As an American living abroad, managing your finances can be challenging, especially when it comes to wealth and asset management. Working with a wealth manager who is familiar with the nuances of cross-border investment is the best solution to address the unique needs and challenges faced by expats. Choosing the right expat wealth manager is essential to your financial wellbeing and future prosperity. In this article, we look at factors to consider, the benefits of hiring a professional, and offer insights on how to choose the right wealth manager.
- What is wealth management?
- Why expats need wealth management
- Benefits of working with a wealth manager
- Choosing the right wealth manager
What is wealth management?
Wealth management encompasses a range of financial services aimed at enhancing and safeguarding your wealth. Wealth management services typically include investment management, tax planning to estate planning and retirement planning with a view to helping you grow and maintain your wealth and achieve your financial goals.
Why expats need wealth management
Managing your wealth as an expat can be particularly challenging due to the complexities of complying with both US and your host country’s tax regulations, currency fluctuations, and diverse international investment opportunities. Your wealth manager should also help you navigate cross-border banking, optimize your tax efficiency, and plan for retirement in the US or abroad. Wealth management offers a holistic solution to address these challenges, providing expert guidance and support tailored to each expat’s circumstances.
Benefits of working with a wealth manager
Strategic planning
Wealth managers develop customized financial strategies tailored to the specific circumstances and goals of their clients. Whether the focus is on short-term objectives or long-term wealth preservation, strategic planning ensures expats have a clear roadmap to achieve their goals. Most wealth managers are like the general practitioners of the medical world – they have particular expertise in one financial area, normally investment management, and working knowledge in others, such as retirement planning, estate planning, insurance, and taxation.
Bespoke investment advice
Individuals can benefit from personalized investment advice designed to align with their risk tolerance, financial goals, and time horizon. Expat wealth managers offer insights into cross-border investment opportunities, helping expats build diversified portfolios that reflect their circumstances. When searching for an investment manager, an important credential to look for is the Chartered Financial Analyst (CFA) designation, which is the only globally-recognized portfolio management credential. Additionally, credentials such as the Certified Financial Planner™ (CFP™) designation, or qualifications through local agencies such as the Chartered Insurance Institute in the UK or the European Financial Planning Association, may be useful.
Tax planning and optimization
International tax considerations often pose significant challenges for Americans living abroad. Expat wealth managers should have experience in cross-border tax optimization solutions, and they also often work in partnership with specialists in both US and foreign taxes to plan and optimize your situation. There are three levels of US tax qualifications: Enrolled Agent (EA), Certified Public Accountant (CPA), and tax attorneys. For simple scenarios, an Enrolled Agent may have sufficient knowledge to meet their needs, but for more complex situations a CPA or attorney is preferable. For US expats, it’s also important is that the tax advisor is familiar with the tax treaty between the USA and their country of residency.
Expert estate planning guidance
Estate planning is part of wealth management, to ensure that your assets are protected and transferred efficiently to future generations. Wealth managers offer guidance on structuring estate plans, including international wills, trusts, and other vehicles, especially as single-country wills may not be transferable across borders. As most wealth managers are not attorneys, a consultation with a cross-border estate planning attorney may be required to draft the appropriate documents.
Retirement planning
Planning for retirement as an expat requires careful consideration of various factors, including pension and saving options in multiple countries, tax implications, currency strategies, and investment strategies. Expat wealth managers assist in developing comprehensive retirement plans tailored to your unique circumstances, helping you achieve financial security in retirement.
Peace of mind
By partnering with a reputable wealth manager, you can delegate the complexities of financial management and gain peace of mind knowing your affairs are in expert hands, letting you focus on enjoying your experience abroad.
Choosing the right wealth manager
When choosing a wealth manager, you should consider the following factors:
Client-centricity and relationships
You should look for a wealth manager who prioritizes your interests and adheres to a fiduciary duty to act in their clients’ best interests. You should also look for someone with whom you have a good relationship, who listens to your needs, and who is available and responsive when you have questions.
Comprehensive approach
Ensure that the wealth manager you choose takes a comprehensive approach, including investment management, tax strategy, estate planning, and retirement planning. Your wealth manager should also have a network of partner professionals who offer specialized guidance in areas in which he or she is not an expert.
Expertise and credentials
Verify the qualifications and expertise of expat wealth managers you’re considering working with, including relevant certifications and experience with US expat clients.
Transparent fee structure
Understand the fee structure of potential wealth managers, including fixed fees, transaction fees, commissions, and any other charges.
Track record and reputation
Research the track record and reputation of the wealth management firm, including client testimonials and reviews, to assess their reliability and trustworthiness.
By partnering with a trusted wealth manager, you can benefit from strategic planning and expert guidance to achieve financial security and peace of mind on your journey abroad.
If you have any questions about financial planning as an American living abroad, get in touch.
This article is for informational purposes only; it is not intended to offer advice or guidance on legal, tax, or investment matters. Such advice can be given only with full understanding of a person’s specific situation.