Are your investments suitable for your life in abroad? Your overall investment portfolio should be specifically structured around your risk profile, objectives and circumstances, as well as to provide tax and inheritance planning advantages in your country of residence.

Moving to a new country is the perfect opportunity to have a fresh look at your savings and investments. You need to adjust your tax planning and estate planning to take account of the local tax and succession regimes, and it makes perfect sense to review your investment capital at the same time.

Beyond the convenience of organising all your financial planning at once, each element is closely connected. How you structure and hold your assets can influence your annual tax position as well as the inheritance tax your heirs may face. It can also determine who is able to receive those assets on your death and whether they must go through probate or can be transferred more easily.

If you make a good profit on selling your UK home, or perhaps a business, when relocating abroad, you may be wondering how best to invest these funds to give you better income and growth prospects. Or you may receive an inheritance you wish to invest for the future.

You probably have various investments too, made over the years, whether it is ISAs, company shares, or multi-asset funds. They may have been good decisions at the time, based on your objectives back then, but are they suitable for your life today as an expatriate and your current phase in life, and do they work well together as an overall portfolio?

Start your review by asking yourself a few questions –

1. What are you looking to achieve? Do you need income to help finance your retirement or treat yourself occasionally? Or are you looking for growth, to protect the value of your savings for the long-term? Or is it both?
2. What is your time horizon? Do you need your savings to last just your (and your spouse’s) lifetime, or do you wish to pass on wealth to your children? Or are you looking to cash in investments within a few years? Short-term investors should usually consider different options to those with a longer-term perspective.
3. What are your circumstances? What are your monthly expenses? What pension savings/income do you have? Do you have family to consider and where do they live? Are you in good health? Do you expect to live abroad long-term or will you return to the UK one day? Are you expecting to buy or sell a property?
4. What currency? Converting Sterling funds into Euros monthly for your expenses puts your income at the mercy of exchange rate movements. British expatriates may wish to hold a mix of both currencies, and/or use investment structures that provide currency flexibility.
5. How much investment risk are you really comfortable with? And what level of risk does your current portfolio have?
6. How much tax are you paying on your investments? What was tax efficient in the UK is unlikely to be tax efficient abroad, so how much tax could you save by re-structuring your capital?

Your overall portfolio should be specifically designed around the answers to the above questions, to meet your circumstances and goals. A poorly aligned portfolio may fail to meet your objectives, lose real value to inflation, expose you to unnecessary risk, or be difficult to access when needed.

Your appetite for risk

Establishing your objectives and determining your risk tolerance are the starting points for a successful investment strategy.

You need to pinpoint the right risk/return balance for your peace of mind, but it is extremely difficult to effectively assess your own risk profile. You will benefit from third party professional objective guidance – there are some sophisticated ways of evaluating your risk appetite, with some advisers using psychometric assessments. This gives them greater understanding of your attitude to risk and helps position your investments accordingly, so your portfolio is neither too risky nor too cautious.

Asset allocation and diversification

Diversification is key to managing risk within a portfolio. Different investments carry different levels of risk, so we determine which balance works for your risk profile and objectives.

Your investments need to be suitably diversified to ensure you are not over-exposed to any given country, asset type, sector or stock. By spreading across different asset classes (equities, bonds, real assets) and markets (UK, US, Europe, emerging markets etc), you give your portfolio the chance to produce positive returns over time without being over-exposed to a particular asset class or sector.

At Blevins Franks, our core investment partners offer a broad range of fund solutions, enabling us to allocate each part of your portfolio to specialist investment managers and achieve greater diversification.

Tax-efficient investment arrangements

A tax-efficient structure can keep most of your investments in one place, making them easier to manage, and provide protection to help you legitimately avoid paying too much tax. The less tax you pay, the more of your returns you get to enjoy.

Take specialist wealth management advice to establish if you can improve your tax liabilities on your investment assets and income. For example, holding investments within an approved life assurance contract can provide considerable tax advantages in countries like France, Spain, Portugal and Cyprus, and often estate planning benefits too.

Regular reviews

Even if you have re-structured your capital investments since moving abroad, it is still important to review your portfolio around once a year to confirm if it remains on track. Your personal circumstances may have changed, or your risk weighting may have shifted as values rise and fall, in which case you may need to re-balance it.

At Blevins Franks, we provide integrated advice covering investing, tax mitigation and succession planning. We establish a clear understanding of your risk profile, goals, family situation, time horizon and wishes for your heirs before outlining our recommendations in a detailed strategic financial planning report.

Contact us today to learn more about our approach to wealth management and how we provide long-term peace of mind to our clients

These views are put forward for consideration purposes only as the suitability of any investment is dependent on the investment objectives, time horizon, and attitude to risk of the investor. The value of investments can fall as well as rise, as can the income arising from them. Past performance should not be seen as an indication of future performance.