This article was last updated on May 4, 2022
HSBC Expat review 2022 – is this a good solution for expats? That will be the topic of this article.
I have many expat readers, and from time to time, I am asked to review certain providers. HSBC expat/HSBC offshore is no exception.
I get asked the following questions on countless occasions;
- Should I invest with a bank?
- Isn’t it more convenient to invest and bank with the same firm?
- Are banks expensive for investing compared to platforms and currency apps?
- Do banks tend to only sell their own products and funds?
- Aren’t bigger names safer?
For people interested in investing and banking options, my email is email@example.com, or you can use the chat function below.
I will answer these questions in this article. For those that prefer video content, I have summarized the options for expats in the video below:
Where does HSBC operate?
Globally. Most of their expat clients are in Hong Kong, Singapore, Shanghai, Dubai, Qater and other places with large expat numbers.
What is HSBC Expat and what services do they offer?
HSBC Expat used to be called HSBC International. They offer multi-currency bank accounts, fixed deposits various investment opportunities.
What are the account minimums?
60,000GBP, which is about $80,000. If the accounts fall below 60k, additional fees are charged.
This is a very substantial account minimum, considering that money could be better invested elsewhere.
HSBC do offer fixed deposit interest rates, but due to the global situation with interest rates, the rates are paltry.
What are the benefits of HSBC Expat?
Theoretically, they allow customers to move from country to country and stay in the same banking family.
They also cooperate with the accountants EY, and their global tax guides, which can be useful for some with complex tax issues.
The mortgage service also isn’t bad, but it always pays to shop around for better rates and deals.
Their general service levels are still better than some local banks, even if they compare unfavourably to more boutique expat-focused banks.
What are the costs?
The cost of the banking service (current account) isn’t cheap, but not extortionate. FX fees are 2.5%-3%. This is more expensive than Transferwise, but normal compared to other offshore banks operating from Isle of Man, Guernsey, Caymon Islands and Jersey.
International bank transfers cost 30-35GBP each time, even when done online, which is higher than normal.
Investment costs on the platform are high, due to a combination of fund costs, direct costs and a range of hidden fees.
Do HSBC Expat offer mortgages?
Yes. HSBC offers UK mortgages to expat investors. They no longer offer international mortgages, however.
Why bank offshore?
For me, and most expats, the desire for expat banking isn’t about secrecy. Sometimes I feel like the media are in a time machine.
Offshore banking these days isn’t like the 1970s, 1980s or even 1990s. It isn’t linked to tax evasion for most people.
It certainly isn’t about stuffing money in your trousers, before going on a flight, like in this scene from the Wolf of Wall Street!
For most investors in the 21st century, offshore banking and indeed investing is about diversification, convenience and lowering political and social risk.
For me, I want a number of things;
- To avoid emerging market banking, especially in unstable countries.
- To avoid black swan events, I want diversification in terms of banking options. Even though I come from the UK, which is a fairly stable country, I want to have non-British banking options……just in case the UK goes into political turmoil and elects a radical government. Or for that matter, Brexit causes 1001 problems!
- I also want speed and convenience, and not to have to open and close bank accounts every 3-4 years.
I am not alone. Many expats, especially in unstable countries, feel the same way. Take oil and gas as an example.
Expats in this industry are often sent to unstable parts of the world. Angola, Egypt and countless other countries.
Why would an expat, moving from emerging market to emerging market, want to entertain a local banking solution?
So what are the negatives with HSBC Expat?
Based on the above reasons for offshore banking, how does HSBC rank? Firstly, for me, a bank which is so international means more risk in certain situations.
HSBC, we have to remember, has some links to our governments back home, if we are from the UK, US and countless other countries.
The very fact that HSBC is so international means that they can come under political pressure at any moment.
A few years ago, HSBC reviewed accounts held by UK residents in Guernsey. These people aren’t expats.
Nevertheless, it shows that it can be easier to pressure a bank that is registered in the UK but has an offshore arm, compared to a truly offshore platform or bank.
That doesn’t mean that platforms or banks operating in just one country are perfect or without risk.
They still have to operate under various accounting reporting standards, moreover, such as FATCA for Americans and CRS.
Despite this negative, surely HSBC is more convenient than some options, due to their international flavour?
Well not really. Even though HSBC UK is a different entity to HSBC Japan or HSBC USA, the local regulators can put up barriers, and these barriers can also work against you.
It often isn’t possible to deposit an HSBC cheque in country Y, if it has been produced in country X.
Very normal, you may be thinking, but this hardly makes HSBC the world’s local bank, which makes everything convenient!
Countless other banks, moreover, have international services, even if they don’t have physical banks in numerous countries.
How about HSBC Investment Options?
Like most private banks, HSBC offers some very expensive fund ranges. So even if you use HSBC for banking, most of their expat investing accounts are best avoided.
There is a strong correlation between lower investment fund fees and better long-term performance.
Countless of the funds offered on the HSBC platform cost 1.5%, 2% or even 2.5% a year in fees.
HSBC does have some excellent index fund options available for UK investors, such as the FTSE250 tracker fund, which has 0.1% yearly costs.
These options, however, are seldom used on the platform offered to expats. They tend to be used on third-party platforms, alongside BlackRock, iShares and other providers.
This situation isn’t surprising. The largest institutions, with the biggest brand names, often get away with charging more money.
How about customer service?
Large organizations can lead to slowness and impersonal service. With HSBC, you are one customer out of 37 million!
So many expats claim that service levels are poor, even though HSBC preach about the benefits of getting a specific relationship manager assigned to your account.
What are some of the biggest mistakes investors make with big banks?
Given all these negatives about the big banks, why do many people still use them? Even though more and more people are becoming sceptical about big business and big government, some people still pick big brands.
This is despite the extra cost, slowness, poor impersonal service and so on. This can be blamed partially on familiarity bias.
Various studies have shown people are more likely to:
- Invest in Google stocks, if they use Google search more often.
- Invest in a company they drive by on the way to work.
- Invest in the company they work for, and therefore doubling their risk if the company goes bankrupt.
- Assuming that big name company stocks are safer than the broader market.
- Invest in stocks only in their home market
- Invest in stocks in the sector they work in
- Invest in certain assets due to cultural familiarity. For example, gold for Indian investors or property for Singaporeans, regardless of whether this is rational or not.
Applied to HSBC, many people assume that service levels and investment returns must be excellent, due to the familiar sounding name.
This is usually not the case.
How about the World Selection Portfolio?
The world selection portfolio has a minimum balance of $50,000 and helps you invest in globally diversified funds.
It isn’t the worse option in the market but there are two huge issues with the portfolios; all the funds available are linked to HSBC and there are many hidden costs associated with the portfolio.
So it might seem like the fees are low, but the HSBC-funds which underline these portfolios, often have charges of 2%-3%.
Has the performance been OK in 2022?
The stock market performance in 2022 has been weak. Most stock markets are down 10%-15%, with the Nasdaq down further, as of May 4, 2022.
HSBC can’t be blamed for this, but the funds have, in some cases, done worse than the general market.
So in conclusion, should you bank and invest with HSBC Expat?
On the banking side, HSBC is OK. Better options exist, however. The costs, service and convenience could all be improved.
On the investment side, the vast majority of HSBC products on the platform are expensive and focused on HSBC in-house products and funds.
Most of these funds are not the low-cost variety, that tend to outperform, long-term. For these reasons, banking and investments should be kept separate as a generalization.
Do you offer banking services?
I offer banking services for existing clients, but not as a standalone product. It is too time consuming to offer as a standalone product or service.
My main focus is on investment-related services, although I do not charge for banking services for existing clients.
What are your contact details?
firstname.lastname@example.org is my main email. I also am available on a range of apps.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 401.4 million answers views on Quora.com and a widely sold book on Amazon
I am the most viewed author globally on financial matters on Quora.com, receiving over 395 million answer views in the last few years.
In the article below I was asked to comment on:
- What is my favourite stock strategy and why?
- How common are “rags to riches stories”, and how should we define riches anyway?
- Should people invest in one go, as a lump sum, or monthly invest?
- Do people really sacrifice their health for wealth?
To give you a sneak peak I have copied some of the article here
There are a few tried and tested ways. Firstly. it depends how you define “riches”.
If you mean become a multi-billionaire, and go from a poor background to one of the richest people in the world, that takes some luck.
There are few billionaires in the world:
Most are self-made. Most also tend to work hard, smart, take calculated risks and so on.
Yet there are many other people who have the same qualities who aren’t that rich.
In comparison, if somebody wants to become a millionaire or even multi-millionaire it isn’t difficult if:
- You are from a developed country, and some mid-income and developing countries. Fortunately there are few dirt poor countries these days compared to 20–30 years ago, so the number of people who can afford to save and invest has gone up a lot.
- In addition to number one, you have the basics – a job. Basic levels of health and so on.
- You start small from a young age. Start investing tiny amounts – even $50-$100 a month as a student with a part-time job. Increase if after you can afford to in your 20s and 30s.
- Reinvest unexpected money from bonuses, inheritances etc.
- Invest in ETFs like the S&P500 long-term. By long-term I don’t even mean 15 years. I literally mean forever – from your late teens all the way through to retirement.
- Hold 3–4 ETFs to reduce your risk. Learn about asset allocation in books or hire a professional to do it for you.
- Invest your money. Don’t save it.
- Don’t speculate. Being an investor and speculator isn’t the same thing.
Statistics show that the average millionaire is middle-income and middle-aged.
Over 30% of millionaires in places like the US and UK are estimated to be teachers, mid-income managers, accountants etc, with over 50% being from various mid-income level professions.
So, the “boring route” to “riches”, which means get wealthy slowly, isn’t difficult.
If you want to become very rich, or also have a high-income as well as get wealthy (wealth and income are very different) you need to learn different skills.
Money management skills, a long-term mindset and good decision making is enough to get wealthy slowly.
If you want to do it more quickly and aggressively, you also need those skills in addition to others such as business-related skills, or high technical skills in certain situations.
It also depends on how much risk you want to take. The aforementioned slow approach isn’t very risky at all.
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