As an expat in Europe, there are several ways of doing things that you need to get used to. This includes, managing your money, your pensions and investments, and undertaking proper financial planning. When we speak with the international community, often people will say that obtaining financial advice is important, but they haven’t done it yet.
There may be several reasons for that and we discuss the five main reasons expats don’t seek advice and importantly, why they should, and how they can.
If any of these sound like you, get in touch and we can help you organise your finances, understand the impact of your decisions, and make sure you’re on track to reach future goals.
1. Financial advice might be expensive
Fees are an important consideration when taking any professional advice. You need to make sure that you are still better off having paid for the advice. This is where selecting the right type of professional firm with the right license is important. Firms like Black Swan Capital, which has a full unrestricted investment firm license, have an obligation to act in a client’s best interest at all times. We also charge a clear fee for service, so you understand what you are paying ahead of time with no nasty lock-ins, surprises, or commissions. In fact, in countries like The Netherlands, there is a commission ban, which is good news for clients and keeps costs down.
We always present fees upfront and in writing. It’s not just advice fees, you also need to consider investment management fees, both direct and indirect. Depending on how you invest, you should also make sure you are aware of custodial fees, administration fees, and any other charges, especially for so-called ‘free’ platforms. Remember, nothing is for free, so if you are told there is no charge, be sure that you are paying somewhere in the process.
We find with our transparent disclosed costs that clients often remark that the fees are surprisingly reasonable and not as much as they thought.
When weighing up the cost of financial advice, it’s also important to look at the bigger picture. A study from the UK International Longevity Centre (ILC) published in 2019, found that advised clients accumulated more wealth than non-advised clients. It found that those that took financial advice between 2001 and 2006 were, on average, £47,706 better off in 2014/16.
2. I can look after my own money
Some people say they don’t take financial advice as they feel confident enough to do it themselves. What we find as frequently though, is that even with the interest and will to self-manage, there is often not the time to commit to managing your investments, which can lead to your investments being neglected and at risk of underperformance.
Even when you’re in control of your finances, working with a professional can still add value.
Financial advice can help you understand all the opportunities you have and how best to reach your goals. It can also make sure you are taking advantage of tax-efficient options to help make your money go further and the specific issues you face as an expat in Europe. You will need to consider the jurisdiction where you are living, as well as any tax and reporting obligations plus investment restrictions you have due to your passport. Working with a financial planner doesn’t have to mean giving up control of your assets but provides you with additional support so you can be confident in the decisions you’re making and the long-term impact they could have.
3. Financial advice isn’t for someone like me
You may think that your net worth or a particular asset has to be above a certain figure to make financial advice worthwhile. However, financial planning can help a range of people.
In reality, most international professionals living in Europe, away from their home country could really benefit from the structure and direction of a good financial plan. If you’re not sure if financial advice is right for you, please give us a call.
4. It isn’t something I’ve thought about
As mentioned in the introduction, with so many things to think about and new ways of living to get used to when you are living in a new county, managing one’s finances often gets pushed down the list. Both the day-to-day decisions about your finances and the long-term planning are just as important when you are an expat.
It can be important for your life today and your long-term plans so make the effort. Take the first step and arrange a meeting, your future self will appreciate it.
5. I don’t like talking about money
Talking about money is still something of a taboo subject. Even among family and friends, money is something we rarely talk about, so it’s easy to see why some people may be put off talking to a financial planner.
If you’ve put off seeking financial advice for this reason, focus on how an open discussion about your finances can help you manage your life as an expat in Europe. It can help you to define and then reach your most important aspirations and life goals, from retiring early to creating a nest egg for children, or retiring on the Mediterranean.
Meeting with a financial planner isn’t all about discussing how much your assets are worth either. While your finances play a role, understanding what you want to achieve and how your assets and decisions can help you reach them are the real focus of discussions. It is important that you find a professional that you are comfortable speaking with. You may need to speak with a few advisers to get that connection where you can speak freely and be sure that you are working together to help you now and in the long term.
If you’re ready to discuss your finances or have any questions about how financial advice could help you, please get in touch.