Expat financial advisors in Hong Kong – what are your options?

Expat financial advisors in Hong Kong – that will be the topic of today’s article.

I will compare some of the options available locally, alongside more portable, online, and international options like what we offer.

Nothing written here should be considered as any form of legal or financial advice, and isn’t a solicitation to invest.

For any questions, or if you are looking to invest as an expat, you can contact me using this form, or via the WhatsApp function below.

It makes sense to have a portable option as an expat, as opposed to a localized one, and that is something we specialize in. 

Introduction

Planning to move to Hong Kong? A former British colony until 1997 when it was returned to China, this dynamic city has a unique history. The local culture is a mixture of British heritage and Chinese roots, reflected in architecture, street names, afternoon tea and double-decker trams.

Today Hong Kong is not a city or a country, but a special administrative region of the PRC. According to the principle of “one country, two systems” developed by China for Hong Kong and Macau, Hong Kong has broad autonomy in most areas – it has its own legal and tax systems, economy, migration regime, currency and much more. China is only responsible for defense and foreign policy. According to this principle, Hong Kong will exist until 2047, after which it will become part of the PRC, but under special conditions. However, already now, every year China’s influence on Hong Kong is increasing.

But still, Hong Kong is very different from China. Locals don’t like being called Chinese. Even the Chinese language is different here – in China they speak Mandarin, and in Hong Kong they speak Cantonese. In China, few people understand English, and in Hong Kong it is the second official language. Also in Hong Kong, unlike China, all messengers, social networks and Google work, and any application can be downloaded in two languages ​​- Chinese or English.

Thus, Hong Kong is a mixture of East and West, an Asian metropolis with an international character. Everyone will find something of their own here. In this article, we have collected the main pros and cons of living in Hong Kong, which will be useful for those who are thinking about moving to this metropolis.

The pros of living in Hong Kong

Well-developed transport system

The public transportation system in Hong Kong is very efficient and convenient – most places can be reached by metro. Some of the finished areas can be reached by buses. There are also trams, ferries, taxis and trains. Taxis are relatively inexpensive, especially when compared to Tokyo or even some cities in Western Europe. Apps like Uber also work.

The metro and buses run frequently, so you won’t see people chasing the bus here, because the next one will arrive in a couple of minutes.

Varied food

Hong Kong has a wide variety of restaurants offering a wide variety of food, from inexpensive and delicious street food to Michelin-starred restaurants. According to statistics, there is one restaurant for 600 people. Tourists and locals alike line up to sample the world famous dim sum, mouthwatering brisket noodles, delicious egg tarts and pineapple buns. Even true gourmets will not lack new places with delicious food here.

English is the official language

In most cases, in Hong Kong, knowledge of only English will be sufficient. In many places there are signs not only in Chinese, but also in English, and the staff in most large shopping centers speak English well.

Breathtaking nature

For many, the first picture that comes to mind when they mention Hong Kong is tall buildings and densely populated areas. However, you will be surprised to find that there are actually many opportunities in Hong Kong to spend time outdoors while enjoying nature. From amazing hiking trails to expansive beaches and nature reserves, where people can get away from the hustle and bustle of the city.

Good healthcare system

Hong Kong has one of the highest life expectancies in the world. The quality of medical services is at the highest level here. In 2018, Bloomberg named Hong Kong’s healthcare system the most efficient in the world. There are both public and private clinics, which are ready to treat even the most complex diseases.

Fast Internet

Hong Kong has the second highest internet speed in the world, behind only Singapore (according to the Speedtest Global Index). This is especially true in comparison with China, where the Internet is slow and “filtered”. This is why running an internet business in Hong Kong is a great idea, unlike mainland China.

Low taxes

Hong Kong has some of the lowest taxes in the world. Companies pay tax only on the profits earned in Hong Kong at the following tax rates – 8.25% on the first HK $ 2 million of profits and 16.5% on anything higher. No sales tax or capital gains tax.

The payroll tax rate ranges from 2-17% depending on your salary level. This light tax burden attracts a large number of expats here, and many entrepreneurs prefer to register their companies in Hong Kong.

The cons of living in Hong Kong

Moving to any country always has not only advantages but also disadvantages. And Hong Kong is no exception. Knowing not only the pros, but also the less positive aspects of living in Hong Kong, will help you prepare in advance and adapt faster after moving.

High humidity

Of course, how quickly you get used to the hot summer in Hong Kong depends on where you grew up. But the humidity is really very high here. It is especially difficult to be outdoors between June and mid-September – these are the hottest and wettest months. While it may be sufficient for some simply to have air conditioning in their apartments, you can also purchase a dehumidifier.

Expensive real estate

Chances are, you’ve heard about the skyrocketing rental prices in Hong Kong. This city is indeed one of the most expensive in the world. Many people who want to move to Hong Kong are often shocked when they start looking for housing and find that the average area of ​​apartments and houses here is very small. This is not surprising when you consider that Hong Kong is one of the most populous cities in the world and the area of ​​the city is small.

Lack of balance between work and play

Hong Kong is one of the main financial centers in the world, so it is not surprising that people here devote a lot of time to work. Most work long hours and even on weekends. A 12-hour day is considered the norm here.

Difficulties in opening a bank account

It is rather difficult for a foreigner to open a bank account in Hong Kong. If you want to open a personal account in one of the Hong Kong banks, you will need to personally visit the selected bank, pass an interview with a bank employee, provide your Hong Kong ID, as well as proof of residence address. If you need to open a corporate account for business, then it will take much longer. But amid a slowdown in economic growth due to protests and the war between China and the United States, the Hong Kong authorities have asked local banks to simplify the procedure for opening an account for small companies. Thus, it has become easier to open an account in Hong Kong, although this still does not cancel the preparation of a large list of documents.

In this article, we will try to understand how you can manage your funds in Hong Kong, save or invest them, or simply send money abroad in a cost-effective way.

Those mentioned financial activities can be successfully done with a help of a financial advisor, likely with someone who is aware of the country’s legislation, rules, and other essentials.

Let’s see who is a financial advisor and how he can help you in Hong Kong, after discuss two most popular types of financial advisors, which are local and online.

Who is a financial advisor?

A financial advisor or a financial consultant is a certified investment professional who, for a fixed amount provides financial advice to clients to help them achieve their long-term financial goals. Financial advisors provide many different services such as investment management, tax planning, insurance, mortgages, retirement planning, and more. Some financial advisors may be paid a fixed fee while others are paid a commission on the amount invested, depending on the applicable laws of the country in which they work.

A financial advisor helps clients set realistic financial goals and provides objective advice to help them achieve their goals. They help organize financial assets in a way that enhances the client’s financial well-being.

The term financial advisor is used in a broader context to refer to different types of financial professionals such as stock brokers, insurance agents, real estate managers, risk managers, tax and financial planners. A financial advisor can also be called an investment advisor, financial planner, or investment advisor.

What services financial advisor can provide?

Financial advisors assess the financial needs of their clients and provide them with professional investment advice in the short and long term. The financial advisor discusses investment options with the couple.

Personal financial advisors typically do the following:

  • Arrange meetings with clients in person to discuss their financial goals.
  • Answer and educate clients about investment options and potential risks
  • Help clients plan for specific circumstances, such as spending on education or retirement.
  • Track customer accounts and determine if changes are needed to improve account performance or adapt to life changes such as marriage or having children.
  • Research investment opportunities

While most financial advisors offer advice on a wide range of topics, some specialize in areas such as retirement or risk management.

After investing, the client should regularly receive investment reports prepared by his financial advisor. They monitor the client’s investment and meet with each client at least once a year to inform them of potential investments. They may adjust the financial plan during this time due to changed circumstances of the client or due to changes in investment options.

Some financial advisors are licensed to directly buy and sell financial products such as stocks, bonds, insurance, and other securities. Depending on the agreement they have with their clients, consultants may have the clients’ permission to make decisions about buying and selling stocks and bonds.

So when do you need financial advice?

The answer depends partly on the product and partly on other factors.

Cash savings products

Whether you are looking to deposit money into savings accounts, intermediaries, or fixed rate savings bonds, you can confidently evaluate your options using comparison sites and spreadsheets. Since these products are relatively easy to understand, you might think you don’t need financial advice and can easily buy them directly from suppliers.

Investments

If you are thinking about investing in stocks, mutual funds and other investments, you can be sure to buy them directly from a broker or fund without heeding the advice. However, these products are more difficult to understand than money-saving products, and without asking for advice, you won’t be able to consider all the options available to you.

There is also a risk that you will buy a product that does not suit you, because you do not understand it.

Ask yourself the following questions:

  • Can you afford to lose money?
  • Do you have time to research?
  • Do you have a lot of experience, knowledge or skills when it comes to investing?
  • If something goes wrong, are you comfortable with taking responsibility for the wrong investment decisions?

If the answer to any of these questions is “No,” then the best option may be to seek financial advice.

When making your decision, also consider the cost of the commission versus the financial and emotional cost of making a mistake if you make a purchase without advice.

Insurance or mortgage

Some insurance products and mortgages can be purchased from price comparison sites or directly from vendors.

However, you can also talk to specialized brokers who will tell you about the different options and may be able to get you a better deal. It’s up to you whether you buy with or without advice.

Local financial advisors

The difference between a local financial advisor and other types of financial advisors is actually the difference between a professional service approach and a product-specific approach. Of course, a wealth of local experience is an advantage.

Hiring a local consultant has one key advantage: you can meet with someone who will advise you according to the rules of a particular location, in this case according to the rules of Hong Kong.

Many firms cannot afford this. Whether you agree with virtual business or not, there are bound to be situations where you feel the need to meet and talk with someone who will give you valuable strategies and advice.

Other financial consulting companies usually distribute their workload among separate departments. Your “advisor” is most likely an account manager who acts as a buffer between you and some of the other people in the back office who are actually doing the work.

Your “planning” probably comes from the planning department; your investment analysis most likely comes from an analyst who is far from what really matters in your life, and those who actually implement the strategy usually see you as just a bunch of “purchases” and “sales” that they make each shopping day. You simply won’t be able to meet with a real “advisor” because these responsibilities have been divided among several people in different offices.

On the other hand, you should be able to meet with a consultant if you choose an independent service-oriented consulting firm. Again, hiring a local financial advisor is optional, but for most, face-to-face meetings bring a host of benefits.

Most consultants to large financial companies, such as banks, will receive some or all of the compensation for selling you a product, be it stocks, bonds, mutual funds, insurance policies, or annuities.

This creates an inevitable conflict of interest. The securities laws in this country recognize this fact and require these “advisors” to be at a lower level. This is called the “suitability” standard, which means they only need to consider whether the products they sell are suitable for your broad investment profile.

The highest standard is the “fiduciary” standard. An independent consultant, whether online or local, who agrees to abide by this standard must by law always put your best interests first.

These consultants never sell products, take commissions, or do anything else that could create a conflict of interest. They weigh all the factors in your situation before making any recommendations. Their advice is 100% objective. Whether you are hiring a local consultant or not, remember that they are objective and always prioritize their clients. 

Online financial advisors

Online financial advisors have been steadily gaining popularity over the years and for a variety of reasons.

One of the first reasons people started working with virtual financial advisors was to buy time in the olden days, since they didn’t have to get in their car or sit in traffic to meet their financial advisor during a phone call. or Zoom meeting. 

For people who travel frequently or plan to relocate to another part of the country (or live abroad), working with an online financial advisor also ensures that your relationship doesn’t end wherever you are.

Perhaps the most significant advancement accelerating the trend towards virtual financial consulting is the ability of financial advisors to specialize in serving a niche that would be impractical if limited to working with clients in their hometown.

This way, you have the opportunity to hire a financial advisor who truly understands your individual needs, based on their education, experience and commitment to helping people like you.

Geographical position

Investors looking to hire a consultant in cities with high cost of living often struggle to find a consultant who is affordable or accepts them as clients if they do not meet the requirements based on their minimum assets.

Having a virtual relationship allows investors in, say, San Francisco or New York, to hire a consultant in Delaware or Mississippi who is likely to be more accessible and have a lower declared minimum asset, even if they have the same experience and level. service offers.

Timely counseling – no delay

Those professionals who work hard get good salaries, but they often cannot find a consultant who is available when they are – after hours. An online consultant is usually not limited to “office” hours and can contact you when you need it!

In times of intense financial stress, simply revising the annual plan is often not enough. As an investor, you will most likely prefer to have your financial planners or advisors available throughout the year.

The client / consultant relationship is not a set-and-forget relationship, but rather an ongoing dialogue. This includes ongoing text or email conversations, which are much more convenient than scheduled face-to-face meetings once a year.

Online documentation

Financial planning really requires a lot of different documents. Those receiving basic financial planning advice will easily find hundreds of pages of advisory documentation.

There will be many documents that will also require your signature. As an online finance consultant, we are taking advantage of technological advances as there are many clouds and secure platforms that will store your financial data. Therefore, we can safely send you all these documents online by email.

But the most incredible thing is the opportunity to put an electronic signature! Use a few clicks to sign documents to flip your superuser, customize attachments, and implement Plan B.

All of these documents will be securely posted on an online portal that only you and your online financial advisor have access to.

Many people can approach this with skepticism, which also has its own explanation. It’s a relatively new concept and it’s hard for people to get used to some of the things that can also be done on an online platform, but it’s a great tool that saves you time and benefits in the first place.

Pained by financial indecision? Want to invest with Adam?

Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 544.4 million answers views on Quora.com and a widely sold book on Amazon and a contributor on Forbes.

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