The Importance Of Long-Term Relationships


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A good and long relationship with your wealth manager can be very rewarding for you, financially and also emotionally. It gives you peace of mind, both that he will continue to look after your af

A good and long relationship with your wealth manager can be very rewarding for you, financially and also emotionally. It gives you peace of mind, both that he will continue to look after your affairs as long as needed, and that also that if necessary help your spouse and family with the transfer of your assets when you die, and continue advising them if they wish. It is beneficial to, where possible, use one adviser for much of your wealth management as it will help you build a relationship with mutual understanding and trust and where you know you will receive a reliable and personal service.

The first step is to find the right adviser. It?s no good using someone who is not best placed to deal with all your current and prospective future financial issues. For example, many British expatriates have relationships with financial advisers back in the UK and would like to continue to use him even though they have moved overseas. However, it is likely that however qualified he was to give you advice when you were a UK resident that he will not know what the best guidance for residents in your new country. He may understandably not be aware of all the investment opportunities that exist for residents in this country and, more importantly, is unlikely to be following the constant changes to local taxation.

Also, although your UK adviser is probably regulated by the UK Financial Services Authority (FSA) this does not necessarily mean he is regulated to give advice to residents in the country where you are now living. It is possible for a UK advisory firm to ?passport? FSA authorisation into other EU countries, but unless they have a number of clients in your country of residence they are unlikely to have done so.

I recommend that you find a wealth manager who is based in the country where you are living and who has a solid, long-term track record helping expatriates arrange their financial affairs to work within the local system. He should still be up to date with tax concerns back in the UK, as these need to be taken into account for issues such as inheritance tax, UK pensions and any assets you may have in the UK.

There are quite a few advisers for you to choose from in countries like Spain, France, Portugal and Cyprus and it is important to find one with whom you believe you can build a long lasting relationship.

At your initial meeting the adviser should take time to talk to you and establish your requirements and objectives and your lifestyle and future plans. He should look at your overall financial situation to ensure his recommendations will fit in with the rest of your affairs. In a nutshell, he should make an effort to get to a complete picture of how your finances affect your life and vice versa. It takes time to build up trust, but you want to feel confident early on that you believe you will be able to rely on him or her.

You should also establish what happens after you make investments through him. Will he conduct regular reviews once or twice a year to ensure that your investments are on track? Will you be able to phone him up if you have queries or concerns?

I mentioned regulation earlier and this is a key factor in selecting your wealth manager as it is risky to use one who is not regulated to give advice in your country of residence. The FSA passport I mentioned earlier gives British expatriates the best of both worlds as you have the comfort of knowing that the wealth management firm is highly regulated, to the standard you are used to, and also that this regulation extends to their clients in your country of residence.

Of course, the adviser?s skills are also important. Your adviser should be professionally qualified and have a good number of years experience in both the UK and the expatriate market behind him. Since an individual adviser is rarely specialist in all fields, he should have the resources to deal with any other areas, for example through other experts or departments within the company.

This brings me onto the question of size. Some advisers in continental Europe are sole practitioners. I recommend that you find out what will happen if for some reason or other they can no longer do the job or have to take a break for a while. More importantly, what will happen to your investments if his business fails? Peace of mind is very important when establishing a relationship, so you need to know if and how you will be safeguarded in the event of institutional failure, and that you will continue to receive good service in most eventualities.

Secondly, an adviser who is part of a large firm is more likely to be able to deal with most or all aspects of your financial planning. Having most of your financial needs managed under one roof will make your life easier and reduce costs.

Good communication is the key to establishing a rewarding relationship with your adviser. This includes a mutual understanding of objectives and terminology, the knowledge that he will listen to your needs and be contactable, and finally that he will take a personal interest in you and not consider you as just another account.

By Bill Blevins, Managing Director, Blevins Franks

8th February 2011

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.