Post being updated…
Post being updated…
In Rio de Janeiro, this has become an increasingly scenario for expats:
A few months ago, you had a secure expat assignment in an oil or mining company, with a generous package including accommodation in a luxury apartment, school fees for your kids at an international school and family health plans with access to top quality private medical care.
Given the oil price decline and challenging economic circumstances in Brazil, you may be facing less job security or redundancy, which will have a huge impact on you and your family’s cash flow and emotional well-being. To add to the stress, your work visa may be expiring soon and you may be forced to relocate or repatriate to your home country. Even the alternative of being switched from an expat to a local contract may force significant financial sacrifices to be made.
As several decisions have to be made at once, we offer transition advice on financial, tax and health cover planning to remove some of the headache for our clients.
Considerations include how to select assets to liquidate to cover a period without income; which private health plans are available for a family with children; how to transfer your savings to another country at a competitive rate and deciding on the right phasing schedule given the volatility of the Real.
Do you have enough savings to keep you going through periods of unemployment or to cover the costs of relocation which you may have to absorb. If transition is likely to cover several months, are your medium/long term investments being managed in accordance to keep a portion available in near-cash?
Expats are advised to structure their personal finances to ensure they benefit from favourable tax treatment in both, their countries of domicile and residence. In our reviews with clients, we develop a solid ‘Plan B’ strategy to ensure a smoother transition in the event of redundancy.
Proactive communication with your financial advisor is important to maintain the fact find updated. The fact find is a dynamic process which should document changing possible outcomes with an accompanying spreadsheet showing income and costs (and tax!).
Click on the above article which was published in the Brazilian Chamber of Commerce (UK) magazine at the beginning of 2018. It provides a concise explanation of the CRS and how will affect Brazilian residents – including expatriates – with overseas assets.
Click on the above link to read our opinions in the April/2016 edition of Simon Letter | Live & Invest Overseas
We offer our advice on:
- Cash management for entrepreneurs.
- Asset allocation for longer term investors.
- Tax considerations for US citizens investing in Brazil.
‘Robo-advisors’ are computer-generated financial models which offer portfolio recommendations using low-cost funds, based on simple risk questionnaires with clients.
I believe they have their role in basic portfolio management but we need to be aware of their limitations. Expatriates may like to consider the following points:
1. Does a computer-generated model understand your financial circumstances and lifestyle objectives with the required level of intimacy as per the traditional client- adviser relationship? Health, tax, reporting, inheritance…?
2. Can this robot truly challenge you about your objectives and recommend a more appropriate risk/reward strategy based on your age and investment horizon?
3. Will this robot proactively reassure you during a period of volatility and suggest that you maintain or change strategy? What about the qualitative, political and currency risk factors which cannot be distilled into the financial model?
4. Does the robot have the metal balls required to take a risk? E.g. buying into certain sectors at present e.g. energy and emerging market equities – and managing the client’s expectations accordingly
5. Has Mr. Robot experienced an expat lifestyle with ‘Fembot’ and the Robo-kids? If so, maybe he can provide holistic international tax advice and discuss repatriation.
6. For high net worth investors, will Mr. Robot considering alternatives like private equity and hedge funds?
In summary, robots sometimes have a role to play within the wider context of financial and tax planning.
On that note, I’m off to see my Robo-doctor…