As an expatriate, or an individual who might aspire to live the dream in a home of your own in the sun. You may be considering a lot of things financially, QROPS, UK pension transfers, overseas investments, SIPP’s, or advice on income tax or wills and inheritance tax, the list can be a long one. You may also be considering taking financial advice.
My name is Russell Hammond APFS MSCO, I’m a Chartered Financial Planner and Investment Adviser. I also practice as a chartered member of the personal financial society and am a full member of the chartered institute for securities and investments. I have extensive experience advising expatriates on investments and UK pension transfers. I would like to share with you some advice, and some tips that will certainly save you time, and may even save you money.
Regulation is important, check it, and double check it.
It can be easy for a company, or individual to appear professional and well-regulated, a slick website, an eye-catching logo or a smooth talking advisor may go some way to making you think you are dealing with someone reputable. However it is fundamentally important to check thoroughly that the person or company is well regulated to practice in the particular field of advice that you need. With a well regulated and client focused organisation or individual you can be certain of a service that is holistic, impartial and genuinely professional. Don’t be tempted by polished branding or an organisation that might just happen to be in the same town as you, a well-regulated advisor will make their selves available for you wherever they might be based, whether online or over the telephone. It is also a good idea to avoid firms based in less well-regulated areas of the world. The UK is one of the best.
Adequate capitalisation and indemnity insurance, in case things go wrong.
Consider the financial crisis back in 2008 and the financial uncertainty surrounding the UK’s withdrawal from the EU. Sometimes events beyond our control have an impact, it is rare but things don’t always go the way we plan, no matter how robust the plan. Check your potential advisors have adequate indemnity cover or adequate capitalisation, if they are good, and well covered, they will not mind proving the fact.
Qualifications are important.
The field of financial advice services is unique, at times it can be alarmingly easy for advice to be dispensed by a firm or individual not properly qualified to do so, financial advice comes in many different forms, across a wide range of fields. It is important to verify your advisors suitability for your particular field of interest. It is important to bear in mind that strong qualifications are no guarantee of instant success, but they can go a long way towards giving you a professional, impartial and considered service. Strong qualifications also mean an advisor will have the confidence to know when there is a need to liaise with other professionals to bring you the best possible service. Poor service can be down to many things, ignorance of proven investment practices, greed for commission, or just a lack of attention to detail. Again, any firm or independent advisor who is client focused will not mind you establishing their qualifications and suitability to offer you the advice you need. If possible try to work with a financial adviser that is Chartered. Chartered status means that they are at the very top of their profession (in the UK top 10% of advisers are Chartered, advisers working with expats around 1% are Chartered) for knowledge acquisition and professional development.
Choose fee-based advice over commission based advice, every time.
Any financial advisor worthy of the name should expect to practice on the basis that they only receive a fee for as long as the client is happy with the service that is being provided to them. Commission-based advice goes against everything a client-focused, impartial advisor stands for and, in truth, should be outlawed worldwide.
The above statement may seem harsh, but I make no apologies for it. I regularly come across heart breaking and disgraceful examples of clients being taken advantage of by commission-hungry sales people who work hard to miss-sell an image of professionalism. Only for the client to be cast aside and forgotten about later down the line, resulting in a client that is beside themselves with worry and a portfolio that is both expensive, inconsistent and stands no chance of generating robust and consistent long-term returns.
Offshore Bond Structures.
Professionally, I am not against the idea of using offshore wrappers, such as those provided by Old Mutual International (OMI). A large percentage of my clients use them. However, it is essential that the client must always opt for a non-commission structure, from OMI or other provider. Always bear in mind that a fee-based advisor has little or no allegiance towards any company or financial institution and essentially, they’re not looking to earn commission. The focus for a fee-based advisor is best performance, the most cost effective structures and long-term client satisfaction. I cannot stress enough, the importance of insisting that your financial advisor operates on fee-based terms, with no minimum periods of investment, and no lock-in or exit fees.