each jurisdiction may require a separate will to ensure compliance with local laws. As an expat, your foreign property and estate will be subject to different regulations than those of your legal domicile. Seeking professional expertise in drafting your will or wills is highly recommended. This way you can determine which country’s laws govern your assets and how taxation on your legacy will be handled.

One of the most important financial planning considerations you should address when moving abroad is whether to keep hold of your current investments and assets.

If you’re only moving abroad temporarily, such as for a one-year work placement, it sometimes makes sense to leave your investments and assets in place. Conversely, if you are planning to live abroad for longer, it normally makes sense to transfer your investments via an IFA. As for your assets, it depends on your circumstances. You can work it out with your IFA.

One of the most googled questions surrounding expat pensions is “what happens to my pension if I move overseas?” And the answer is, usually, nothing. But these are all better questions to be asking:

“What happens if you contribute to your pension while living overseas?”

“What happens if you draw down on your pension from overseas?”

“Would my pension perform better if I took it with me overseas?”

If you ask an experienced IFA, they’ll be able to work it all out for you.

An IFA can help with tax planning for expats

Now, an International Financial Adviser isn’t a tax accountant. However, we definitely know a thing or 12 about how to ensure our clients are making tax-efficient financial decisions. Whether that’s understanding tax implications and the relationships between your domicile and country of residence, or the most relevant tax-efficient wrappers for your investments. Your IFA can help you make the right decisions.

You need an IFA to help plan for the Future

Future planning is essential for all of us. Not least those of us whose lives are complicated by the fact that we’re expats. Having an IFA on hand who knows how best to plan for your future is invaluable. Whether that’s because you’re working abroad and need to make sure your pensions are accessible and optimised. Or because you plan to return home someday and want to protect your assets. Or simply because you want to become accustomed to a certain lifestyle, AND then to ensure your family can afford said lifestyle once you’re gone.

Apart from assisting you in future planning, an international financial adviser can also lend a hand in handling specific life events. For instance, they can aid in planning for paying for your children’s education through international education systems or ensuring a comfortable lifestyle for your older child studying abroad.

Likewise, if you’re nearing retirement and uncertain about the pension or other sources of income you’ll receive, an international financial adviser can assist in determining the available pension income and other investment returns like stocks or bonds.

Assessing Current Plans

The first step in getting where you want to be is figuring out where you are today. Your IFA can take a look at your current financial situation to decide if what you have currently is suitable for your change in circumstances.

An IFA can also help discover if your change in circumstances has unlocked opportunities – or rendered certain financial solutions or products less suitable. If the latter is the case, your IFA can provide advice on how best to proceed with improved financial planning.

While all FAs have this as their goal, only an FA with international expertise can help you navigate the complexities of international financial planning.

An IFA Can Track Changes in the Markets and Products

It could be that since the inception of your current financial plan, there’ve been changes in the markets or products that determine whether your products or the associated costs or fees are optimal for your circumstances.

For example, you may have been paying for a certain level of mutual fund management service but now find that the same level of service is available at a lower cost. Or perhaps the fees associated with your insurance products have increased. An IFA can track these changes in the market and give you advice as to whether it’s time to make some changes to your current financial plan.

In addition, new products may be available on the market that weren’t previously available. These could include:

• New types of investment funds;
• Different types of insurance policies;
• Changes in currency exchange rates (e.g., if you have investments denominated in US dollars).

Peace of Mind

Peace of mind is the most important thing an expat can have. You want to be able to travel and experience new cultures, but you also need to know that your finances are in order. This is why an international financial adviser is so important for expats: they help ensure that your money will be safe wherever you go.

Getting financial advice has been shown to have major benefits – and we’ve got the stats to prove it. According to a study by the International Longevity Centre UK (ILC) in 2019, those who sought advice ended up with an average of £47,706 more in retirement (in pensions and financial assets) than those who didn’t. But that’s not all.

Mental health and well-being benefits

The ILC has done some follow-up research this year, and it turns out that financial advice might be even more valuable than we thought. Especially when it comes to mental health and well-being. Their report, “Peace of mind: Understanding the non-financial value of financial advice,” found that the non-financial benefits of advice can be just as significant as the financial ones.

Participants in the study who had taken financial advice reported feeling less anxious about their future, and more at ease knowing they had made proper preparations for their later years – even those who were already retired. They also felt more confident about achieving their long-term goals. By working with an advisor, they became more financially literate. This enabled them to understand how to achieve their goals. It left them empowered to make complex financial decisions for themselves. Being in control of their financial future in these ways left them feeling reassured and less anxious than they would have otherwise.

Given the additional stress involved with moving your life overseas, we’d say peace of mind has an even more crucial emphasis for expats than for the general population. One of the most stressful aspects of moving overseas is planning for retirement and your future financial security.

For individuals relocating to a new country, the question of whether to have two separate financial advisers may arise. Fortunately, the emergence of cross-border planning specialists offers a solution to this predicament. These experts can provide comprehensive financial guidance that spans different countries and jurisdictions, effectively eliminating the need for multiple advisors.

When seeking financial advice, choosing an adviser with proven international experience is wise. By doing so, you’ll avoid potential difficulties that an inexperienced adviser might inadvertently create due to a lack of awareness of certain global issues. Also, an adviser with international experience is more likely to anticipate and prevent problems whilst delivering financial solutions.

Be wary when seeking advice in certain jurisdictions

It’s really important to recognise that the quality of financial advice can vary greatly depending on the country you’re obtaining it in. If you’re used to getting financial advice in the UK, bear in mind that many aspects of financial advice there are regulated by the Financial Conduct Authority (FCA). Not all countries have a regulator. Even when they do, many advisers still don’t have to comply with their rules or meet the same standards as those in the UK.

Maximise your wealth across borders with Galileo Wealth – book your free consultation now.