1.Security – How Do I know my money will be safe & secure? Where do I transfer money to for my investments?
No money should ever be paid directly to your advisor! If an advisor / broker asks you to transfer money to them directly for any reason, alarm bells should sound. Any transfer should always be made directly to the financial institution you are investing with. Major Offshore locations and jurisdiction such as the Isle of Man, Jersey, Guernsey, Dublin, and Bermuda etc have some of the highest levels of investor protection anywhere in the World. If we take the Isle of Man for example, investments are covered by a world-wide investor protection scheme
1.Questions about the Advisor Company / brokerage?
How large and reputable is the advisor you are considering working with? If the advisor has thousands of clients in many locations around the world, you can usually be sure they are professional, reputable and have a solid reputation. If you are considering working with a one or two person company, ask yourself who will advise you if the principle is sick, moves or retires? What will you do if you move? Larger International advisors often advertise in Publications such as the financial times, have a very reputable website and have the resources to ensure advisors are fully trained and upto date with latest product and market knowledge. Your advisor should have a newsletter that they send to clients so that you can see the type of products offered.
2.Why Offshore vs. Onshore?
Offshore, Investment companies have a lot more flexibility to invest in alternative currencies, markets and hedging mechanisms , returns are accumulated usually free of any tax, therefore return potentials can be significantly higher and roll up quicker.
3.Tax- Will I have to pay Tax on my Investments offshore? Usually all returns are paid totally free of Tax, therefore gains roll up quicker and compounded over a number of years this can be significant amounts.
4.What happens when I return home re Tax? Can I can Continue My Investments if I move home?
If you have chosen to invest on a regular basis, you can continue to do so if you move back to the UK. The only restriction would be that you could not increase from say 500 pounds or dollars per month, to say 1000 pounds or dollars per month. Usually, any tax liability in your new country of residence would only apply to growth that has been made after the date you moved back. Any tax liability would only arise when you en-cash your investment. It is questions such as this that a good international advisor will be able to answer for you.
5.Will I ever see you (the advisor) again? International Service?
One of the main questions you should ask yourself is. ‘What will happen when I move country or return home? Who will advise me?’
A major international financial advisor will have international offices and teams of advisors in many different cities around the world. Don’t be afraid to ask this question, as we hear many stories of clients that are promised everything, and then receive nothing. Common Questions you should ask include: -
A. If I have cause to complain, how do I do this?
B. Does your company have a Client Service Centre that I will always be able to contact? What time zone is this?
C. How Many advisors does your company have and in which major cities?
D. Is there a company newsletter so that I will be kept upto date with new investments, market commentary etc?
E. What happens if you the client move or the advisor is sick? What is the company’s policy?
6.What Fee’s will I have to pay the advisor?
A good advisor will never charge you a fee, as they are remunerated from the institution that business is placed with, in a similar way to a travel agent. You will not get a discount by going straight to the financial institutions, and most investment companies and financial institutions will not accept direct business. A reputable Financial Advisory Group builds there reputation on referrals and recommendations, so depending on the number of clients a company has, if it’s in the thousands you can be pretty sure they are giving good advice and will be around for a very long time. The only fee a good advisor may ask you for is referrals to friends or colleagues if you are happy with their service.
Beware of internet based companies that offer discounts on certain funds. They are often based in un-regulated locations and would be impossible to find should you have cause for complaint. Also, we hear stories of clients that are sold the totally wrong investment that does not suit the clients risk profile because no thorough fact find was completed.
7.What Financial Institutions does the advisor work with?
You may wish to ask the company you are being recommended to invest with about the financial advisor. Is xyz advisor reputable? How long has xyz been in business? Do they place large volumes of business? It pays to be aware that some financial advisors only work with one or two companies therefore have very limited access to products and investment opportunities.
8.Is the Financial Advisor Independent?
AS above, ask the advisor if they are truly independent? Some advisors who are tied to a small number of providers are not allowed to take agencies with other investment companies. The advisors website should be able to give you an insight into this.
9.How Many Clients does the advisor company work with?
If a restaurant has a bad reputation, is usually empty and has health & safety issues, you can be pretty sure it won’t be in business long and will close its doors. The same applies to a financial advisor. If they have a good reputation among many thousands of clients, they must be doing a good job for their clients and you can count on them being around. There is nothing worse than taking out an investment, and then 6 months later the advisor disappears, it can be very difficult to get any advice. Again, a good, reputable advisor will be more than happy to help you with any previous investments you have made through another broker.
