What Expatriate Financial Advice Means For You
Expatriate Financial Advice has long been investment-focused. However, there is much more your expatriate financial adviser can do for you. In this post, we look at 3 important ways your financial planner can help you.
- Listen to your concerns
- Provide holistic advice
- Manage risk
If you want to know more about how to chose an expatriate financial adviser, please visit this post.
Listening To You
One of the most important parts of expatriate financial advice is to listen to your concerns. A direct link may not exist between your concerns and your finances. However, there is often a financial element to any concern. A person can only begin to help when they fully understand your concerns. This means you will have to be open about your circumstances and what you want to achieve. The adviser needs to ask relevant questions to make sure the advice given is correct.
Holistic Expatriate Financial Advice
Historically, expatriate financial advice would focus on one area of your finances. For example, investment. Focusing on one area of financial planning does not serve clients or advisers well. Take this scenario: Joe is a 40-year-old man with a wife and two young children. He has a good job with a steady income. His income covers all the family out-goings and he wants to invest for the future. This may be for his kids’ education or his retirement. Joe’s wife is a full-time Mum and they have few assets.
In this situation, if Joe died his family’s standard of living would suffer. Replacing Joe is not possible but we can replace his future income. For a healthy non-smoker like Joe, life assurance is cheap. He could protect his family’s financial future from about AED10 per day. Alternatively, if he just invested his money, the only benefit to his family would be the amount he had managed to invest from his savings which is unlikely to be sufficient for their future.
In everyday life, risks are something we normally avoid. When it comes to investment there is no reward without risk. Therefore, in expatriate financial advice, we need to understand the risks being taken and manage them.
There are many different types of risk. Some academics have listed more than 100. Most can be split into two groups: Systemic and non-Systemic. Systemic risks are those which affect the whole market such as an interest rate rise. Non-systemic are specific to a company or investment. For example, if Apple iPhones did not sell as well as predicted, this may have a negative impact on Apple’s share price. Non-systemic risks can be reduced by diversifying your investment across several different companies. Systemic risk cannot be diversified away and so need different techniques.
For more on this please visit my page on Expat Investment
To discuss your financial planning needs, please contact me on 050 594 5217 (what’s app is available) or arrange a meeting via ZOOM for free by clicking here.