By Andrew Brotchie, Managing Director: Glacier International
It used to be exclusively for the super-wealthy. Now, offshore investing forms an important part of investment portfolio construction. Many investors, looking to diversify beyond what is offered locally, are seeing the benefits of taking some of their discretionary money into foreign markets – and not just because of poor performance in local markets. I’m Andrew Brotchie, Managing Director for Glacier International and here are my top tips for hassle-free offshore investing:
1. Appoint a qualified financial adviser.
Even with simple processes, offshore investing can be overwhelming, and it isn’t sensible to embark on any kind of investment without involving a qualified financial adviser. They will partner with you to design an investment portfolio, tailored to your unique needs and risk profile. They have the training and skill to assist you, so let them.
2. Consider the red tape.
Consider solutions and products that, administratively, enable you to invest offshore with relative ease. Legal and tax implications need to be taken into account in the planning process when investments are being made in foreign currency. If they are not factored into the product or the planning, these implications could be costly.
3. Consider investing part of your retirement savings.
If you have opted for early retirement or have been retrenched, perhaps consider investing a portion of your retirement fund offshore. You’re allowed to withdraw up to a third as a lump sum on retirement or retrenchment. You could diversify that capital by investing in foreign markets, industries and funds.
4. Choose an investment partner with a proven track record locally and abroad.
The offshore fund universe is large with many unfamiliar asset managers and funds. Your investment partner provides guidance to help you make good offshore investment choices, so the partner you choose is key. Reputation and research are of paramount importance, and not enough can be said about an investment partner that:
- Has a reputable brand and has been around for longer than a decade;
- Has a strong research capability and the skill to do deep-dive studies of funds and asset managers; and
- Has a long-standing track record in the investment industry.
5. Look for transparency in the investment proposal.
In a nutshell, consider one that is:
- is offered by a provider with a good reputation and track record;
- has good levels of feedback reporting; and
- provides you with access to information.
You don’t want to have to work hard to get information about your portfolio or how it is doing. After all, that is why you are investing offshore.