This article will review more of Novia Global from the perspective of UK expats, as opposed to people who are living locally.
It also make sense to review your policies if you have a Novia Global and aren’t happy. Our view is that better options exist for most people.
My contact details are hello@adamfayed.com and WhatsApp +44-7393-450-837 if you have any questions.
The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
Rolled out in 2015, Novia Global is a relatively new global wealth management platform in the expat market that’s registered in England and Wales. It is regulated in the UK, under the Financial Conduct Authority, and is also widely sold in Dubai and Hong Kong and various EU countries.
They use discretionary fund managers such as Brooks Mcdonalds, Ashburton Investments and Bordier & Cie.
You are given the ability to keep track of your investments in real time by using the Novia Global platform, which also provides a completely digital and automated reporting and valuation services.
When you make an investment using the Novia Global platform, you will be prompted to create a Novia Global account. This is a safe internet-based account that will assist you in controlling and managing your use of the tools that they have specifically designed for that purpose.
Because it is hosted online, you can access it whenever you like by navigating the company’s website. Additionally, it gives you access to information regarding all of the investments that you currently have in your portfolio.
It is possible to hold multiple products within a single Novia Global account at the same time. This allows customers to make the most of the numerous product structures, currencies, and asset management options that are available.
The actual Novia Global platform cost can be as little as 0.2% a year. Once you add the costs of the advisory fees (and asset management fees) however, and you can be charged up to 4%-5% per year, depending on which options are chosen by the advisor and client.
This is one of the reasons why some clients get better returns than others. Client one could be in index-linked investments charged at 0.1%, whilst another client could be in expensive investments with hidden fees.
Many advisers also charge a 2% to 3% set up fee as well.
The Novia Global Investment Platform charges start at 0.30% and decrease to 0.25% for investments exceeding $1 million.
Additionally, Pershing, the custodian service provider, charges a fee of 0.04%. The total fees, excluding adviser or fund costs, amount to 0.34%, which includes both the platform fee and the custodian fee imposed by Pershing. This combined fee structure is among the most competitive in the market.
For transactions involving foreign exchange, Novia Global sets its fees at a fixed rate of 0.20% per transaction, without adding any additional spread. This transparent approach to FX fees is beneficial for clients dealing in multiple currencies.
While Novia Global allows advice firms to charge up to 5% initial fees and 1.5% ongoing fees, the actual fees can vary depending on the chosen financial advisory firm.
Index tracking funds on the platform, such as ETFs, start with fees as low as 0.08%, while active funds can charge up to 1.8%. The use of Discretionary Fund Managers (DFMs) can add an additional 0.15 – 0.35% to the ongoing costs.
Novia Global’s SIPP (Self-Invested Personal Pension) costs are notably competitive. In recent updates, Novia announced a reduction in platform charges, further enhancing its appeal to investors seeking cost-effective pension management options.
Novia Global upholds high standards of transparency in its fee structure. Complying with MiFID EU regulations, Novia Global provides detailed quarterly transaction statements to its clients. This level of transparency ensures clients are fully aware of all costs associated with their investments.
Novia Global’s cash facility that allows you to store enough money to cover any fees that may become due in the near future are not intended to function as interest-bearing accounts in which you can seek interest-bearing returns. As a result, Novia Global retains all interest on monies that are held in the cash facility.
Advisers, private banks, and trust companies, as well as their customers, can take advantage of the platform service offered by Novia Global.
The platform provides access to more than 7,000 funds managed by over 300 different fund managers in addition to a diverse selection of investment options, such as retail and clean share classes, daily and non-daily dealt funds, exchange-traded funds (ETFs), Undertakings for Collective Investment in Transferable Securities (UCITS), Societe d’Investissement a Capital Variable (SICAVs), alternative investments, as well as direct investment in equities and bonds.
In addition, they provide alternatives such as accounts in multiple currencies, structured offerings, individual stocks, and a number of other types of investments to choose from.
You have the ability to invest in US Dollars (USD), British Pounds (GBP), Euros (EUR), Swiss Francs (CHF), Australian Dollars (AUD), and Hong Kong Dollars (HKD) through the Novia Global platform.
There is a cash facility present in each of the currency holdings. This not only holds funds for the purpose of investing and withdrawing, but also provides liquidity within the account. The cash facility will have the money from sales and dividends from the particular currency holding paid into it. The money from the cash facility will then be used to pay the relevant fees and charges.
In order to fulfill these commitments, the cash facility will be required to hold at least 2% of the value of the currency holdings at all times.
Novia Global is responsible for managing all cash and investments in a manner that is compliant with the client money rules established by the Financial Conduct Authority.
Unlike some other options, the minimums aren’t published on the Novia Global website, but most people start with at least $10,000 — with $50,000 to $250,000 being an average client investment size.
Money can be invested and pulled out, without penalty, at any point, depending on the charging structure picked on day 1 and which funds are selected.
Some funds have exit penalties, whilst others do not.
When investing with Novia Global, it’s essential to consider the tax implications in your country of residence. Different tax jurisdictions have various rules that could significantly impact your investment returns.
For instance, while Novia Global’s platform is considered tax-efficient in most locations, when you withdraw funds, Capital Gains Tax (CGT) may apply depending on your country of residence. It’s vital to consult with a local, regulated tax expert for personalized advice on these matters.
Regulatory compliance is another critical aspect to consider. Novia Global is authorised and regulated by the Financial Conduct Authority (FCA) in the United Kingdom, ensuring adherence to strict investment criteria and regulatory standards.
This compliance offers a layer of security and reliability to investors, safeguarding their interests.
Given the complexities of international taxation, obtaining professional financial advice is imperative.
A knowledgeable adviser can help you understand the tax implications of your investments with Novia Global and ensure that your investment strategy aligns with your financial goals while adhering to tax regulations in your jurisdiction.
Working closely with customers has shown that the current assumption is that no tax liability is present in most locations as long as the funds remain within the platform and are not withdrawn. If you were to withdraw the money, you might be required to pay capital gains tax (CGT) to the government of the country in which you currently reside.
In order to acquire additional information regarding the taxes that are relevant to your Novia Global account, you may wish to double-check this information with a tax specialist.
Novia Global’s fee structure is competitive, especially for larger investment amounts. This competitive pricing positions Novia Global as a strong contender against other platforms like Vanguard and Fidelity, particularly for substantial investments.
Novia Global provides a comprehensive investment choice that caters to the needs of diverse investors, offering multiple asset classes from over 300 leading fund managers. However, Novia Global is not available to US-connected individuals, a limitation that some other platforms do not have.
Novia Global’s platform is known for its user-friendly interface, allowing easy access and management of investments.
The platform enables real-time monitoring and offers a full range of automated online services, including reporting and valuation in partnership with Financial Express. This technology integration enhances the customer experience by providing detailed fund analysis and performance data.
When compared to the Morningstar Wealth Platform, Novia Global stands out for its low-cost structure and a wide range of investment options.
Morningstar, on the other hand, offers a broader range of services and caters to US-connected individuals, which Novia Global does not. Morningstar’s platform fees vary significantly based on the investment value, with fees being lower for larger investment values.
Both platforms do not have exit penalties or a minimum investment period, offering a high degree of flexibility to clients.
Novia Global’s fully digital platform is efficient for advisors managing client investments, while Morningstar integrates with numerous custodians and offers extensive investment research tools.
Novia Global has shown robust financial performance, with a significant increase in pre-tax earnings. This growth reflects the platform’s efficacy and appeal to its user base, underlining its position as a reliable and effective investment platform.
This depends on the time period you pick. In recent years, US markets have done better, with emerging and UK markets underperforming.
That won’t always be the case though.
They have an international Self-Invested Personal Pension (SIPP) and a General Investment Account. The SIPP is often used in tandem with British expats overseas.
Let’s get a closer look at each product below.
The Novia General Investment Account gives you the ability to contribute an unlimited amount of money to a single account.
The International SIPP is an affordable and registered UK pension scheme that has been made particularly for non-UK residents, as well as foreign nationals who live in the UK. Its purpose is to offer wide selection of choices for investment and flexible retirement benefit. This product is only available through the Novia Global platform and cannot be purchased anywhere else.
Even if you have already begun drawing income from the pension scheme you are transferring from, the Novia Global International SIPP can still accept transfers from your other pension plans that are registered in the UK or a Qualifying Recognized Overseas Pension Scheme (QROPS).
This implies that if you have previously made provisions for your pension, you will be able to consolidate those provisions within an International SIPP. Transfers from other pension schemes into an International SIPP is not counted against the Annual Allowance.
The designated death beneficiaries of a Novia Global International SIPP will typically receive death benefits that are typically paid out by the plan and exempt from UK inheritance tax irrespective of the beneficiary’s age.
In the event that you pass away prior to reaching the age of 75, the entirety of your Novia Global International SIPP can typically be distributed either as a one-time lump sum or as an ongoing income stream. There will be no income tax imposed by the UK government on the benefits that are provided to the beneficiaries.
In the event that you pass away after reaching the age of 75, any remaining money will be distributed to your beneficiaries either in a single sum or as a stream of payments over time. Any benefits that the beneficiaries obtain will be subject to income tax in the UK at the beneficiary’s applicable marginal rate. The pension benefits will not be a part of the member’s estate for UK Inheritance Tax (IHT) purposes.
The Model Portfolio Manager (MPM) tool gives discretionary fund managers (DFMs), private banks, trust firms, and advisers the ability to take complete operational control over their model portfolios by creating and managing them online.
Investment advisers, private banks, and trust firms will be able to construct portfolios and start using them within an hour of submitting them.
Additional capabilities include:
If you are a client of Novia Global internationally and you aren’t satisfied with the returns, there could be two reasons for this.
First, it could be that markets aren’t performing well, which can’t be helped in the short-term.
In comparison, the second reason is that bad funds have been picked. In which case, it should be much easier to make the account work more efficiently.
Novia isn’t a bad platform in the expat market. However, their fee structure can still be high, and your “mileage will vary”. What I mean by that is your success will depend on your adviser and your own investment behavior.
It is important to note that the value of your investments can fall and you may get back less than you have invested.
The UK regulation is a negative thing for most expat investors, as it will restrict what kind of assets you can buy.
For most investors, better options exist.