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Expat Investor : August 2009
EXPATEXPAT Investor Serving expats for more than 16 years Now celebrating our 21st anniversary www.expatinvestor.com July/Aug 2009 email@example.com June 2005 In this issue 2 7 Expat labels Domicile, resident, non-resident -– which label should be you be sticking on your lapel during your stint overseas? 12 18 23 Healthcare costs and charges Check out our survey to find out how greater saving you could be making on your international healthcare insurance premiums. Offshore savings Best buy savings accounts and offshore funds. Apart-hotels Why apart-hotels are turning the heads of expatriates. Offshore Savings Survey Find out from the providers of the best buy savings accounts, what's currently finding favour with saving expats. Sorting the investing carefree from the worriers An innovative method to determine investors’ risk tolerance levels has been introduced by wealth manager HFM Columbus. Hannah Beecham reports on how it works and what the tests say about you. A new psychometric risk profiling tool commissioned by wealth manager HFM Columbus will enable its managers to “more accurately understand its clients’ approach to investment and attitude to risk”. The company – which offers investment solutions aimed at the higher net worth end of the market – is using a bespoke service designed to assess what it calls the “real” investment instincts of clients. “Our analysis of the typical tick box questionnaires deployed by most companies investing on behalf of their clients has invariably shown the majority of clients veer towards the median,” explains HFM Columbus director Marcus Carlton. “We believe the new psychometric www.expatinvestor.com Bringing advisers and investors together profiler will help us identify carefree people and worriers, those who need more information up front and are engaged with their investments and those who are impulsive types who might make quick decisions but who may come to regret them later. It is, in short, a more scientific indicator of risk appetite. “As well as being able to identify risk traits the profiler will give us helpful tips on how best to serve those particular clients – for example, the degree to which they will read supporting documentation or not and whether we need to be more pedantic in bringing certain aspects of an investment to their attention,” he adds. Personality profilers are traditionally used by human me&my easy option Enjoy a great rate and build for the future. resources teams at recruitment stage – but are thought to be less common when deployed in understanding private investors’ attitudes to risk. Psychometric profiling typically embraces five major personality traits, which are: ? Openness – appreciation for art emotion adventure, unusual ideas, curiosity, and variety of experience ? Conscientiousness – a tendency to show self-discipline, act dutifully and aim for achievement; planned rather than spontaneous behaviour ? Extraversion – energy, positive emotions, urgency and the tendency to seek stimulation and the company of others ? Agreeableness – a tendency to be compassionate and cooperative rather than suspicious and antagonistic towards others ? Emotional stability – a tendency to experience unpleasant emotions easily, such as anger, anxiety, depression or vulnerability “We are focusing principally on the ‘Conscientiousness’ variant to ascertain how much or how little the client wishes to engage in the advice process and to ensure that we deliver the correct amount and type of information in order for them to make a decision,” explains Mr Carlton. “We anticipate that the clients’ degree of conscientiousness will inform us if they are rash decision makers or if they make more studied decisions, and the profiler will also look at emotional stability in order to 2.75% Global Saver To subscribe to Expat Investor, fill in the form on page 20 or visit: analyse likely reaction to unexpected outcomes – for example severe market volatility – so that we can protect clients and manage their expectations better.” HFM Columbus stresses that its new psychometric profiler will not replace conventional client questionnaires, and neither will it replace ‘attitude to risk’-type questionnaires. “Rather, it is designed to enhance our understanding of client risk attitudes.” Meanwhile, for those of you not able to access this new profile tool, here are my own top tips for investing. ? Indulge in a little financial self- analysis. Start by outlining a detailed plan of your financial objectives. What do you want to do with your money? By clearly identifying your goals, you will find it easier to pick the appropriate investment vehicles to achieve them. ? Review your plan regularly. Check that your strategy is delivering a proportionate balance between risk and return. ? Research the four main asset classes – equities, bonds, property and cash deposits. Understand their fundamental characteristics. This will help you to find the right mix of asset classes for your portfolio – a mix that matches your risk appetite with your financial objectives. Risk is a necessary element of asset management and one which all investors must build into their investment strategy. Gross/p.a. • Annual, monthly and deferred interest options available • Minimum balance only £5,000 Interest rates effective from 2nd April 2009. 2.75% is payable for balances of £5,000 and above with annual interest. 2.72% (AER 2.75%) is payable on balances of £5,000 and above with monthly interest. The operation of the account is by post, telephone instruction or in person. 60 days notice required for withdrawals. Immediate access is available in lieu of 60 days interest on the amount withdrawn. Interest rates are quoted gross % p.a., that is, without any deduction of tax. European Union Savings Directive rules apply to EU resident depositors. It is the responsibility of the depositor to declare any interest received to their relevant tax authority. A.E.R. stands for Annual Equivalent Rate and illustrates what the interest would be if interest was paid and added to the account once a year. Bradford & Bingley International Limited (BBI) is a wholly owned subsidiary of Abbey National plc (Abbey) which is regulated by the Financial Services Authority in the UK. In turn, Abbey is part of Banco Santander S.A. of Spain, one of the world's largest banking groups. BBI places funds with Abbey, and thus its financial standing is linked to that of Abbey and ultimately Santander. Depositors may wish to form their own view on the financial standing of BBI, Abbey and the Santander group based on publicly available information, including report and accounts, obtainable via www.bbi.co.im. BBI is a member of the Depositors’ Compensation Scheme as set out in the Isle of Man Compensation of Depositors Regulations 2008 (as amended). Bradford & Bingley International Limited is registered in the Isle of Man No. 052221C. Registered Office: 30 Ridgeway Street, Douglas, Isle of Man IM1 1TA British Isles. Telephone calls may be recorded. Licensed by the Isle of Man Financial Supervision Commission to take deposits. expatinvestor.com ? Always consider the downside to any investment opportunity as it is presented to you.Worthwhile decisions can only be made when the risk–reward ratio has been worked out. ? Risk is managed through diversification. Ensure your investment strategy encompasses a balanced approach in terms of geographic, sectoral and stock spread. ? Timing is critical for investment success. Sometimes, when stock prices are falling, you just have to cut your losses and run. But as a rule of thumb, the longer your investment horizon, the more your portfolio should be able to absorb market volatility – ‘time in’ is more important than ‘timing.’ ? Remember that past performance is no indication of future outcome. When choosing investments which have generated strong returns don’t assume such momentum will continue. Investigate all the factors which have driven previous growth and ask your investment manager whether those factors are sustainable over the longer term. ? Check out the tax implications of every investment decision. Tax liabilities may impact on the profitability of a portfolio. Remember to consider any tax due in your country of residence, as well as that which might fall due when you return to the home country. The extent of your liability will depend upon whether you have resident or non- resident tax status. Call now on +44 (0) 1624 695000 email firstname.lastname@example.org or visit www.bbi.co.im www.expatinvestor.com To register for Expat Investor digital edition, visit the website at
May June 2009
September October 2009