living the expat life

Living the Aussie Expat Life

When you’re living the Aussie Expat life one of the most common questions we get from Australian expats is where to accumulate your wealth whilst you are overseas? We have quite a simple response to this. You want to accumulate wealth in the country and currency that you intend to return to or retire to. The reason for this is that one of the biggest financial risks for expats is currency risk. How many times have you heard of someone getting burnt because the currency went in the wrong direction and they had to postpone their repatriation? We have and it happens more often than you think.

Consider the case of an Aussie expat in the UK who held all of their wealth in Pounds Sterling and was about to repatriate back to Australia after the Brexit vote in 2016. From the day of the vote until the end of that calendar year the Pound has fallen by over 13% against the Australian dollar. This meant that either they had to move back to Australia with less than they thought or delay their return to Australia.

By accumulating your wealth in the country that you intend to return to, when you make that decision to repatriate it is based on when you want to go rather than if the foreign exchange market suits you at the time. When you move money back to your home country utilising a dollar cost averaging approach over the time that you are away, you will be able to try and smooth out the wild fluctuations of the foreign exchange market and your assets will be waiting for you, in your desired currency, when you return.

The financial advice that we provide to Australian expats is not only tailored to your citizenship but also where you are domiciled.

Once you’ve joined the ranks of the expat community you will soon discover that with your new status comes both amazing opportunities (suddenly being able to jump on a plane and fly to a different country in an hour is an option) but you will also become the target for the well-known “Offshore Adviser”.

For the last 20 years, the offshore advisory industry has received a lot of negative press about the high-pressure sales tactics they use to sell financial products under the guise of providing financial planning and for good reason too. Just Google bad offshore financial advice and sit back and read the results.

We speak expat

The financial advice that we provide to Australian expats is not only tailored to your citizenship but also where you are domiciled. For example, the advice that we provide an Australian expat in San Francisco would be completely different to the financial advice that we provide to an Aussie expat in Hong Kong or Dubai.

Quite often these offshore advisory firms will have a team of advisors whose job it is to sign you up to some sort of savings plan or “tax-effective bond” and once you commit for 5, 10 or 20 years they will then move onto the next expat. While these offshore advisory firms will tell you that their speciality is in providing financial advice to expats, more often than not they will be providing you with the same advice that they have provided to a UK, Canadian or South African expat. The advice only relates to your situation as an expat in that country and does not take into account the possibility of you either moving back to Australia or to another country.

It is important to ensure that when you obtain expat financial advice that the advice is portable. By that we mean that it is appropriate for not only the country that you live in but also the possibility of either moving back to Australia or to another country that may not have as favourable tax structure. There’s a big difference in what is appealing as an Aussie expat in Dubai versus being an Aussie expat in New York or Los Angeles.

We have prepared below a list of questions to ask an adviser should you find yourself in the situation where you would like to consider the offshore investment option.

questions

What sort of license does the firm currently hold? Does that license carry any credibility in the financial world?

Should anything go wrong, what recourse do you have against the adviser/advisory firm? Is there a government body that you can apply to?

How flexible is the advice being provided? Does it just suit you now and would it be appropriate if you moved back to Australia or another country?

Should you change your mind after a year, can you close the account and walk away with no penalties? Everyone’s financial circumstances change and you need to be prepared for this.

What are the fees and charges of using their service and signing up to their recommendation?

If they can’t provide you with a written proposal for both the upfront and ongoing fees in a legible and easy to understand format, then be concerned.

moving overseas

living overseas

returning to australia

General Advice Disclaimer

The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Atlas Wealth Management Authorised Representative before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Atlas Wealth Management nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.