Do I need a financial advisor to plan for my retirement?

As an expat, managing your finances in a new country can be challenging, and it’s easy to miss out on potential tax savings if you’re not clued up. Whether you’re in your 30s or your 60s, it’s also vital that you consider your retirement and start setting money to one side for your future - especially as an expatriate in a country where you might not be able to rely on a state pension. Although it’s possible to learn as you go, it’s often recommended to turn to an independent, local financial advisor, and we’ve put together some of the reasons why below.

Why do I need a financial advisor?

Nobody wants to think about getting older, but it’s important to plan ahead to ensure the most comfortable retirement. Working with an independent advisor means that your current finances, personal circumstances and goals can be assessed, and recommendations can be given to maximise your funds for the future. Advisors can recommend retirement income products to you which will ensure you’ll have enough to live off when you give up on work.

How to find financial advisors

The good news is that you should be able to find an English-speaking advisor anywhere in the world - but it’s important to do your research before you hand over any money. Fees can vary, but before you sign up for a plan, ask your advisor what their fees and charges are and when you are expected to pay for their advice. Some advisors work on a commission basis so won’t charge you directly, whereas others will charge you an upfront fee for their time and expertise, and additional fees for setting up or arranging investment products thereafter. 

The chances are that you’ll be charged a one-off fee to meet with an independent advisor, or a regular fee if they’re offering ongoing advice tailored to your retirement goals. Some pension providers offer an allowance that helps you cover the costs of financial advice, so depending on where in the world you hold pensions, you should speak to them for support.

We recommend exercising caution when speaking to anyone about your personal finances. Choose a retirement specialist who is regulated in your new country, and that has a proven track record of helping people manage their money and grow their funds. If they work on a commission-basis, recommending products or funds, pay even closer attention and be sure that you’re not being duped into signing up for something that could wreck your pension pot. A growing number of expats are falling victim to pension scams, and unlike in the United Kingdom, some markets are unregulated, making it tough to recover losses. Be vigilant.

Advisors help set clear goals

Perhaps one of the biggest reasons to work with an independent financial advisor as an expat is so you can set clear, realistic goals about your future finances. A consultation with a professional will help you assess whether you’re doing enough for your future self, and could offer some food for thought on expanding that side hustle or going for a promotion at work. If your plan is to retire early from work or help your children buy their first property, a financial advisor will guide you through the process and ensure you come out of it in the best possible manner. Be warned: you might not like what your advisor has to say, but take their advice as a reality check and be prepared to make changes to your lifestyle to maximise your funds.

Regular reviews can help reflect your changing circumstances

Our lives can change a lot in a year, and whether you’re getting divorced, expecting a baby, or moving halfway across the world, your financial situation will undoubtedly change. An advisor can help you keep on top of any changes and adjust your investment portfolio accordingly. They’ll also offer you regular updates (typically once a year) to help you keep track of your finances and alert you to changing legislation that could affect your pension or investment pots, such as new taxes and levies, to ensure you’re not at risk of losing money.

Tax-efficiency reviews ensure you’re not stung

As we’ve touched upon, independent financial advisors swot up on local taxation laws (and indeed laws in your country of origin) throughout the year, so you can sit back and relax, knowing you’re not missing out. Tax systems are incredibly complex and difficult to navigate, and making errors can cost thousands of dollars over the years. A good advisor will be on top of tax laws and create the most tax-efficient savings portfolio for you possible. And, when it comes to drawing down your pension pot, they’ll also be able to offer tips on doing so in the most efficient manner, especially if you have a separate pension and savings plan in different countries. Navigating currency conversions and double taxation treaties can be stressful and result in expensive mistakes; turning to a professional is advised in this case.

They have impeccable product knowledge

Finally, choosing to work with a financial advisor as an expat means you’ll be able to access the very best products from the top providers in your new country. Advisors spend their free time monitoring the market, carrying out research on the best product solutions, and then recommend the best for your needs, clearly outlining the fees, limitations, and risk factors. Whilst it’s possible to do this independently, only reputable retirement professionals can offer a comprehensive look at the market and ensure you’re making the very best investments.

Looking for an independent financial advisor to help you plan your expat retirement? Turn to Profezo, the marketplace that connects consumers with vetted financial advisors, and check back to the Money Saving Expat blog soon for advice on making your money work for you.