Last Updated on 10th September 2024
Investment management support is a key service for any expatriate living overseas or planning an international relocation.
Whether you are trying to figure out how to manage, transfer or restructure your assets, want to know if there are comparable investment products in a new destination, or are concerned about the tax liabilities linked to your investment income, a skilled adviser can assist.
However, investment management is also a broad field, with varied services, support and guidance that may be beneficial. The overarching aim is to ensure you have control over your finances, develop a personalised strategy to manage your wealth and comprehend the aspects that may impact your investment options as an expat, from exchange rates to inflation and tax exposure.
Here, we’re explaining how investment management works, why it is an important professional service for millions of international expats, and sharing insights to ensure you select an adviser who has the knowledge, skills, and expertise to help you manage and grow your wealth.
Investment Management Support Explained
The investment management sector is as diverse as the products, schemes and funds you may have within a well-diversified portfolio. While our services are always adapted to your core requirements, they could include:
- Setting investment goals
- Tracking product or fund performance
- Advising on emerging risks
- Recommending opportunities
- Reviewing your risk profile and exposure
- Structuring pension funds and retirement plans
Professional investment managers can help with asset allocation, selecting stocks or products, monitoring the performance of your current investments, updating your portfolio strategy, and implementing changes you wish to make with ongoing reporting and in-depth market analysis.
The essential factor is that investment management is customised to you, coordinating your investments and portfolio with any other assets, income streams or products you hold and ensuring they are compliant with your long-term goals and requirements.
Most expatriate clients begin by reviewing their existing portfolio, checking whether their current assets comply with the applicable rules and regulations in their country of residence, analysing whether those products will continue to generate level anticipated returns following a relocation, and assessing any changes that may be necessary to align with the individual’s goals and risk appetite.
Investment management isn’t a one-time service, but should be based on long-term support, making astute changes over time in response to fluctuations in the relevant markets or changing priorities.
The Importance of Expert Investment Management Services for Expatriates
Wealth and investment management are two different components of the same professional service—helping clients invest and manage their incomes, taxation, and wealth, using our experience to make recommendations backed by data, analysis and forecasts to ensure expats make confident, informed, and independent judgments.
For expats, there are typically added complexities around currency exchange rates and adapting their investments to ensure they remain tax-efficient.
Our wealth managers and investment advisers can provide insights into:
- Your tax residency status and why this could impact your total tax exposure.
- The differences in taxation between jurisdictions and where there are opportunities to adjust or restructure assets or products to utilise advantageous tax reliefs or exemptions.
- Planning for asset disposals and transfers and calculating the arising tax charge.
The suggestions we make will also depend on your domiciliary status, particularly for US citizens who remain obligated to file returns with the IRS, and who often require specific guidance to ensure they know how this will affect their reporting and taxation responsibilities.
Foreign Exchange Rates and Expat Investments
Although foreign exchange rates are an inevitable part of managing an international portfolio or transitioning assets and funds to another jurisdiction, they can also significantly affect the value of immediate and long-term returns you receive.
Exchange rates can, for instance, reduce the value of returns transferred from one country and currency to another or influence the ideal timings to transfer a larger lump-sum capital payment to a different jurisdiction.
Currencies can be volatile, and rates can shift considerably within as little as a few hours, so it’s important to look at ways to mitigate or remove currency risks and ensure you have certainty about the expected value of your returns, income, or dividends.
The right advice will depend on the type of transfers and products you hold. However, if you are planning an international move and have sizeable capital wealth you’d like to transfer, locking in an advance currency rate could be adviseable.
Why UK-Based Investment Management May Be Unsuitable for Overseas Expats
One challenge for expatriates is that the risks, opportunities and taxation considerations relevant to their investments may differ considerably once they relocate due to myriad influences, such as:
- Domestic and international economics
- Changes to currency exchange rates
- Inflation and volatile interest rates
- Variations in the cost of living and investment return expectations
Tax exposure against investment returns, dividend incomes, foreign-sourced earnings, and the sale of investment assets will depend on your country of residence, your tax residency position, and the location of the products and funds within your portfolio.
There are also issues around the regulatory environment in some locations, where investment advisers, managers or consultants operate within a limited scope or can recommend only products from specific providers.
Some investment professionals may also have little or no knowledge of cross-border taxation or how a particular fund or product may influence other aspects of an expat investor’s portfolio and overall wealth.
Our advice is always to consult an experienced, accredited, regulated wealth manager or investment adviser with the necessary understanding of taxation in both the UK and your country of residence and who can provide bespoke investment management services specific to your financial position, aspirations and expectations.
We hope this guide has illustrated how investment management works, why it is so relevant for expatriates living in any international destination, and the importance of up-to-date, dependable guidance to help you make informed decisions when managing your investment products, assets and portfolios.
For further assistance, please get in touch with your nearest Chase Buchanan office.
*Information correct as at August 2024