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Whether you are planning a relocation abroad or already live overseas, transitioning to a new country comes with a myriad of considerations related to your finances. That might mean opening a new bank account in a different currency, transferring pension funds, registering for tax and social security contributions and making decisions about managing your investments.

Risk management is a fundamental part of any investment approach, where you identify risks vs rewards, select investments based on your core priorities, and restructure or diversify your portfolio over time in response to evolving risks or changing objectives.

For expats, this becomes even more essential. Even if your overarching aims remain the same, the tax climate, investment options, and management of existing portfolio assets may change substantially when you become a tax resident in another jurisdiction.

What Are Expat Investment Management Services?

Investment management is a straightforward concept where a wealth manager or your appointed fund manager oversees your portfolio and provides regular performance reports. A large proportion of retail investors delegate portfolio management to an experienced investment manager since this involves continued market tracking and sometimes swift reactions when an index, stock market or currency falls or climbs.

Having this depth of knowledge is useful in making wise, timely decisions and understanding what modifications you might wish to make to your portfolio should your time horizons change or a shift in circumstance mean you want to draw down on some of your investments.

Depending on your country of residence, you may find that your investment options are more limited in some jurisdictions than others due to smaller investment markets – but you may also discover that new options or offshore investment products present a good opportunity.

Skilled wealth managers specialising in expatriate financial advice blend the conventional role of an investment manager with that of a financial adviser, providing valuable information about the local markets, helping you align your investment strategy with your change in location, and adjusting your portfolio to ensure you access any tax efficiencies that may be available.

Their role is to monitor the performance of your investments, plot those returns against your financial objectives, and offer guidance about any decisions you may need to make. An investment manager may also recommend new products or offer advice if you are interested in an emerging market, for example.

Common Challenges for International Expat Investors

One of the primary reasons we’d always recommend you seek independent advice from a knowledgeable financial adviser or wealth manager with investment management experience is that investing as an expatriate might mean your risk profile changes significantly.

Aside from the inherent risks involved in any form of investing, you could inadvertently amplify risks if you relocate to another country without considering your portfolio asset allocations or tax exposure. For example:

  • Do you know how returns, whether dividends, interest or profit shares will be taxed, and whether the location of a particular investment will impact your tax liabilities?
  • Will you be able to continue participating in a certain investment market as a foreign national resident, or will regular contributions into a high-yield account need to stop?
  • Are your returns paid in your currency of choice, or will you have to factor in exchange rate fluctuations that could affect your net investment returns?

We often consult with expats who also have different financial objectives following a relocation, perhaps because they have moved abroad as part of their retirement plans or want to revisit their investment risks to generate more stable long-term returns for their families.

Regulations, taxation and investment rules differ between countries, so even the most experienced UK-based investment management firms may not be suited to expatriate portfolio management. Understanding the tax environment, the financial impacts of a move to another country, and aligning advice with your goals are all important.

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How to Manage Investment Risks as an Overseas Expat

All investment decisions are personal, and the first step to mitigating any risks is to establish your primary aims and your current asset allocations, including property assets, overseas products, or equity investments. This simple task may highlight immediate areas for improvement, such as where the majority of your investments are within the same market, jurisdiction, or sector.

From there, risk management is all about examining the scope of your portfolio and the asset classes and investment structures that may prove beneficial, either as standalone investments or to diversify your existing portfolio to make it better balanced.

Expat investment managers can also assist with areas outside of your portfolio, which may relate to:

  • Regulatory standards in a new country of residence, including any specific rules or restrictions applied to investments or products based in another country.
  • Tax planning, where investment returns may attract different taxes, particularly in countries with a wealth or property tax.

Well-managed investments ensure you gain exposure to high-growth or high-return markets and products without accepting a level of risk that you feel uncomfortable with and can look at the best ways to protect your wealth from volatile markets, fluctuating currency exchange rates or other risks.

That could mean introducing passive investments with assured returns over a longer time period, adjusting your cash capital as a contingency fund, or deciding whether property assets with a high tax burden attached should remain part of your portfolio.

Professional Expat Investment Management Guidance

Chase Buchanan’s Private Wealth Managers across our network work with expatriates at every stage of life, before and after relocations, and when assessing how life events such as retirement should impact their approach to investment.

We support individuals and families throughout Europe and North America, providing advisory assistance on all financial matters from tax management to investment, estate planning to insurance, breaking down complex decisions and ensuring you understand all of the options available to you.

Please contact Chase Buchanan at any time for more information about managing investment risks as an expatriate, understanding how your risk exposure may change along with your country of residence, or why independent advice may be key to long-term financial protection.

*Information correct as at April 2024