Expats often face unique financial challenges that can be difficult to navigate. From tax and banking laws to currency exchange rates, expats are faced with more potential pitfalls than the average person.
As such, many expats choose to hire an expat financial advisor in order to help them sort through these issues and make their money work harder for them.
If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).
In this page, we’ll have several talking points, including:
- What is a financial advisor for expats?
- Financial advisor vs financial planner
- Pros and cons of using financial advisor
- Benefits of financial advisor
- Disadvantages of financial advisor
- How much does a financial advisor cost?
What is a financial advisor for expats?
An expat financial advisor is a specialist who helps people who live abroad with their finances. They can provide investment advice and planning for retirement, tax planning and other important tasks related to your financial security.
An expat financial advisor will know how to structure your investments so that they are not affected by currency fluctuations, which can be a problem when you are living outside of your home country.
They will also advise on how much money to keep in cash reserves at any given time (since you may need access to this money at short notice), as well as how much insurance cover is needed depending on where your property is located and what type of lifestyle it affords you.
Working with an expat financial adviser can be a great way to make sure you are taking care of your money. They help you make the most of your savings.
They help manage the finer details of your finances. A personal financial advisor often offers services like budgeting and debt management that are difficult or impossible for individuals on their own because they do not have the time or expertise needed to do so successfully.
Expat financial advisors also help manage investment risk while you are abroad. A financial advisor can help you make sure that your investments are diversified, which is a key to reducing investment risk. By spreading money across different types of assets (like stocks, bonds and real estate), you can avoid putting all of your eggs in one basket and losing everything if that one asset class tanks.
They may also offer advice on what types of investments are best for expats living abroad—for example, they could recommend an offshore account or local investments unknown to you.
An online financial advisor is also available, but extra caution is advised.
Financial advisor vs financial planner
Financial advisors and planners advise individuals and businesses on financial management. The phrases are commonly used interchangeably, but these two expert classifications are separate.
Financial planners provide comprehensive financial strategies for clients, including savings, investments, insurance, retirement, and estate planning. They usually charge hourly or fixed rates.
The Certified Financial Planner Board of Standards, Inc. has established a rigorous certification process for those who aspire to become financial planners.
Only those who pass the initial exams given by the CFP Board are given the designation of a Certified Financial Planner, which requires them to adhere to rigorous educational, training, and ethical criteria. Fiduciary financial advisors also hold the CFP certification.
These experts must then participate in annual continuing education courses to keep their credentials current.
To ensure the public’s safety and satisfaction with financial planners, the CFP Board of Standards defines and enforces the requirements for such accreditation.
Education, examination, experience, and ethics are the four pillars of CFP certification. A candidate for Certified Financial Planner should budget up to one thousand hours to complete the required coursework and take the exam.
Certification as a financial planner requires at least a bachelor’s degree and coursework in the field. To pass the ethical section, a candidate must demonstrate compliance with the Rules of Conduct, which prioritize the needs of clients, and the Fitness Standards for Candidates and Registrants.
The Chartered Insurance Institute of the United Kingdom grants a credential known as “Chartered Financial Planner”.
If you’re looking for a financial advisor in the United Kingdom, go no further than someone who has earned the Certified Financial Planner designation, widely considered the “highest standard” in the sector.
Being a Chartered Financial Planner requires studying for and passing 14 exams on various aspects of the financial planning industry. Exams count toward “credits” in the Chartered Insurance Institute’s certification process.
Completion of comparable examinations administered by various awarding organizations may also result in credit being granted. The requirement of 290 credits before qualifying for Chartered status ensures that those who reach this level have worked in the profession for a significant amount of time.
A CII chartered financial planner must have five years of experience in the profession in addition to completing tests, membership in the Personal Finance Society, and annual Continuing Professional Development.
Due to the stringent qualifications, the Chartered Insurance Institute recognizes licensed financial planners as having made a public pledge to provide exceptional service.
Financial consultant vs financial advisor
Both financial advisors and financial consultants offer advice on managing one’s money, but they focus on different types of clients and offer unique services to meet their particular demands.
An individuals who works as financial adviser focuses on helping their clients reach specific financial goals, in contrast to a financial consultant who serves a diverse clientele providing a variety of financial planning services to organizations and enterprises.
Financial advisor vs wealth manager
Wealth managers focus on investment management, especially for wealthy customers, whereas financial advisors provide a wider array of financial planning services.
One can engage a wealth manager to handle certain investments, or a financial advisor to handle all aspects of one’s financial planning, depending on one’s requirements and preferences.
Financial advisor vs accountant
While accountants concentrate on tax preparation, compliance, and reporting, financial advisors help clients reach their financial targets by advising them on investments and managing their portfolios.
Together, they offer comprehensive financial guidance and services, which is crucial for clients who are trying to make sense of investing and money management.
Types of Financial Advisors
There are various types of financial advisors. Understanding them helps investors choose an advisor with the correct knowledge, experience, fiduciary involvement, fees, and supervision from regulators to fulfill their financial requirements and goals.
Pros and cons of using financial advisor
Benefits of financial advisor
First and foremost, they can help you make the most of your savings. A good advisor will conduct a thorough analysis of your finances and determine what goals you have for the future, as well as which risks are worth taking on.
They can help guide you through the complex world of investments and make sure that any money invested is being put to its best use.
If investing in stocks and shares or property are something that interests you, having an expert on hand will ensure that all factors are taken into account so that you can have peace of mind.
An advisor can also provide financial advice on where best to invest your money so that it continues growing at a healthy rate without putting too much at risk in any one place.
An expat financial advisor can help you find the right investments, assist with tax planning and retirement planning, serve as a liaison between you and local banks.
This could involve setting up a pension fund or investment accounts for children who may one day inherit them.
Additionally, if there are any specific goals such as saving for a house or buying furniture then having someone who understands how much money needs saving each month and year can make all the difference between achieving success or failure in reaching those goals.
Finally, having someone who understands both local laws as well as international ones will help ensure that all taxes are being paid correctly and on time (this is especially important if you’re working abroad).
Disadvantages of financial advisor
Expats who don’t feel comfortable talking about their finances with someone they don’t know may not want to hire an expat financial advisor.
Some expats may not be able to afford the fees charged by some of these financial advisor companies, especially if they are living abroad on what most would consider a low income.
Finally, it’s important to remember that expat financial advisors don’t always have the same level of expertise as a financial advisor who is familiar with the local economy.
They might be able to help you make decisions about investing in real estate or stocks, but if you want advice about local banks or other financial institutions, an expat financial advisor may not be your best bet.
How to find a good financial advisor
Finding a good expat financial advisor can be a daunting task. Fortunately, there are a few things you can do to narrow down your search.
If you are considering hiring an expat financial advisor, there are several things to consider. First and foremost, look for someone with a good reputation.
You can ask friends, family and colleagues for recommendations – if they’ve had positive experiences with their financial advisors then chances are yours will be too!
As another important criteria, look for someone with a thorough understanding of international tax laws. After all, this is what they will mostly be advising you on!
Also make sure that your advisor is familiar with your personal situation and goals before making any decisions about investments or other financial matters.
Look for someone who has been established in their field for some time. Ideally they should have years of experience under their belt when it comes to helping people like yourself navigate the confusing world of international finance.
Lastly, make sure they are certified by an organization like the CFA Institute or other notable institutions. This means they have passed rigorous exams demonstrating advanced knowledge in areas such as portfolio management and risk analysis.
Take careful note of the professional body that certifies them; this will demonstrate how much experience they have in providing services for expats.
Finally make sure that the advisor has experience working with expatriates like yourself so don’t hesitate to ask questions about previous clients’ backgrounds before deciding whether or not this person is right for you.
What credentials should you look for in a financial advisor?
To gain reputation, knowledge, and skill, financial counselors typically get certified. Top financial advisor certifications include:
- Among the many prestigious credentials held by financial planners, “Certified Financial Planner” stands out. CFPs have the necessary education, pass a rigorous exam, and have relevant work experience. They have an ethical code to follow and are required to keep learning. Although the Certified Financial Planner credential is commonly associated with the financial planning sector, it commands respect and esteem across the board in the financial advisory profession. Financial advisors that provide comprehensive financial planning services also value the CFP certificate.
- The credential of “Chartered Financial Analyst” is used by several people in the investment industry. The three tiers of the exam cover topics such as portfolio management, investment tools, and ethics. Assets and investment investigations are common responsibilities of CFAs.
- Comprehensive financial planning is certified by both the CFP and the Chartered Financial Consultant. Life insurance, retirement plans, investment strategies, and bequests are all coated. The ChFC is typically selected by insurance-focused planners.
- The Certified Investment Management Analyst credential is open to those who work in investment advisory and portfolio management. Investment policy, management selection, and asset allocation are some of the topics covered. Clients of CIMA include affluent individuals and organizations.
- Life insurance and wills are the main areas of study for those pursuing the Chartered Life Underwriter credential. The licensed expert is well-versed in a variety of relevant fields, including estate planning, life insurance, and more. It is pursued by experts in insurance and risk management.
- A Series 7 and 66 license is required for financial advisors in the United States to purchase or sell securities. Series 66 licenses enable investment advice, while Series 7 licenses are used for general securities.
Do I need a financial advisor?
If you are living abroad for an extended period of time, you might have asked:
An expat financial advisor can be a great resource and will understand the unique challenges that come with being overseas and be able to help you make smart decisions about your money.
If you are having trouble managing your finances, then hiring one might be worth considering as well. If you do not already have a financial advisor, it might be helpful to look for one that specializes in expat-related issues.
An experienced international financial advisor can help you get settled into your new home and make sure that everything is in order from an international tax perspective. They will also take the time to understand your specific situation so they can recommend solutions tailored specifically for you.
Meanwhile, when it comes to local financial regulations, tax legislation, and market dynamics, a local financial advisor knows the ropes.
A retirement financial advisor for expats can help with all your financial needs, such as investment advice and planning for retirement. An expat financial advisor will be able to give you the best advice on how to invest your money–and what types of investments are best suited for you.
A good financial advisor can be an invaluable resource for someone who is living abroad, especially when it comes to matters of international tax planning and compliance.
If you’re an expat, there are a few things that only an expat financial advisor can do for you.
A good advisor will help you manage your finances in a way that fits with your goals and risk profile. They can help you build a financial plan that is tailored to your needs, manage it through thick and thin, and make sure you are making the most of your savings.
Advisors also offer guidance on things like insurance policies or investments that may be right for you as well as advice on avoiding costly mistakes.
In short: If you are an expat who wants to invest but isn’t sure where to start or what questions to ask (or even if investing is right for you), then an advisor could be just the person for the job!
An expat financial advisor can help you with tax planning and other important tasks related to your financial security.
They can help with tax planning by finding opportunities to reduce your overall tax burden. This may include helping with international wealth management so you are not taxed twice by two countries.
It might also involve setting up a company or trust that allows savings to grow while reducing the amount of taxes paid on them depending on what kind of entity has been created.
If someone has an aggressive investment strategy but doesn’t have time to monitor their investments regularly or at all, then they may need more hands-on assistance than someone who is comfortable managing their own portfolio.
Some advisors will even work with your current bank to offer you better service for low fees.
They also tend to have access to more resources like research reports from analysts who track stocks or bonds all day long so they can give clients recommendations that are timely and relevant rather than outdated information which could hurt investors’ portfolios over time if not updated regularly.
What are the problems expats usually face with their finances?
The first problem that expats often face is the difficulty of keeping track of their finances from abroad. It is not uncommon for them to be working in a foreign country, but still have assets at home and want to manage those assets through an advisor or bank in their home country.
However, this can be difficult because many banks will not open an account for someone who resides outside their jurisdiction–even if they’re only temporarily abroad.
Another common issue is managing multiple currencies. Expats may have investments or other assets that are denominated in different currencies than those held by their employer or family members back home. This can make it hard to keep track of all these different balances on top of everything else.
One big hurdle is taxation. For instance, an American citizen living overseas who has income from both countries will have a tax situation that could get complicated very quickly because of different tax treaties, FATCA, and a lot of other factors.
Finally, there is the issue of banking regulations. As an expat, you may be subject to different rules and regulations than those in place at home. This can make it difficult for banks to offer services that are similar to what they would provide for a customer living in their own jurisdiction.
How much does a financial advisor cost?
The cost of a financial advisor depends on what type of service you need and how much time you want to spend together.
For example, if your situation is simple and straightforward, and can be discussed with a call or Skype session, then the typical financial advisor fees are only small.
But if there are more complex issues at hand like how to manage hefty investments across multiple countries or if there’s a lot at stake financially such as a sizeable inheritance, then it might make sense for an expat financial advisor to charge more.
The fees charged by expat financial advisors vary widely based on their experience level and area of expertise.
Take note that many expat financial advisors choose to work together in teams or cooperate with others. There’s also an independent financial advisor who isn’t tied to any group. This could affect how much they charge for their services.
An expat financial advisory firm may assign you to a team of advisors, some of whom will focus on analysis while others will be in charge of things like client communication.
Expat financial advisors may also collaborate with a client’s team of allied professionals outside the company, including tax experts, lawyers, and risk management specialists, to develop complete solutions to help the client optimize their potential for attaining their financial goals.
In addition to traditional financial institutions like banks and broker-dealers, expat financial planners can be found working for such diverse businesses as accounting firms, insurance providers, independent financial planning firms, and investment firms.
If you are happy with your current financial advisor and they are helping you reach your goals, there is no need to change anything. But if they are not showing any signs of improvement or growth in their expat wealth management ability, then it might be time to look at other options.
Some advisors may offer a better deal than others because they have more experience and expertise in certain areas such as asset allocation or tax preparation.
How to Become a Financial Advisor
Earning a bachelor’s degree in economics, finance, or related discipline; getting some work experience through internships or entry-level role; and securing certifications are ways how to become a financial advisor.
Financial advisor for young adults
If they want to set themselves up for success in managing their money and creating a solid financial plan, a financial advisor for young adults is crucial.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
