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Banks Need to Do More to Encourage Expatriate Savers

This week we’ve been speaking to 50 Expatra readers who have already made their move abroad, and who originally contacted us with regard to their savings and investment status now that they are non-UK residents for tax purposes.

We wanted to find out what their personal experiences have been when trying to find the right offshore savings vehicles for the utilisation of their excess wealth.  From what we have learned, it seems that offshore banks and financial services companies need to do more to encourage and support expatriate savers.

We were inspired to survey readers following the January 1st announcement that the Financial Services Compensation Scheme in the UK has increased the amount it will guarantee for savers onshore.  Now onshore savings in the UK are protected in line with savings across the European Economic Area – however, expatriate savers are generally not as well protected.  We wanted to know what other issues expats face when trying to make the most of their financial status.

Theoretically, one of the best things about being an expat – no matter where in the world you decide to go and live, work or retire – is the fact that once you become non-resident for tax purposes in the UK, you can potentially benefit greatly from the offshore financial marketplace.

In theory this means that any qualifying expat can save, invest or bank offshore and benefit from the likes of tax enhanced schemes or tax deferral benefits, they can access different currencies, different underlying assets, alternative fund managers and diversify and explore to their heart’s content…however, is it really that easy?

According to our readers, finding the right path for the investment of their money has not been straightforward at all.

According to over 85% of readers surveyed, finding the right advice was ‘very difficult.’  Reasons cited included the fact that few onshore financial advisers in their new destination or ‘back home’ understood the nature of the opportunities available to expatriates.

We are well aware that this issue exists – which is why we always recommend that our readers try and find a financial advisory which specialises in advising only expats, and which is independent, regulated and experienced…often taking a personal recommendation from other expats can help.

42 out of the 50 readers we surveyed advised us that in order to find appropriate financial solutions, they directly approached banks or institutions to discuss their savings, investing or banking options.  Out of these 42 people, 39 explained that they felt the bank or finance house in question could have done more to help them.

Ways in which offshore banks seemed to fail our readers included not being able to give advice specific to the individual about the appropriateness or otherwise of a proposed savings solution or investment account.  Readers were advised to speak to an accountant or seek independent advice elsewhere.

Clearly a bank or institution can only ‘sell’ or recommend their own in-house products – but if the representative of the institution in question cannot give direct advice about how a given solution may work for the individual, then best advice is not being given.

It’s hard enough for expats to work out how and where they should be saving and investing to make the most of their money – so banks should do more to help.  Generic information is not enough – expats want to be able to access more specific and personalised support.

Some banks will offer this if you’re a premier or private account holder.  Otherwise, our readers felt that an offshore financial adviser may have been best placed to assist.

Finally, when directly asked about the lack of financial compensation schemes available offshore, and the fact that even when there are schemes in place they seemingly fail to deliver in some cases, 100% of our readers felt that this was unfair, and did not harbour an environment of trust.  Expats have to tread very carefully when deciding where is safe to save abroad – and if offshore jurisdictions such as the Channel Islands, the Isle of Man, Ireland, Switzerland, Luxembourg etc., want to attract expatriate wealth, they need to do more to guarantee its protection.

We hope that those in the financial services industry will start to listen to their customers more – the information they supply and the feedback they can give is very valuable.

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